EXHIBIT 1
PROVIDIAN FINANCIAL CORPORATION
$884,000,000
Principal Amount at Maturity
Zero Coupon Convertible Notes due 2021
___________
Underwriting Agreement
----------------------
February 8, 0000
XXXX XX XXXXXXX SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX BARNEY INC.
as Representatives of the several
Underwriters named on Schedule 1 hereto
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Providian Financial Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you (the "Underwriters") an aggregate of $884,000,000 principal amount at
maturity of its Zero Coupon Convertible Notes Due 2021, convertible into common
stock, par value $0.01 per share (the "Stock"), of the Company (the "Firm
Securities") and, at the election of the Underwriters pursuant to Section 2
hereof, up to an aggregate of $131,000,000 additional aggregate principal
amount at maturity of such Notes (the "Optional Securities," and together with
the Firm Securities, the "Securities").
1. The Company represents and warrants to, and agrees with, the
Underwriters that:
(a) A Registration Statement on Form S-3 (Registration No. 333-55937),
including a prospectus, with respect to the Securities has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations thereunder (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has become effective. Copies of such registration statement have
been delivered by the Company to you as the Underwriters. As used in this
Agreement, (i) "Registration Statement" means such registration statement, as
amended and supplemented to the date hereof; (ii) "Basic Prospectus" means the
prospectus included in the Registration Statement as amended or supplemented to
the date hereof; and (iii) "Prospectus" means the Basic Prospectus, together
with any prospectus amendment or supplement specifically
relating to the Securities (including in each case all documents incorporated
therein by reference (the "Incorporated Documents")), as filed with the
Commission pursuant to paragraph (b) of Rule 424 of the Rules and Regulations.
The Commission has not issued any order preventing or suspending the use of any
Prospectus, and no proceedings for such purposes have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has
been complied with;
(b) The Registration Statement and the Prospectus contain (and in the
case of any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the Commission after
the date as of which this representation is being made will contain) at all
times during the period specified in paragraph 5(c) hereof, all statements which
are required to be contained in the Registration Statement and the Prospectus by
the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder; the Indenture referred to
below with any amendments and supplements thereto will conform with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission thereunder; and the Registration Statement, the Prospectus and the
Incorporated Documents do not (and in the case of any amendment or supplement to
any such document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made will not) at any time during the period specified
in paragraph 5(c) hereof, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that the Company makes no
representation or warranty as to information contained in or omitted from the
Registration Statement or any Prospectus in reliance and based upon information
furnished to the Company by or on behalf of any Underwriter;
(c) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, (i) there has not been any material
adverse change in or affecting the condition, financial or otherwise, business
affairs, or business prospects of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus and (ii)
there have been no material transactions entered into by the Company or any of
its subsidiaries other than those in the ordinary course of business and other
than those which have been and are required to be disclosed in the Prospectus;
(d) Each of the Company and each Significant Subsidiary (as such term
is defined in Rule 1-02 of Regulation S-X promulgated under the Act) of the
Company (each, a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases substantial property, except to the extent that the failure to be so
qualified or to be in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
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(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; the shares of Stock issuable upon conversion of the Securities have
been duly and validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities and the Indenture
referred to below, will be duly and validly issued, fully paid and non-
assessable and will conform to the description of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each Significant
Subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, security interests or
claims;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, and entitled to
the benefits provided by the indenture dated as of May 1, 1999 and the second
supplemental indenture to be dated as of February 15, 2001 (collectively, the
"Indenture") between the Company and Bank One Trust Company, N.A., as Trustee
(the "Trustee"), under which they are to be issued; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and when the second
supplemental indenture is executed and delivered by the Company and the Trustee,
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof in the
Prospectus;
(g) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement or the Indenture,
except the registration under the Act of the Securities and the shares of Stock
issuable upon conversion thereof, such as have been obtained under the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
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(h) Neither the Company nor any Significant Subsidiary is in violation
of its Charter or By-laws or in default in the performance or observance of any
obligation, agreement, covenant, or condition contained in any contract,
indenture, mortgage, deed of trust, loan agreement, credit agreement, note,
lease or other agreement or instrument to which the Company or such Significant
Subsidiary is a party or by which any of them may be bound or to which the
property or assets of the Company or such Significant Subsidiary is subject
which is reasonably likely to have a material adverse effect on the condition
(financial or other) or business, or materially affect the property or assets,
of the Company and its subsidiaries taken as a whole;
(i) Except as set forth in the Prospectus, there is no action, suit or
proceeding to which the Company or any of its subsidiaries is a party pending
before or brought by any court, arbitrator or governmental body, nor is any such
action, suit or proceeding to the knowledge of the Company threatened, in
respect of which, in the judgment of the Company, there is any reasonable
likelihood that it will result in a material adverse change in the condition
(financial or other) or business, or materially affect the properties or assets,
of the Company and its subsidiaries taken as a whole;
(j) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(k) The accountants who reported on the financial statements and any
required supporting schedules thereto included in the Registration Statement and
Prospectus are independent accountants as required by the Act and the Rules and
Regulations.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to the Underwriters, and the Underwriters agree to
purchase from the Company, the Firm Securities, at a purchase price of $452.89
per $1,000 principal amount at maturity and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Securities as provided below, the Company agrees to issue and sell to the
Underwriters, and the Underwriters agree to purchase from the Company, at a
purchase price of $452.89 per $1,000 principal amount at maturity plus accrued
interest, if any, or amortized original issue discount, if any, from February
15, 2001, that aggregate principal amount at maturity of the Optional Securities
as to which such election shall have been exercised.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $131,000,000 aggregate principal amount at maturity of
Optional Securities, at the price set forth in clause (b) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount at maturity of Firm Securities. Any
such election to purchase Optional Securities may be exercised by written notice
from you to the Company, given within a period of 30 calendar days after the
date of this Agreement, setting forth the aggregate principal amount at maturity
of Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered, as determined by you but in no event earlier
than the First Time of Delivery or, unless you and the Company otherwise agree
in
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writing, earlier than two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of the release of the Securities, the
Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by the Underwriters hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to the Underwriters against payment by the Underwriters of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Banc of America Securities LLC at least
forty-eight hours in advance, by causing DTC to credit the Securities to the
account of Banc of America Securities LLC at DTC. The Company will cause the
certificates representing the Securities to be made available to Banc of America
Securities LLC for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Securities, 9:30 a.m., New York City time, on
February 15, 2001 or such other time and date as Banc of America Securities LLC
and the Company may agree upon in writing, and, with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by Banc of
America Securities LLC in the written notice given by Banc of America Securities
LLC of the Underwriters' election to purchase such Optional Securities, or such
other time and date as Banc of America Securities LLC and the Company may agree
upon in writing. Such time and date for delivery of the Firm Securities is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Securities, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date for delivery is herein
called a "Time of Delivery."
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties. hereto pursuant to Section 7 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the offices of
Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such
other place as may be agreed to in writing by the Company and the Underwriters
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 5:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York City are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of
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business on the second business day following the execution and delivery of this
Agreement; to make no further amendment or supplement to the Registration
Statement or Prospectus prior to such Time of Delivery which shall be
disapproved by you promptly after reasonable notice thereof unless in the
opinion of counsel to the Company such amendment or supplement is required by
law; to advise you, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Prospectus, of the suspension of the qualification of
the Securities or the shares of Stock issuable upon conversion of the Securities
for offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Prospectus or suspending
any such qualification, to promptly use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the shares of Stock issuable
upon conversion of the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings in such jurisdictions for as
long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) As soon as reasonably practicable after the date of this Agreement
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Securities, to furnish the Underwriters with copies
of the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the date of the Prospectus and if at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to file such document and to
prepare and furnish without charge to the Underwriters and to any dealer in
securities as many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or
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effect such compliance; and in case the Underwriters are required to deliver a
prospectus in connection with sales of any of the Securities and the shares of
Stock issuable upon conversion of the Securities at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of the Underwriters, to prepare and deliver to the Underwriters as many copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 90 days after close of the period
covered thereby, an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158) and covering each twelve-month period beginning not later
than the first day of the Company's fiscal quarter next following the effective
date of the Registration Statement or a post-effective amendment thereto (within
the meaning of Rule 158);
(e) No offering, sale or other disposition or hedge involving such
offering, sale or other disposition of any Stock or any other securities
convertible or exchangeable or exercisable for the Stock, will be made for a
period of 90 days after the date of this Agreement, directly or indirectly, by
the Company other than pursuant to employee stock option, stock ownership or
equity incentive plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of the date of this
Agreement, without your prior written consent;
(f) During the period when delivery of a prospectus is required in
connection with the offering or sale of the Securities, to deliver to you (i) as
soon as they are available, copies of any reports and financial statements the
Company furnishes to or files with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to the
Commission);
(g) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities;
(h) To use its best efforts to list, subject to notice of issuance,
the shares of Stock issuable upon conversion of the Securities on the New York
Stock Exchange; and
(i) To give you prior notice of any transactions of a type that would
be subject to the restrictions set forth in Annex IIB, either by any directors
of the Company or by any executive officers of the Company listed on Annex IIA,
with respect to the Stock or any other securities convertible or exchangeable or
exercisable for the Stock during the period commencing 15 days after the date
hereof and ending 45 days after the date hereof, as set forth in Annex IIB.
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6. The Company covenants and agrees with the Underwriters that the
Company will pay or cause to be paid the following: (i) the fees and expenses of
the Company's counsel and accountants in connection with the registration of the
Securities and the shares of Stock issuable upon conversion of the Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Prospectus and amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing this
Agreement, the Indenture, the Blue Sky and Legal Investment Memoranda, and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all reasonable expenses in connection with the
qualification of the Securities and the shares of Stock issuable upon conversion
of the Securities for offering and sale under state securities laws as provided
in Section 5(b) hereof, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) the filing fees
incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the
cost of preparing the Securities; (vii) the fees and expenses of the Trustee and
any agent of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities; and (viii) all
other reasonable costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make. In addition, the Underwriters agree to reimburse the
Company for fees and expenses of the Company's counsel and accountants specified
in (i) above up to a maximum of $150,000.
7. The obligations of the Underwriters hereunder shall be subject, in
your discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) The Underwriters shall have received at such Time of Delivery an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated such Time
of Delivery and covering the matters previously requested by the
Representatives, in form and substance
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satisfactory to the Representatives and their counsel in their sole discretion,
including the opinion set forth in paragraph 10 of Exhibit 1 hereto.
(c) The Underwriters shall have received at such Time of Delivery an
opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel to the Company, dated
such Time of Delivery substantially in the form of Exhibit 1 hereto.
(d) The Underwriters shall have received at such Time of Delivery an
opinion of Xxxxxx X. Xxxx, Esq., Associate General Counsel to the Company, dated
such Time of Delivery substantially in the form of Exhibit 2 hereto.
(e) On the date of this Agreement at a time prior to the execution of
this Agreement and at such Time of Delivery, the independent accountants of the
Company who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
shall have furnished to you a letter, dated the date of this Agreement and a
letter dated such Time of Delivery, respectively, to the effect set forth in
Annex I hereto, and with respect to such letter dated such Time of Delivery, as
to such other matters as you may reasonably request and in form and substance
satisfactory to you;
(f) Since the respective dates as of which information is given in the
Prospectus as amended or supplemented and prior to such Time of Delivery, there
shall not have been any change in or affecting the condition, financial or
otherwise, business affairs and business prospects of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus as amended and supplemented through the date of this Agreement,
the effect of which is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(g) On or after the date hereof until the Time of Delivery (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(h) On or after the date hereof until the Time of Delivery there shall
not have occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in clauses (i), (ii), (iii) or (iv) in your judgment
makes it impracticable or inadvisable to proceed with the
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public offering or the delivery of the Securities being issued at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(i) An application for the listing of the shares of Stock issuable
upon conversion of the Securities shall have been filed with the New York Stock
Exchange;
(j) The Company shall have furnished or caused to be furnished to you
a certificate of officers of the Company, dated the Time of Delivery,
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as you may reasonably request; and
(k) The Underwriters shall have received from each executive officer
of the Company listed on Annex IIA a signed letter in the form of Annex IIB
hereto and the Company shall have notified each director of the Company of
restrictions set forth in Annex IIB and required each such director to comply
with such restrictions to the same extent as they are applied to the executive
officers listed on Annex IIA.
8. (a) The Company will indemnify and hold harmless the Underwriters
against any losses, claims, damages or liabilities, to which the Underwriters
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus supplement, the Registration Statement,
the Prospectus and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Underwriters for any legal or other expenses reasonably incurred
by the Underwriters in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any other
prospectus relating to the Securities, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you expressly for use therein; and provided, further, that the
Company shall not be liable to the Underwriters under the indemnity agreement in
this subsection (a) with respect to any preliminary prospectus supplement to the
extent that any such loss, claim, damage or liability results from the fact that
the Underwriters sold Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of the Prospectus
as then amended or supplemented (excluding documents incorporated by reference)
if the Company has previously furnished copies thereof to the Underwriters and
the untrue statement or omission of a material fact contained in the preliminary
prospectus supplement was corrected in such Prospectus (or any amendment or
supplement thereto).
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(b) The Underwriters will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus supplement, the Registration Statement,
the Prospectus and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any other
prospectus relating to the Securities, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability under such subsection
unless such failure has materially prejudiced the indemnifying party's ability
to defend such claim; provided, that the failure to notify the indemnifying
party shall not relieve it from any other liability which it may have to an
indemnified party otherwise than under such subsection. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation; provided, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (i) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(ii) the indemnified party has reasonably concluded (based upon advice of
counsel to the indemnified party) that there may be legal defenses available to
it or other indemnified parties that are different from or in addition to those
available to the indemnifying party, (iii) a conflict or potential conflict
exists (based upon advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the
11
indemnified party) or (iv) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 8(a) and 8(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim 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.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or
12
alleged omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by them and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise, have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriters within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriters or any controlling person of the Underwriters, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
10. If for any reason, any Securities are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse the Underwriters for
all out-of-pocket expenses approved in writing by Banc of America Securities
LLC, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to the
Underwriters except as provided in Sections 6 and 8 hereof.
11. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to Banc of America Securities LLC, 0 Xxxx 00/xx/ Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention:
13
Xxxx Xxxxxxxxx; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Treasurer. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
9 hereof, the officers and directors of the Company and each person who controls
the Company or the Underwriters, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from the Underwriters shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof shall constitute a binding agreement between
the Underwriters and the Company.
Very truly yours,
Providian Financial Corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
14
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written:
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
as Representatives of the Underwriters listed on
Schedule 1 hereto
By: BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
15
SCHEDULE 1
Maximum Additional Principal
Amount At Maturity of
Securities to be Purchased if
Principal Amount At Overallotment Option is
Name of Underwriter Maturity of Securities Exercised
------------------- -------------------------- -----------------------------
Banc of America Securities LLC $795,600,000 $117,900,000
X.X. Xxxxxx Securities Inc. $ 44,200,000 $ 6,550,000
Xxxxxxx Xxxxx Xxxxxx Inc. $ 44,200,000 $ 6,550,000
TOTAL $884,000,000 $131,000,000
SCHEDULE 2
Underwriters
Banc of America Securities LLC
9 West 00/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Exhibit 1
[Form of Opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP]
February 15, 0000
Xxxx xx Xxxxxxx Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
as Representatives of the several
Underwriters named on Schedule I hereto
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Providian Financial Corporation
Zero Coupon Convertible Notes due 2021
Ladies and Gentlemen:
We are furnishing you this opinion in compliance with the provisions of
Section 7(c) of the Underwriting Agreement, dated February 8, 2001 (the
"Underwriting Agreement"), between Providian Financial Corporation (the
"Company") and you, providing for the sale by the Company to you of its Zero
Coupon Convertible Notes due 2021 (the "Notes") in an aggregate principal amount
at maturity of $. issued pursuant to that certain Indenture, dated as of May 1,
1999 between the Company and Bank One Trust Company, N. A., as successor in
interest to The First National Bank of Chicago, as trustee (the "Trustee"), as
supplemented by that certain Supplemental Indenture, dated as of ., 2001 between
the Company and the Trustee (the "Indenture").
We have acted as counsel for the Company and as such have participated in
and are familiar with the corporate proceedings relating to the sale of the
Notes by the Company in accordance with the terms of the Underwriting Agreement.
Unless otherwise defined herein, all terms defined in the Underwriting Agreement
shall have the same respective meanings when used herein.
In this regard, we have examined executed originals or copies of the
following, copies of which have been delivered to you:
(a) All proceedings and documents relating to the incorporation of the
Company under the laws of the State of Delaware, including the certificate of
incorporation and all amendments thereto to the date hereof (the "Certificate of
Incorporation"), the by-laws of the Company as amended to the date hereof (the
"By-laws') and the resolutions adopted by the
Board of Directors of the Company on and the resolutions adopted by unanimous
written consent of the Special Committee on relating to the sale of the Notes
pursuant to the Underwriting Agreement.
(b) The Registration Statement (Form S-3), Registration No. 333-55937 (the
"Registration Statement"), filed on June 3, 1998 with the Securities and
Exchange Commission (the "Commission") in accordance with the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "1933 Act"); evidence satisfactory to us that the
Registration Statement became effective on June 24, 1998; the Prospectus dated
May 14, 1999 as filed with the Commission on May 18, 1999 and the Prospectus
Supplement dated February 8, 2001 in the form filed with the Commission pursuant
to Rule 424(b), including all documents incorporated by reference therein as of
the date of such filing, except for any statements in documents which are deemed
under the Commission's Rule 412 not to be so incorporated (collectively, the
"Prospectus").
(c) The Underwriting Agreement.
(d) The Indenture and evidence satisfactory to us that the Indenture
became qualified under the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "1939
Act"), on May 5, 1999.
(e) The certificates of various corporate officers delivered by the
Company to you on the date hereof.
(f) The certificates of certain state authorities and filing officers,
copies of which are being delivered to you on the date hereof.
(g) The other documents delivered on the date hereof in connection with
the issuance and sale of the Notes.
(h) The opinion of Xxxxxx X. Xxxx, Associate General Counsel to the
Company, delivered on the date hereof to you.
(i) Such other instruments, corporate records, certificates and other
documents as we have deemed necessary as a basis for the opinion hereinafter
expressed.
Based upon such examination. and having regard for legal considerations
that we deem relevant and subject to the assumptions, qualifications and
limitations set forth below, we are of the following opinion:
1. We do not know of any litigation or any governmental proceeding
instituted or threatened against the Company or any of its consolidated
subsidiaries which in our opinion would individually or in the aggregate
reasonably be expected to have a material adverse effect on the business or
financial position of the Company and its subsidiaries taken as a whole or be
required to be disclosed in tile Registration Statement which is not disclosed
and accurately summarized in the Prospectus.
2. The Notes have been duly executed, issued and delivered by the Company
and, when authenticated by the Trustee, the Notes will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms and entitled to the benefits provided
2
by the Indenture; and the Indenture conforms and the Notes conform in all
material respects to the descriptions thereof in the Prospectus.
3. The Indenture constitutes a valid and legally binding obligation of
the Company, enforceable in accordance with its terms; and the Indenture has
been duly qualified under the 1939 Act.
4. The issue and sale of the Notes and the compliance by the Company with
all of the provisions of the Notes, the Indenture, the Underwriting Agreement,
and the consummation of the transactions therein contemplated, will not conflict
with or result in any violation of, to our knowledge, any statute of the United
States of America or the Delaware General Corporation Law or any rule or
regulation thereunder as amended (provided that no opinion is expressed in this
paragraph as to compliance with the 1933 Act, the 1939 Act, the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1934 Act") or the Delaware Securities
Act, or with the Bankruptcy Code of 1978, as amended, with respect to any
proceeding in which the Company is the debtor) or, to our knowledge, any order
of any court or governmental agency or body of the United States of America; and
no filing, consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Notes by the Company or the consummation
by the Company of the other transactions contemplated by the Underwriting
Agreement or the Indenture, except such as have been obtained under the 1933 Act
and the 1939 Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Delaware securities laws or Blue Sky
laws in connection with the purchase and distribution of the Notes by you.
5. The Registration Statement has been declared effective under the Act,
any required filing of the Prospectus pursuant to Rule 424(b) has been made in
accordance therewith and, to the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceedings for a stop order have been instituted or are pending or
threatened under Section 8(d) of the Act.
6. The documents incorporated by reference in the Prospectus (other than
the financial statements and related schedules and other financial data therein,
as to which we express no opinion or belief), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of
the Commission thereunder.
7. The Registration Statement, as of the date on which any part thereof
became effective, and the Prospectus, as of its date or the date hereof (other
than the financial statements and related schedules and other financial data
therein, as to which we express no opinion or belief) complied or complies as to
form in all material respects with the requirements of the 1933 Act and the 1939
Act.
8. The Company is not an "investment company" or an entity controlled by
an "investment company" under the Investment Company Act of 1940, as amended.
9. The statements set forth in the Prospectus under the caption
"Description of the Notes", insofar as they purport to constitute a summary of
the terms of the Notes, and under the captions "Material United States Income
Tax Considerations" and "Underwriting", insofar as
3
they purport to describe the provisions of the laws and documents referred to
therein, are correct in all material respects.
10. In addition, while we make no representation that we have
independently verified the accuracy or completeness of the information contained
in the documents incorporated by reference in the Prospectus, we have no reason
to believe that any of such documents (other than the financial statements and
related schedules and other financial data therein, as to which we express no
opinion or belief), when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading, in each case after excluding
any statement in any such documents which does not constitute part of the
Registration Statement or Prospectus pursuant to Rule 412 of Regulation C under
the 1933 Act. Further, while we make no representation that we have
independently verified the accuracy or completeness of the information contained
in the Registration Statement and the Prospectus (other than as set forth in
paragraph 9 above), we have no reason to believe that any part of the
Registration Statement, as of the date on which such part became effective, or
the Prospectus, as of its date or the date hereof (other than the financial
statements and related schedules and other financial data therein, as to which
we express no opinion or belief), contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
after excluding any statement in any such document which does not constitute
part of the Registration Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the 1933 Act; and we do not know of any contracts or other
documents of a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as required.
With your permission we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; (c) the truth,
accuracy and completeness of the information, factual matters, representations
and warranties contained in the records, documents, instruments and certificates
we have reviewed; and (d) that, except as specifically covered in the opinions
set forth above, the documents referred to herein were duly authorized, executed
and delivered on behalf of the respective patties thereto and that such
documents are legal, valid and binding obligations of such parties.
Whenever a statement herein is qualified by the phrases "we do not know,"
"known to us," "we have no reason to believe," or "to our knowledge," it is
intended to indicate that, during the course of our representation of the
Company, no information that would give us current actual knowledge of the
inaccuracy of such statement has come to the attention of those attorneys in
this firm who have rendered legal services in connection with the representation
described in the introductory paragraph of this opinion.
Our opinion that any document is valid, binding or enforceable is qualified
as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally; and
4
(b) general principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
With respect to our opinions in paragraphs 6 and 7, in passing on the form
of such documents, we have necessarily assumed the correctness and completeness
of the statements made therein.
We express no opinion as to matters of law other than laws of the State of
New York, the federal law of the United States of America and the Delaware
General Corporation Law. As you know, we are not licensed to practice law in the
State of Delaware, and our opinions herein as to such law are based solely on
our review of standard compilations of the Delaware General Corporation Law.
This opinion is solely for your benefit and may not be relied upon, used,
circulated, quoted or referred to, nor may copies hereof be delivered to, any
other person without our prior written approval. We disclaim any obligation to
update this opinion for events occurring or coming to our attention after the
date hereof.
Very truly yours,
5
Exhibit 2
[Form of Opinion of the Associate General Counsel of the Company]
February 15, 0000
Xxxx xx Xxxxxxx Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Barney Inc.
as Representatives of the several
Underwriters named on Schedule I hereto
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Providian Financial Corporation
Zero Coupon Convertible Notes due 2021
Ladies and Gentlemen:
I have acted as in-house counsel for Providian Financial Corporation (the
"Company") in connection with the Underwriting Agreement dated February 8, 2001
(the "Underwriting Agreement") between the Company and you, providing for the
sale by the Company to you of its Zero Coupon Convertible Notes due 2021 in an
aggregate principal amount at maturity of $. (the "Notes") pursuant to the
Indenture dated as of May 1, 1999, as supplemented by the Supplemental Indenture
dated as of February 15, 2001 (as so supplemented, the "Indenture"), between the
Company and Bank One Trust Company, N.A., as successor trustee. This opinion is
being furnished pursuant to Section 7(d) of the Underwriting Agreement.
Capitalized terms used but not otherwise defined herein have the meanings
specified in the Underwriting Agreement.
For purposes of rendering this opinion, I have examined originals or copies
identified to my satisfaction of the following documents:
(a) the Underwriting Agreement;
(b) the Indenture;
(c) the form of the Notes;
(d) the Prospectus;
(e) the Certificate of Incorporation and Bylaws of the Company, each as
amended to the date hereof; and
(f) a certificate of good standing with respect to the Company dated
February ., 2001
issued by the Delaware Secretary of State.
In addition, I have made such inquiries and investigations and reviewed
such corporate records as I have deemed necessary to render the opinions set
forth herein.
In this letter, the phrase "to my knowledge" refers to my actual knowledge
based on my review of the documents listed above and the information, inquiries
and investigations described herein and no others.
For purposes of this opinion, I have assumed (i) the due authorization,
execution and delivery of the Underwriting Agreement and the Indenture by all
parties thereto other than the Company; (ii) that all such parties other than
the Company have the legal power to act in the capacities in which they are to
act under such documents; (iii) that each such party other than the Company has
performed and will perform its obligations thereunder; (iv) that the
Underwriting Agreement and the Indenture are the legal, valid and binding
obligation of all parties thereto other than the Company, enforceable against
each such party in accordance with its terms; and (v) the conformity to the
original documents of any of the documents listed above submitted to me as
certified or photostatic copies, the authenticity of such documents and the
genuineness of all signatures on such documents.
Based upon and subject to the foregoing and to the assumptions,
qualifications and exceptions set forth below, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and the shares of Common Stock initially issuable upon conversion of
the Notes have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Notes and the
Indenture, will be duly and validly issued and fully paid and non-assessable,
and will conform in all material respects to the description of the Common Stock
contained in the Prospectus.
3. Each of the Underwriting Agreement, the Indenture and the Notes has
been duly authorized, executed and delivered by the Company.
4. The issue and sale of the Notes and the compliance by the Company with
the provisions of the Underwriting Agreement, the Indenture and the Notes, and
the consummation of the transactions therein contemplated, will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or instrument known to me to which the Company is a
party or by which the Company is bound, which conflict, breach or default, if
any, would individually or in the aggregate have a material adverse effect on
the business or financial position of the Company and its subsidiaries taken as
a whole; nor will any such action result in any violation of the Certificate of
Incorporation or Bylaws of the Company, or, to my knowledge, any applicable
federal laws of the United States of America or the Delaware General Corporation
Law or any rule or regulation thereunder or, to my knowledge, any order of any
court or governmental agency or body of the United States of America.
2
5. To my knowledge there are no actions, proceedings or investigations
pending or threatened against the Company or any of its subsidiaries before any
court, administrative agency or other tribunal which would individually or in
the aggregate reasonably be expected to have a material adverse effect on the
business or financial position of the Company and its subsidiaries taken as a
whole or are required to be disclosed in the Registration Statement which is not
disclosed or accurately summarized in all material respects in the Prospectus.
6. The statements set forth in the Prospectus under the caption
"Description of the Common Stock," insofar as it purports to constitute a
summary of the terms of the Stock, and under the captions "Providian Financial
Corporation - Regulatory Matters" and "Legal Proceedings", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are correct in all material respects.
This opinion is limited to the federal laws of the United States of America
and the Delaware General Corporation Law in effect on the date of this letter,
as applied to the factual circumstances on which I have relied (as set forth
above) in existence on the date hereof; provided that no opinion is expressed
herein as to the Act, as amended, the Securities Exchange Act of 1934, as
amended, or the Trust Indenture Act of 1939. I express no opinion as to the laws
of any other time or jurisdiction, or the applicability of the laws of any
particular jurisdiction, or the enforceability of any choice of law provision in
any of the documents referred to herein. I do not assume any continuing
obligation or responsibility to advise you of any changes in law, or any change
of circumstances of which I may become aware, which may affect the conclusions
reached in this opinion.
This opinion is delivered solely for your benefit in connection with the
transactions described herein and may not be relied upon by any other person or
for any other purpose, nor may it be used, circulated, published, communicated,
quoted or otherwise referred to or made available to any other person without,
in each instance, my prior written consent, except that this opinion may be
relied upon by Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP in giving their opinion to you
of even date herewith.
Very truly yours,
3
ANNEX II-A
List of Executive Officers
Xxxxxxxx X. Xxxxx
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx Xxxxxx
ANNEX II-B
Providian Financial Corporation
Form of Lock-Up Agreement
February ., 0000
Xxxx xx Xxxxxxx Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
as Representatives of the several
Underwriters named on Schedule I hereto
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Providian Financial Corporation - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as underwriters (the "Underwriters"),
propose to enter into an Underwriting Agreement with Providian Financial
Corporation, a Delaware corporation (the "Company"), providing for a public
offering of up to $. (including the exercise of the Underwriters' over-allotment
option) aggregate principal amount at maturity of the Company's Zero Coupon
Convertible Notes due 2021 (the "Securities"), convertible into shares of common
stock, par value $0.01 per share, of the Company (the "Shares"), pursuant to the
Registration Statement and the Prospectus (each as defined in the Underwriting
Agreement).
In consideration of the agreement by the Underwriters to offer and sell the
Securities, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date hereof and continuing to and including the
date 45 days after the date hereof, the undersigned will not offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any Shares or any other securities convertible or
exchangeable or exercisable for the Shares, whether now owned or hereinafter
acquired, owned directly by the undersigned or with respect to which the
undersigned has beneficial ownership within the rules and regulations of the
Securities and Exchange Commission (collectively the "Undersigned's Shares");
provided, however, that during the period commencing on the fifteenth day after
the date hereof and ending 45 days after the date hereof, the undersigned may
with the approval of the Chief Executive Officer of the Company and upon prior
notice to Banc of America Securities LLC of such transaction, engage in
transactions with respect to the Shares or any other securities convertible or
exchangeable or exercisable for the Shares, it being understood that no more
than 500,000 Shares (or any other securities convertible or exchangeable or
exercisable for the Shares) may, in
the aggregate, be sold by Xxxxxxxx X. Xxxxx, Xxxxx Xxxxxxx, Xxxxx X. Xxxxxxx,
Xxxxx Xxxxxx and all directors of the Company during this period.
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Undersigned's Shares even if such Shares would be disposed of by someone
other than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or any call option) with respect to
any of the Undersigned's Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, or (iii) with the prior written consent of Banc of America Securities
LLC. For purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In addition, notwithstanding the foregoing, if the undersigned is a corporation,
the corporation may transfer the capital stock of the Company to any wholly-
owned subsidiary of such corporation; provided, however, that in any such case,
it shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding such capital stock subject
to the provisions of this Agreement and there shall be no further transfer of
such capital stock except in accordance with this Agreement, and provided
further that, any such transfer shall not involve a disposition for value. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
Undersigned's Shares except in compliance with the foregoing restrictions.
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The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
____________________________________
Exact Name of Officer
____________________________________
Authorized Signature
____________________________________
Title
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