EXHIBIT 1
Providian Financial Corporation
3.25% Convertible Senior Notes due 2005
Underwriting Agreement
----------------------
August 17, 2000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx 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 $350,000,000 principal amount of the
Convertible Notes, 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, up to an aggregate of $52,500,000 additional aggregate principal
amount (the "Optional Securities") (the Firm Securities and the Optional
Securities which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities").
1. The Company represents and warrants to, and agrees with, the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-55937) (the
"Initial Registration Statement") in respect of the Securities and shares
of the Stock issuable upon conversion thereof has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, and other
than the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the preliminary and
final forms of prospectus and prospectus supplement, in the forms first
filed pursuant to Rule 424(b) under the Act, relating to the Securities
are hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Registration
Statement that is incorporated by reference in the Registration
Statement;
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you expressly for use
therein;
(c) The documents incorporated by reference in the Registration
Statement and Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such documents
contained, in the case of a registration statement which became effective
under the Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, 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, 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 under the Act; and any further documents so filed and incorporated
by reference in the Registration
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Statement or Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain, in the case of a registration statement which
becomes effective under the Act, an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and, in the case
of other documents which are filed under the Act or the Exchange Act, an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you expressly for use
therein;
(d) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by you expressly for use therein. Each Preliminary
Prospectus and the Prospectus delivered to you in connection with the
offering of the Securities are identical to any electronically filed copies
thereof filed with the Commission pursuant to the Commission's Electronic
Data Gathering and Analysis Retrieval System ("XXXXX"), except to the
extent permitted by Regulation S-T;
(e) 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;
(f) 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;
(g) 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
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and issued and are fully paid and non-assessable; the shares of Stock
initially 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;
(h) 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 first supplemental indenture to be dated as
of August 23, 2000 (collectively, the "Indenture") between the Company and
Bank One Trust Company, N.A., as Trustee (the "Trustee"), under which they
are to be issued, which will be substantially in the form filed as an
exhibit to the Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and when
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;
(i) 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;
(j) Neither the Company nor any Significant Subsidiary is in violation
of its Certificate of Incorporation 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
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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;
(k) 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;
(l) 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");
and
(m) 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 of the Commission thereunder.
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 97.25% of
the principal amount thereof, plus accrued interest, if any, from August 23,
2000 to the First Time of Delivery (as defined in Section (4) hereof) hereunder,
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 the same purchase price set forth in clause (a) of this
Section 2, that aggregate principal amount 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 $52,500,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount 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 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 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.
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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 Xxxxxxx, Xxxxx & Co. at least forty-eight
hours in advance, by causing DTC to credit the Securities to the account of
Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co. 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 August 23, 2000 or
such other time and date as Xxxxxxx, Xxxxx & Co. 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 Xxxxxxx, Xxxxx & Co. in the written notice
given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such
Optional Securities, or such other time and date as Xxxxxxx, Xxxxx & Co. 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 Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx 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 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 business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; 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
6
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 Preliminary Prospectus or 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 Preliminary Prospectus or 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 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);
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(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) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
(h) 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;
(i) 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
(j) To give you prior notice of any transactions of a type that would be
subject to the restrictions set forth in Annext IIB, either by any directors of
the Company or by any executive officers of the Company listed on Xxxxx XXX,
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.
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 Preliminary Prospectus
and the 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
8
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.
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;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; 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) Counsel for the Underwriters shall have furnished to you such written
opinion or opinions, dated such Time of Delivery, with respect to the
Securities, Stock issuable upon conversion of the Securities, the Indenture,
this Agreement, the Registration Statement, the Prospectus and such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Counsel for the Company satisfactory to you (which may be inside or
outside counsel) shall have furnished to you their written opinion dated such
Time of Delivery, in form and substance satisfactory to you, to the effect that:
(i) Each of the Company and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation with corporate
power and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) 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 Stock initially 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, will be duly and validly issued and
fully paid and non-assessable, and will conform in all material respects to
the description of the Stock contained in the Prospectus;
9
(iii) Such counsel does not know of any litigation or any governmental
proceeding instituted or threatened against the Company or any of its
consolidated subsidiaries which in such counsel's 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 the
Registration Statement which is not disclosed and accurately summarized in
the Prospectus as amended or supplemented;
(iv) This Agreement has been duly authorized, executed and delivered by
the Company;
(v) The Securities have been duly authorized, executed, issued and
delivered by the Company and, when duly authenticated by the Trustee, will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their 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 are
entitled to the benefits provided by the Indenture; and the Securities and
the Indenture conform in all material respects to the descriptions thereof
in the Prospectus;
(vi) The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, arrangements,
fraudulent conveyance, moratorium or other laws relating to or affecting
creditors' rights generally and to 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 considered in a proceeding in
equity or at law; and the Indenture has been duly qualified under the Trust
Indenture Act;
(vii) The issue and sale of the Securities being issued at such Time
of Delivery 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 of any of the terms or provisions of, or constitute a
default under any agreement or instrument known to such counsel 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 such action result
in any violation of the provisions of the Certificate of Incorporation or
the By-Laws of the Company or to such counsel's knowledge, any statute of
the United States of America or the Delaware General Corporation Law or any
rule or regulation thereunder (provided that no opinion need be expressed
in this paragraph as to compliance with the Act, the Trust Indenture Act,
the Exchange 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 such counsel's knowledge, any order of any
court or governmental agency or body of the United States of America;
(viii) 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
10
Securities being issued at such Time of Delivery by the Company or the
consummation by the Company of the other transactions contemplated by
this Agreement or the Indenture, except such as have been obtained under
the Act and the Trust Indenture Act, such as may be required under the
Act in connection with the shares of Stock issuable upon conversion of
the Securities and such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(ix) The statements set forth in the Prospectus under the captions
"Description of Convertible Notes" and "Description of the Common Stock,"
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the captions "Material United State
Federal Income Tax Considerations" and "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are correct in all material respects;
(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
(xi) 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 such counsel's knowledge,
no stop order suspending the effectiveness of the Registration Statement
has been issued under the Act and no proceedings for that purpose have been
instituted or are pending or threatened under Section 8(d) of the Act;
(xii) The documents incorporated by reference in the Prospectus (other
than the financial statements and related schedules and other financial
data therein, as to which such counsel need 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 Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder; and
(xiii) The Registration Statement, as of the date on which any part
thereof became effective, and the Prospectus, as of its date or the date of
such opinion (other than the financial statements and related schedules and
other financial data therein, as to which such counsel need express no
opinion or belief) complied or complies as to form in all material respects
with the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder.
In addition, such counsel shall state that while they make no
representation that they have independently verified the accuracy or
completeness of the information contained in the documents incorporated by
reference in the Prospectus, they 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 they need 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 Act. Further, such counsel shall state that while they make no
representation that they have independently verified the accuracy or
completeness of the information
11
contained in the Registration Statement and the Prospectus (other than as set
forth in subsection (ix) above), they 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 of such opinion
(other than the financial statements and related schedules and other financial
data therein, as to which they need 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
Act; and they 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.
(d) 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;
(e) 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;
(f) 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;
(g) 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 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;
12
(h) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the New York Stock
Exchange;
(i) 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 (e) of this Section
and as to such other matters as you may reasonably request; and
(j) The Underwriters shall have received from each executive officer of the
Company listed on Xxxxx XXX 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 Xxxxx XXX.
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, 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, 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 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 was
corrected in such Prospectus (or any amendment or supplement thereto).
(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, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any other prospectus relating to the Securities,
or any amendment or supplement
13
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, 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 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
14
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 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.
15
(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 you, 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 Xxxxxxx, Xxxxx & Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and 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.
16
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: .....................................
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By: ...................................
(Xxxxxxx, Xxxxx & Co.)
17
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or incorporated
by reference in the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the published rules and regulations thereunder; and if
applicable, they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the consolidated
interim financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to you;
(iii) In their opinion, the unaudited selected financial information, if
any, with respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 2 of the
Company's Form 10 or Item 6 of the Company's Annual Report on Form 10-K for
the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Form 10 or Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of profit,
consolidated statements of financial position and consolidated
statements of cash flows included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act and the
published rules and regulations thereunder or that any material
modifications should be made to such financial statements for them to
be in conformity with generally accepted accounting principles.
18
[(B) any unaudited income statement data and balance sheet
items, if any, included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Form 10 or Annual Report
on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;]
(D) any unaudited pro forma consolidated condensed financial
statements, if any, included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five business days
prior to the date of delivery of such letter, there have been any
changes in the capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated total assets or other items specified by you, or any
increases in any items specified by you, in each case as compared
with amounts shown in the latest statement of financial position
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E), there were any
decreases in consolidated total net interest income or net income or
other items specified by you, or any increases in any items
specified by you, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by you, except in each case for
decreases or increases which the Prospectus discloses have occurred
or may occur or which are described in such letter.
(v) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
subparagraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by you which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
19
exhibits and schedules to, the Registration Statement specified by you or in
documents incorporated by reference in the Prospectus specified by you, and have
compared certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries, and have found them to
be in agreement.
All references to the Prospectus in this Annex I shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein), as defined in the Underwriting Agreement, as of the Time of Delivery
referred to therein and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein), as defined in the Underwriting
Agreement, as of the date of the amendment, supplement, incorporation or the
execution date of the Underwriting Agreement requiring the delivery of such
letter under Section 7(d) thereof.
20
ANNEX II-A
List of Executive Officers
Xxxxxxxx X. Xxxxx
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx Xxxxxx
ANNEX II-B
Providian Financial Corporation
Lock-Up Agreement
August 17, 2000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
New York, NY 10004
Re: Providian Financial Corporation - Lock-Up Agreement
---------------------------------------------------
Ladies and Gentlemen:
The undersigned understands that you, as an underwriter (the
"Underwriter"), propose to enter into an Underwriting Agreement with Providian
Financial Corporation, a Delaware corporation (the "Company"), providing for a
public offering of up to $345,000,000 (including the exercise of the
Underwriter's over-allotment option) aggregate principal amount of the Company's
Convertible Senior Notes due August 2005 (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 Underwriter 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
F-2
(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 Xxxxxxx Xxxxx
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 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 Xxxxxxx, Xxxxx & Co. 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,
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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.
F-3
The undersigned understands that the Company and the Underwriter 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,
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Exact Name of Officer
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Authorized Signature
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Title
F-4
