EXHIBIT 2.5
EXHIBIT C TO
DISTRIBUTION AGREEMENT
TRANSITION SERVICES AGREEMENT
BETWEEN
PROVIDIAN CORPORATION
AND
PROVIDIAN BANCORP, INC.
Dated as of _______, 1997
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT, dated as of ____, 199_ (this "Agreement"),
by and between Providian Corporation, a Delaware corporation (the "Company"),
and Providian Bancorp, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company ("Spinco").
RECITALS
A. The Merger Transaction. The Company, AEGON N.V., a company organized
under the laws of The Netherlands ("Merger Partner"), and LT MERGER CORP., a
Delaware corporation and a wholly owned subsidiary of Merger Partner ("Sub"),
have entered into a Plan and Agreement of Merger and Reorganization, dated as of
December 28, 1996 (the "Merger Agreement"), providing for the Merger (as defined
in the Merger Agreement) of Sub with and into the Company, with the Company as
the surviving corporation.
B. The Distribution. Immediately prior to the Effective Time (as defined
in the Merger Agreement), the Company intends to distribute (the "Distribution")
as a dividend to the holders of the Company's common stock, par value $1.00 per
share, on a pro rata basis, all of the then outstanding shares of common stock,
par value $1.00 per share, of Spinco.
C. Purpose. The purpose of the Distribution is to facilitate the
reorganization of the Company, and to make possible the Merger by divesting the
Company of the businesses and operations conducted by Spinco in a tax-free
distribution to the Company's stockholders. The Company and Spinco have entered
into an Agreement and Plan of Distribution (the "Distribution Agreement"), which
sets forth or provides for certain agreements between the Company and Spinco in
consideration of the separation of their ownership.
D. This Agreement. Among other things, the Distribution Agreement
provides that the Company and Spinco will enter into this Transition Services
Agreement regarding certain administrative and operational functions of the
businesses conducted by the Company and Spinco for a transition period after the
Distribution Date.
NOW, THEREFORE, in consideration of the premises and of the respective
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the following respective meanings (capitalized terms used but not
defined herein shall have the respective meanings ascribed thereto in the
Distribution Agreement):
"Agreement" shall have the meaning specified in the first paragraph hereof.
2
"Company" shall have the meaning specified in the first paragraph hereof.
"Distribution" shall have the meaning specified in the recitals to this
Agreement.
"Distribution Agreement" shall have the meaning specified in the recitals
to this Agreement.
"Merger Agreement" shall have the meaning specified in the recitals to this
Agreement.
"Spinco" shall have the meaning set forth in the first paragraph hereof.
"Transition Period" shall have the meaning specified in Section 2.01.
"Transition Services" shall have the meaning specified in Section 2.01.
ARTICLE II
TRANSITION SERVICES
Section 2.01. Transition Period. For a period of 180 days beginning on
the Distribution Date (the "Transition Period"), the Company shall make
available to Spinco the services described below in Section 2.03 (the
"Transition Services"). The Company shall only be obligated to provide
Transition Services during normal business hours and in a manner that will not
interfere with the Company's business operations.
Section 2.02. Fees. Spinco shall reimburse the Company for the Company's
allocable overhead and any reasonable out-of-pocket expenses (including the
reasonable costs of salaries and benefits of employees providing such services)
incurred by the Company in providing the Transition Services. Any payments
required to be made hereunder shall be due and payable within 30 days of date of
invoice.
Section 2.03. Transition Services. During the Transition Period, the
Company shall make available to Spinco certain administrative services relating
to financial, tax, accounting, legal, human resources and other administrative
services, as set forth on Schedule 2.03 hereto (the "Transition Services").
Section 2.04. Performance of Transition Services. The Company agrees to
perform the Transition Services to be provided hereunder in a professional and
competent manner, using at least the same standard of care that it uses in
performing such services in its own affairs.
3
ARTICLE III
NO WARRANTIES; LIMITATION ON LIABILITY
Section 3.01. No Warranties. THE COMPANY MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE TRANSITION SERVICES TO
BE PROVIDED HEREUNDER.
Section 3.02. Limitation on Liability. In no event shall the Company be
liable for any incidental or consequential damages to Spinco arising from the
provision of the Transition Services by the Company hereunder, other than for
the Company's gross negligence or willful misconduct.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Cooperation. The parties hereto shall cooperate with each
other and shall cause their officers, employees, agents, auditors and
representatives to cooperate with each other during the Transition Period to
facilitate the orderly transition of the separation of the Company Business and
the Spinco Business and to minimize any disruption to the respective Businesses
that might result from the transactions contemplated by the Distribution
Agreement and hereby.
Section 4.02. Relationship of the Parties. The parties hereto agree that,
after the Distribution Date, nothing herein shall constitute, be construed to
be, or create a partnership, joint venture or similar relationship between them,
and that any actions performed by or on behalf of another party hereunder shall
be as an agent for such other party.
Section 4.03. Amendments. This Agreement may be amended, modified or
supplemented only by a written agreement signed by all of the parties hereto.
Section 4.04. Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 4.05. Termination. This Agreement shall be terminated in the
event that the Distribution Agreement is terminated and the Distribution is
abandoned prior to the Distribution Date. In the event of such termination,
neither party shall have any liability of any kind to the other party.
Section 4.06. Incorporation by Reference. The following provisions of the
Distribution Agreement are hereby incorporated into this Agreement by reference
(except that references therein to the Distribution Agreement shall be deemed to
be references to this Agreement): Section 8.06 (Confidentiality); Section 10.04
(Governing Law); Section 10.05 (Notices); Section
4
10.09 (Counterparts); Section 10.10 (Interpretation); Section 10.11
(Severability); Section 10.12 (References; Construction).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PROVIDIAN CORPORATION
By:
----------------------------------------
Name:
Title:
PROVIDIAN BANCORP, INC.
By:
----------------------------------------
Name:
Title:
SCHEDULE 2.03
TO TRANSITION SERVICES AGREEMENT
Transition Services
-------------------
I. Human Resources
A. Employee benefit program administration and development, including
with respect to:
1. stock purchase plan
2. bonus program
3. deferred compensation
4. stock options
5. claims paying
II. Accounting/Controller
A. SEC accounting advice
B. Financial audit relationship with Ernst and Young
C. Tax administrative accounting activities, with respect to providing
information regarding:
1. sharing agreements
2. services and advice
3. records
4. liability for prior years
D. General financial record keeping
E. Purchasing
III. Corporate
A. Insurance administration
IV. Legal
A. Tax law
V. Miscellaneous
A. Network integration and protocol administration services
B. Providian Home Loans Louisville office space, facilities, maintenance
and services
