EXHIBIT 10.30
PROVIDIAN NATIONAL BANK
$4,000,000,000
SENIOR BANK NOTES
AND
SUBORDINATED BANK NOTES
DUE FROM 7 DAYS TO 15 YEARS FROM DATE OF ISSUE
Distribution Agreement
----------------------
February 20, 1998
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ Brothers
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Providian National Bank, a national banking association (the "Bank"),
proposes to issue and sell from time to time its (i) senior unsecured debt
obligations not insured by the Federal Deposit Insurance Corporation (the
"FDIC") with maturities from 7 days to not more than one year from date of issue
(the "Short-Term Senior Bank Notes"), (ii) senior unsecured debt obligations not
insured by the FDIC with maturities of more than one year to 15 years from date
of issue (the "Medium-Term Senior Bank Notes," and, together with the Short-Term
Senior Bank Notes, the "Senior Bank Notes"), and (iii) subordinated unsecured
debt obligations not insured by the FDIC with maturities of five years to 15
years from date of issue (the "Subordinated Bank Notes," and, together with the
Senior Bank Notes, the "Bank Notes") and agrees with you (the "Agents") with
respect to the issue and sale of the Bank Notes as set forth in this Agreement.
The Bank is a wholly-owned subsidiary of Providian Financial Corporation, a
Delaware corporation ("PFC").
As of the date hereof, the Bank has authorized the issuance of up to
$1,000,000,000 aggregate principal amount at any one time outstanding of Senior
Bank Notes with maturities from 7 days to not more than 270 days from date of
issue and $2,500,000,000 aggregate principal amount of Senior Bank Notes with
maturities of more than 270 days to 15 years from date of issue. In addition,
the Bank has authorized the issuance of up to $500,000,000 aggregate principal
amount of its Subordinated Bank Notes. It is understood, however, that the Bank
may from time to time authorize the issuance of an additional amount of Bank
Notes and that such Bank Notes may be sold to or distributed through the Agents
pursuant to the terms of this Agreement, as though the issuance of such Bank
Notes were authorized as of the date hereof.
The Bank Notes will be issued under an issuing and paying agency agreement,
dated as of February 20, 1998 (the "Issuing and Paying Agency Agreement"),
between the Bank and The First National Bank of Chicago, as Issuing and Paying
Agent (the "Issuing and Paying Agent"). The Bank Notes shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Offering Circular referred to below as it may be amended or supplemented
from time to time. The Bank Notes will be issued, and the terms and rights
thereof established, from time to time by the Bank in accordance with the
Issuing and Paying Agency Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Bank of the right to sell Bank Notes directly on its own behalf in those
jurisdictions where it is authorized to do so, the Bank hereby (i) agrees that,
except as otherwise contemplated herein, whenever it determines to sell Bank
Notes directly to an Agent as principal for resale to investors and other
purchasers, it will enter into a separate agreement with such Agent (each, a
"Terms Agreement"), which may be substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(a) hereof and (ii) appoints
the Agents as its agents for the purpose of soliciting and receiving offers to
purchase Bank Notes from it pursuant to Section 2(b) hereof. This Agreement
shall not be construed to create either an obligation on the part of the Bank to
sell any Bank Notes or an obligation of any Agent to purchase any Bank Notes as
principal.
The appointment of the Agents hereunder is not exclusive and the Bank may
from time to time offer Bank Notes for sale otherwise than to or through an
Agent, either through another agent on terms substantially identical to the
terms of this Agreement or on its own behalf. The Bank reserves the right to
sell, and may solicit and accept offers to purchase, Bank Notes directly on its
own behalf, and, in the case of any such sale not resulting from a solicitation
made by an Agent, no commission will be payable with respect to such sale.
1. The Bank represents and warrants to, and agrees with, the Agents that:
(i) The Bank has prepared an offering circular, dated February 20,
1998, to be used by the Agents in connection with the Agents' solicitation
of purchasers of or offering of the Bank Notes. Such offering circular, in
the form transmitted for filing with the Office of the Comptroller of the
Currency of the United States (the "Comptroller"), pursuant to 12 C.F.R.
Section 16.6 is referred to herein as the "Offering Circular"; provided,
however, that if any amendment or supplement shall be provided to the
Agents for use in connection with the offering of the Bank Notes, whether
or not the same is required to be filed with the Comptroller pursuant to 12
C.F.R. Section 16.6, the term "Offering Circular" shall be deemed to refer
to and include such amendment or supplement from and after the time it is
first provided to the Agents for use. Any reference to the Offering
Circular shall also be deemed to refer to and include all documents
incorporated by reference, including the Call Reports and the Periodic
Reports (as such terms are hereinafter defined) incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Offering Circular shall be deemed to
include the filing of any Call Report or Periodic Report with any bank
regulatory agency or the Securities and Exchange Commission (the
"Commission") after the date of this Agreement or the Offering Circular, as
the case may be. The Offering Circular, as of the date hereof, complies
with, and as of each date that this representation is affirmed in
accordance with Section 4(k) hereof, will comply with, the applicable
requirements of 12 C.F.R. Part 16 (including 12 C.F.R. Section 16.6); and
the Offering Circular does not, and as of each date that this
representation is affirmed in accordance with Section 4(k) hereof, will
not, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they are made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements or omissions from the Offering
Circular made in reliance upon and in conformity with information furnished
to the Bank in writing by any Agent expressly for use therein. The Bank
will incorporate by reference in the Offering Circular the publicly
available portions of each of its Consolidated Reports of Condition and
Income (each, a "Call Report") which the Bank has filed with the FDIC, as
well as any amendments or supplements thereto, beginning with and including
the Call Report for the period ended December 31 of the third calendar year
prior to the date of the Offering Circular to and including the most recent
Call Report filed or published prior to an offering pursuant to the
Offering Circular. The publicly available portions of any Call Reports
filed by the Bank subsequent
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to the date of the Offering Circular and prior to the termination of the
offering of the Bank Notes will be incorporated therein by reference. Call
Reports for the Bank for the reporting periods ending prior to January 1,
1998 were filed under the Bank's former name, First Deposit National Bank.
In addition, the Bank has been authorized by PFC to incorporate by
reference in the Offering Circular, and will incorporate by reference into
the Offering Circular, PFC's Registration Statement on Form 10 (as filed
with the Commission effective April 18, 1997), annual reports on Form 10-K
for its most recently ended fiscal year, quarterly reports on Form 10-Q
since its most recently ended fiscal year, current reports on Form 8-K
since its most recently ended fiscal year and any other document filed by
PFC with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations of the Commission thereunder (the "Periodic Reports"). The
documents incorporated by reference into the Offering Circular, at the time
they were or hereafter are filed with the applicable federal regulatory
authorities, complied or when so filed will comply in all material respects
with the applicable requirements of the Comptroller or the applicable
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder or the rules and regulations otherwise applicable
thereto, as the case may be, and, when read together with the other
information in the Offering Circular, did not and will not, as of the
respective dates of their incorporation by reference into the Offering
Circular, include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances in which they were or
are made, not misleading;
(ii) Since the respective dates as of which information is given in
the Offering Circular, (a) there has not been any material adverse change
in or affecting the condition, financial or otherwise, business affairs, or
business prospects of the Bank or its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Offering Circular; and
(b) there have been no material transactions entered into by the Bank or
any of its subsidiaries other than those in the ordinary course of business
and other than those which have been disclosed in the Offering Circular or
any document incorporated by reference into the Offering Circular;
(iii) The Bank has been duly organized and is validly existing as a
national banking association in good standing under the laws of the United
States; is qualified to conduct the business in which it is engaged in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, 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 Bank and its subsidiaries taken as a whole;
and has the power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Circular;
(iv) All of the issued shares of capital stock of the Bank have been
duly and validly authorized and issued and are fully paid and non-
assessable and are owned directly or indirectly by PFC;
(v) The Bank Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, the Issuing and Paying Agency
Agreement and any Terms Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Bank, enforceable against the Bank in accordance
with their terms and entitled to the benefits provided by the Issuing and
Paying Agency Agreement, under which they are to be issued, subject, as to
enforcement, to applicable bankruptcy, liquidation, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to, or affecting, creditors' rights and the rights of creditors of
national banking associations and the FDIC as conservator or receiver and
to general equity principles (whether enforcement is sought in a proceeding
in equity or at law); the Issuing and Paying Agency Agreement has been duly
authorized, executed and delivered by the Bank and, when executed and
delivered by the Issuing and Paying Agent, will constitute a valid and
legally binding agreement of the Bank, enforceable against the Bank in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, liquidation, insolvency, reorganization, moratorium and similar
laws of general applicability relating to, or affecting, creditors' rights
and the rights of creditors of national banking associations and the FDIC
as conservator or receiver and to general equity principles (whether
enforcement is sought in a proceeding in equity or at law); the Issuing and
Paying Agency
3
Agreement conforms and the Bank Notes will conform to the descriptions
thereof in the Offering Circular; and the Issuing and Paying Agency
Agreement is and the Bank Notes will be substantially in the form
previously delivered to the Agents;
(vi) This Agreement, any Terms Agreement and the Letters of
Representations, dated February 20, 1998 (the "Letters of
Representations"), between the Bank, the Issuing and Paying Agent and The
Depository Trust Company have been duly authorized, executed and delivered
by the Bank and are valid and legally binding agreements of the Bank,
enforceable against the Bank in accordance with their respective terms,
subject, as to enforcement, to applicable bankruptcy, liquidation,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to, or affecting, creditors' rights and the rights
of creditors of national banking associations and the FDIC as conservator
or receiver and to general equity principles (whether enforcement is sought
in a proceeding in equity or at law);
(vii) The issue and sale of the Bank Notes, the compliance by the
Bank with all of the provisions of the Bank Notes, the Issuing and Paying
Agency Agreement, this Agreement and any Terms 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, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Bank or any of its subsidiaries, pursuant to any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Bank or any of its subsidiaries is a party or by which the Bank
or any of its subsidiaries is bound or to which any of their properties or
assets are subject, nor will such action result in any violation of the
charter or the by-laws of the Bank, or any statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Bank, any of its subsidiaries or any of its properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Bank Notes, the issue
and sale of the Bank Notes or the consummation by the Bank of the other
transactions contemplated by this Agreement, any Terms Agreement or the
Issuing and Paying Agency Agreement, except (a) such as may be required by
the securities or Blue Sky laws of the various states in connection with
the solicitation by any Agent of offers to purchase Bank Notes from the
Bank and with purchases of Bank Notes by any Agent as principal, as the
case may be, in each case in the manner contemplated hereby, (b) the
Offering Circular and any amendments thereto (other than amendments which
contain only pricing information relating to a particular transaction, Call
Reports or filings under the 1934 Act incorporated by reference, updated
financial information concerning the Bank or non-material information
relating to the program contemplated hereby), must be filed by the Bank
with the Comptroller pursuant to 12 C.F.R. Section 16.6, and (c) with
respect to Subordinated Bank Notes offered by the Bank notice must be filed
with the Comptroller pursuant to 12 C.F.R. Section 5.47 in order for such
Subordinated Bank Notes to be counted as Tier 2 capital of the Bank;
(ix) Neither the Bank or any of its subsidiaries is in violation of
its charter or by-laws or is in default in the performance or observance of
any material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound, other than any such default or defaults which, individually
or in the aggregate, would not reasonably be expected to have a material
adverse effect on the Bank and its subsidiaries taken as a whole;
(x) The statements set forth in the Offering Circular under the
caption "Description of Notes," insofar as they purport to constitute a
summary of the terms of the Bank Notes, are accurate in all material
respects;
(xi) Other than as set forth in the Offering Circular (including any
document incorporated therein by reference), there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic
or foreign, now pending, or, to the knowledge of the Bank, threatened
against or affecting, the Bank or any of its subsidiaries, which, if
determined adversely to the Bank or any of its subsidiaries, would, in the
reasonable judgment of the Bank,
4
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Bank and its subsidiaries, or which would, in
the reasonable judgment of the Bank, adversely affect the consummation of
this Agreement, any Terms Agreement, the Issuing and Paying Agency
Agreement or any transaction contemplated hereby or thereby;
(xii) The Senior Bank Notes, when issued, authenticated and
delivered pursuant to this Agreement, will be unsecured and
unsubordinated debt obligations of the Bank and rank pari passu among
themselves and with all other unsecured and unsubordinated debt
obligations of the Bank except, pursuant to Section 11(d)(11) of the
Federal Deposit Insurance Act, the Bank's unsecured deposit liabilities;
and the Subordinated Bank Notes are unsecured and subordinated debt
obligations of the Bank, rank pari passu among themselves, and are
subordinate and junior in right of payment to the Bank's obligations to
its depositors and general creditors, other than obligations which, by
their express terms, rank on a parity with or junior to the Subordinated
Bank Notes;
(xiii) The Bank is not, and after giving effect to the offer and sale
of the Bank Notes, 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");
(xiv) Neither the Bank nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(xv) ▇▇▇▇▇ & Young LLP, who have certified certain financial
statements of PFC, incorporated by reference in the Offering Circular, are
independent public accountants as required by the Securities Act of 1933,
as amended (the "1933 Act"), and the rules and regulations of the
Commission thereunder;
(xvi) The Bank Notes of the Bank at the time such Bank Notes are
issued will have been rated by a "nationally recognized statistical rating
organization" (as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the 1933 Act) and by each other nationally recognized
statistical rating agency that has rated the Bank Notes of the Bank, in one
of its four highest categories;
(xvii) The financial statements and other financial information of
the Bank included in, incorporated by reference in, or made available
pursuant to, the Offering Circular (other than information contained in the
Call Reports) present fairly the consolidated financial position of the
Bank, as of the date indicated therein and the consolidated results of its
operations for the periods specified therein; and except as stated therein,
such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis (except as may be indicated in the notes thereto), subject to normal
year-end adjustments; and the Call Reports of the Bank included or
incorporated by reference in the Offering Circular present fairly the
financial position of the Bank and the results of its operations for the
periods specified therein, and except as stated therein, have been prepared
in conformity with regulatory instructions issued by the Federal Financial
Institutions Examination Counsel applied on a consistent basis;
(xviii) The Bank Notes are exempt from registration under Section
3(a)(2) of the 1933 Act and, in addition, the Senior Bank Notes with
maturities ranging from 7 days to not more than 270 days from date of issue
are exempt from registration under Section 3(a)(3) of the 1933 Act.
Neither registration of the Bank Notes under the 1933 Act nor qualification
of an indenture under the Trust Indenture Act of 1939, as amended, will be
required in connection with the offer, sale, issuance or delivery of the
Bank Notes pursuant to this Agreement or any Terms Agreement. The
requirements of 12 C.F.R. Part 16 (including those contained in 12 C.F.R.
Section 16.6) have been and will be satisfied in connection with the offer,
sale, issuance or delivery of the Bank Notes pursuant to this Agreement and
any Terms Agreement; and
5
(xix) The Bank Notes, when issued, authenticated and delivered
pursuant to the terms of this Agreement, any Terms Agreement and the
Issuing and Paying Agency Agreement, will be excluded or exempted under
the provisions of the Commodity Exchange Act.
2. (a) Unless otherwise agreed upon by an Agent and the Bank, each
Agent shall act as an agent (and not as principal) of the Bank when soliciting
offers to purchase the Bank Notes. Each sale of Bank Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless the Bank and such Agent shall otherwise agree) a Terms Agreement which
will provide for the sale of such Bank Notes to, and the purchase thereof by,
such Agent. The Terms Agreement may take the form of an oral agreement, which
shall be confirmed in a writing, prepared by each Agent and sent via facsimile
transmission to the Bank. The commitment of an Agent to purchase Bank Notes as
principal, whether pursuant to any Terms Agreement or otherwise, shall be
deemed to have been made on the basis of the representations and warranties of
the Bank herein contained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall specify the principal amount of
Bank Notes to be purchased by an Agent pursuant thereto, the price to be paid
to the Bank for such Bank Notes, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the reoffering of
the Bank Notes and the time and date and place of delivery of and payment for
such Bank Notes. Such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant
to Section 4 hereof.
Unless otherwise agreed, for each such sale of Bank Notes to an Agent as
principal, the Bank agrees to pay such Agent a commission (or grant an
equivalent discount) as provided in Section 2(b) hereof and in accordance with
the schedule set forth therein. An Agent may engage the services of any other
broker or dealer in connection with the resale of the Bank Notes purchased by it
as principal and may allow any portion of the commission (or equivalent
discount) received in connection with such purchases from the Bank to such
brokers and dealers. Each Agent proposes to offer Bank Notes purchased by it as
principal for sale at prevailing market prices or prices related thereto at the
time of sale, which may be equal to, greater than or less than the price at
which such Bank Notes are purchased by such Agent from the Bank.
Each time and date of delivery of and payment for Bank Notes to be
purchased by an Agent as principal is referred to herein as a "Time of
Delivery."
(b) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each Agent
hereby agrees, as agent of the Bank, to use its reasonable efforts to solicit
and receive offers to purchase the Bank Notes from the Bank upon the terms and
conditions set forth in the Offering Circular as amended or supplemented from
time to time. Each Agent will communicate to the Bank, orally, each offer to
purchase Bank Notes solicited by such Agent on an agency basis, other than those
offers rejected by the Agents. Each Agent shall have the right, in its
reasonably exercised discretion, to reject any proposed purchase of Bank Notes,
as a whole or in part, and any such rejection shall not be deemed a breach of
such Agent's agreement contained herein. The Bank may accept or reject any
proposed purchase of the Bank Notes, in its absolute discretion, in whole or in
part. All Bank Notes sold through an Agent as agent will be sold at 100% of
their principal amount unless otherwise agreed by the Bank and such Agent.
The Bank reserves the right, in its sole discretion, to instruct the Agents
to suspend at any time, for any period of time or permanently, the solicitation
of offers to purchase the Bank Notes. As soon as practicable, but in any event
not later than one business day in New York City, after receipt of notice from
the Bank, the Agents will suspend solicitation of offers to purchase Bank Notes
from the Bank until such time as the Bank has advised the Agents that such
solicitation may be resumed. During such period, the Bank shall not be required
to comply with the provisions of Sections 4(m) and 4(n). Upon advising the
Agents that such solicitation may be resumed, however, the Bank shall
simultaneously provide the documents required to be delivered by Sections 4(m)
and 4(n), and the Agents shall have no obligation to solicit offers to purchase
the Bank Notes until such documents have been received by the Agents. In
addition, any failure by the Bank to comply with its obligations hereunder,
including without limitation its obligations to deliver the documents required
by Sections 4(m) and 4(n), shall automatically terminate the Agents' obligations
hereunder, including without limitation their obligations hereunder to purchase
Bank Notes hereunder as principal or to solicit offers to purchase Bank Notes.
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The Bank agrees to pay each Agent a commission, at the time of settlement
of any sale of a Bank Note by the Bank as a result of a solicitation made by
such Agent, in an amount equal to, unless otherwise agreed by the Bank and such
Agent, the following applicable percentage of the principal amount of such Bank
Note sold:
Commission
(percentage of
aggregate principal
amount of Bank Notes
Range of Maturities sold)
---------------------------------- -----------------------
From 7 days to 270 days .050%
From 271 days to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
(c) Procedural details relating to the issue and delivery of Bank
Notes and payment therefor shall be as set forth in the Administrative
Procedures attached hereto as ▇▇▇▇▇ ▇▇ as they may be amended from time to time
by written agreement between the Bank and the Agents (the "Administrative
Procedures"). The provisions of the Administrative Procedures shall apply to
all transactions contemplated hereunder. The Bank will furnish to the Issuing
and Paying Agent a copy of the Administrative Procedures as from time to time in
effect.
(d) The Bank shall not approve the solicitation of purchases of
Bank Notes in excess of the amount which shall be authorized to be issued or
outstanding, as the case may be, by the Bank from time to time or in excess of
the aggregate principal amount of Bank Notes specified in the Offering Circular.
The Agents will have no responsibility for maintaining records with respect to
the aggregate principal amount of Bank Notes sold or outstanding, or of
otherwise monitoring the availability of Bank Notes for sale.
(e) Neither the Agents nor the Bank will have any agreement,
understanding or other arrangement for the extension, renewal or automatic
rollover of any of the Bank Notes with maturities ranging from 7 days to not
more than 270 days from date of issue. The Bank will use the proceeds of such
Bank Notes in connection with financing current transactions within the meaning
of Section 3(a)(3) of the 1933 Act.
(f) The Agents agree, with respect to any Bank Note denominated in
a currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Bank Note
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
(g) In compliance with 12 C.F.R. Part 16, each Agent agrees to
offer the Notes only to institutional investors that are "accredited
investors" within the meaning of Rule 501 of the 1933 Act.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Brown & Wood LLP, New York, New York, at 11:00 a.m., New York City
time, on the date of this Agreement, which date and time of such delivery may be
postponed by agreement between the Bank and the Agents but in no event shall be
later than the day prior to the date on which solicitation of offers to purchase
Bank Notes is commenced or on which any Terms Agreement is executed (such time
and date being referred to herein as the "Commencement Date").
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4. The Bank covenants and agrees with the Agents that:
(a) The Bank will give the Agents notice of its intention to prepare
any additional offering circular supplement with respect to the sale of the Bank
Notes or any amendment or supplement to the Offering Circular (other than Call
Reports and Periodic Reports incorporated by reference) and will furnish the
Agents with copies of any such amendment or supplement or other documents
proposed to be distributed a reasonable time in advance of such proposed
distribution and will not distribute any such amendment or supplement or other
documents in a form to which the Agents or counsel for the Agents shall
reasonably object. The Bank will promptly cause such amendments and supplements
to be filed with the Comptroller when and to the extent required by 12 C.F.R.
Section 16.6 and will promptly advise the Agents of the filing of any amendment
or supplement to the Offering Circular with the Comptroller. The Bank will
cause to be prepared, with respect to any Bank Notes to be sold by it to or
through an Agent pursuant to this Agreement, a Pricing Supplement with respect
to such Bank Notes in a form previously approved by the Agents;
(b) The Bank will immediately advise the Agents (i) of any request by
the Comptroller, any other bank regulatory agency or the Commission for any
amendment of or supplement to the Offering Circular (including, without
limitation, the documents incorporated by reference therein) or for any
additional information with respect to the offering of the Bank Notes; (ii) of
the institution or threat by the Comptroller, any other bank regulatory agency
or the Commission of any proceeding with respect to the Offering Circular
(including, without limitation, the documents incorporated by reference therein)
or any amendment or supplement thereto or the offering or sale of the Bank
Notes, (iii) of the receipt by the Bank of any notification with respect to the
suspension of the qualification of the Bank Notes for sale in any jurisdiction
in which the Bank Notes are then being sold to purchasers or the initiation or
overt threat of any proceeding for such purpose, and (iv) any change in the
rating assigned by any nationally recognized statistical rating organization to
any unsecured debt securities of the Bank or the public announcement by any such
organization that it has under surveillance or review, with negative
implications, its rating of any of the Bank's unsecured debt securities. With
regard to Clauses (i), (ii) and (iii) hereof, the Bank will use its reasonable
best efforts to prevent the issuance of any order or similar action interfering
with the offering or sale of the Bank Notes or the use of the Offering Circular,
and, if issued, to obtain as soon as possible the withdrawal thereof;
(c) The Bank will endeavor, in cooperation with the Agents, to qualify
the Bank's Bank Notes for offering and sale under the securities laws of such
jurisdictions as the Agents may reasonably request and to comply with such laws
so as to permit the continuance of sales and dealings therein for as long as may
be necessary to complete the distribution or sale of the Bank Notes; provided,
however, that in connection therewith the Bank shall not be required to qualify
as a foreign corporation or to file a general consent to service of process in
any jurisdiction; and the Bank will file such statements and reports as may be
required by the laws of each jurisdiction in which the Bank Notes have been
qualified as above provided;
(d) The Bank will furnish the Agents with copies of the Offering
Circular and each amendment or supplement thereto, other than any Pricing
Supplement (except as provided in the Administrative Procedure), in such
quantities as the Agents may reasonably request from time to time; and if any
event shall have occurred as a result of which the Offering Circular 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 the light of the circumstances under which they were made when such
Offering Circular is delivered to a purchaser, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Offering Circular,
immediate notice shall be given, and confirmed in writing to the Agents, to
cease sales of any Bank Notes the Agents may then own as principal and to
suspend solicitation of offers to purchase Bank Notes in their capacity as
agents of the Bank (and, if so notified, such Agent shall cease such sales and
solicitations as soon as practicable, but in any event not later than one
business day later); and the Bank shall promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or omission;
(e) The Bank shall not be required to comply with the provisions of
Subsection (d) of this Section 4 during any period from the later of the time
when (i) the Agents shall have suspended solicitation of purchases of the Bank
Notes in their capacity as agents pursuant to a request from the Bank
8
and (ii) the Agents shall not hold any Bank Notes purchased as principal
pursuant hereto, until the time the Bank shall determine that solicitation of
purchases of the Bank Notes should be resumed or the Agents shall subsequently
purchase Bank Notes from the Bank as principal;
(f) So long as any Bank Notes are outstanding, the Bank will cause to
be furnished to the Agents copies of all reports or other communications
(financial or other) furnished to PFC's public stockholders, and deliver to the
Agents (i) as soon as they are available, copies of any publicly available
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of PFC is
listed; and (ii) such additional publicly available information concerning the
business and financial condition of PFC, the Bank or any of their subsidiaries
as the Agents may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of PFC and
its subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(g) The Bank shall provide the Agents with copies of the publicly
available portion of the most recent Call Reports of the Bank;
(h) The Bank will make the filings required by 12 C.F.R. Section 16.6
with respect to the Bank Notes and by 12 C.F.R. Section 5.47 with respect to
inclusion of the Subordinated Bank Notes in Tier 2 capital when and as required
by such provisions;
(i) The Bank shall not take any action which would cause it to be in
default (within the meaning of Section 18(b) of the Federal Deposit Insurance
Act) in the payment of any assessment owing to the FDIC;
(j) If specified by an Agent in the applicable Terms Agreement or
other agreement to purchase Bank Notes as principal, from the date of such Terms
Agreement with such Agent or other agreement by such Agent to purchase Bank
Notes as principal and continuing to and including the related Time of Delivery,
the Bank will not, without the prior consent of such Agent, offer, sell,
contract to sell or otherwise dispose of any debt securities or deposit
obligations of the Bank which both mature more than 270 days after such Time of
Delivery and are substantially similar to the Bank Notes (other than the Bank
Notes that are to be sold pursuant to such agreement and deposit and other bank
obligations (including but not limited to purchases of federal funds) issued and
sold directly by, or through an agent, broker or dealer of, the Bank in the
ordinary course of the Bank's business);
(k) Each acceptance by the Bank of an offer to purchase Bank Notes
hereunder (including any purchase by an Agent as principal not pursuant to a
Terms Agreement), and each execution and delivery by the Bank of a Terms
Agreement to an Agent, shall be deemed to be an affirmation to such Agent that
the representations and warranties of the Bank contained in or made pursuant to
this Agreement are true and correct as of the date of such acceptance or sale,
as the case may be, as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct as of the
settlement date for the Bank Notes relating to such acceptance or as of the Time
of Delivery relating to such sale, as the case may be, as though made at and as
of such date (except that such representations and warranties shall be deemed to
relate to the Offering Circular as amended and supplemented at the time of such
acceptance or sale and except to the extent such representations and warranties
expressly relate to an earlier date);
(l) That reasonably in advance of the Commencement Date and each Time
of Delivery, Brown & Wood LLP, as counsel to the Agents, shall have been
furnished with such documents and opinions as such counsel may reasonably
request for the purpose of enabling such counsel to pass upon the issuance and
sale of the Bank Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy and completeness of any of the representations
and warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Bank in connection with the issuance and sale
of Bank Notes as herein contemplated shall be satisfactory in form and substance
to the Agents and counsel to the Agents;
(m) That each time (i) the Offering Circular shall be amended or
supplemented (other than by a Pricing Supplement), (ii) there is filed with the
Commission or any bank regulatory agency any
9
document that is incorporated by reference into the Offering Circular, (iii) the
Bank sells Bank Notes to an Agent as principal pursuant to a Terms Agreement and
such Terms Agreement specifies the delivery of an opinion under this Section
4(m) as a condition to the purchase of Bank Notes pursuant to such Terms
Agreement, or (iv) the Bank issues and sells Bank Notes in a form not previously
provided to the Agents by the Bank, the Bank shall, if so requested by an Agent
or specified in such Terms Agreement, furnish or cause to be furnished forthwith
to such Agent a letter of the Bank's General Counsel, or other counsel for the
Bank satisfactory to such Agent, and Brown & Wood LLP, or other counsel
satisfactory to such Agent, dated the date of such amendment, supplement,
filing, Time of Delivery or settlement date relating to such sale, as the case
may be, in form satisfactory to such Agent, to the effect that such Agent may
rely on the opinions of such counsel referred to in Sections 6(a) and 6(b)
hereof which were last furnished to such Agent to the same extent as though they
were dated the date of such letters authorizing reliance (except that the
statements in such last opinions shall be deemed to relate to the Offering
Circular as amended and supplemented to such date) or, in lieu of such reliance
letters, opinions of the same tenor as the opinions of such counsel referred to
in Sections 6(a) and 6(b) hereof but modified to relate to the Offering Circular
as amended and supplemented to such date;
(n) That each time (i) the Offering Circular shall be amended or
supplemented (other than by a Pricing Supplement), (ii) there is filed with the
Commission or any bank regulatory agency any document that is incorporated by
reference into the Offering Circular, (iii) the Bank sells Bank Notes to an
Agent as principal and the applicable Terms Agreement specifies the delivery of
a certificate under this Section 4(n) as a condition to the purchase of Bank
Notes pursuant to such Terms Agreement, or (iv) the Bank issues and sells
securities in a form not previously provided to the Agents by the Bank, the Bank
shall, if so requested by an Agent or specified in such Terms Agreement, furnish
or cause to be furnished forthwith to such Agent a certificate, dated the date
of such supplement, amendment, filing, Time of Delivery or settlement date
relating to such sale, as the case may be, in such form and executed by any two
of the Chief Executive Officer, President, Treasurer, Controller, any Senior or
Executive Vice President or any other officer of the Bank who is a member of the
Management Finance Committee of the Bank, or any other officer of the Bank
having the same or similar responsibilities, to the effect that the statements
contained in the certificates referred to in Section 6(g) hereof which were last
furnished by the Bank to such Agent are true and correct at such date as though
made at and as of such date (except that such statements shall be deemed to
relate to the Offering Circular as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(g) but modified to relate to the Offering Circular
as amended and supplemented to such date;
(o) To offer to any person who has agreed to purchase Bank Notes as
the result of an offer to purchase solicited by any Agent the right to refuse to
purchase and pay for such Bank Notes if, on the related settlement date fixed
pursuant to the Administrative Procedure, any condition set forth in Section
6(c), 6(d), 6(e) or 6(f) hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the impracticability
or inadvisability of such purchase of Bank Notes shall be substituted, for
purposes of this Section 4(o), for the respective judgments of the Agents with
respect to certain matters referred to in Section 6(c) and 6(e), and that the
Agents shall have no duty or obligation whatsoever to exercise the judgment
permitted under Sections 6(c) and 6(e) on behalf of any such person and it being
further understood that "the date hereof" as used in Sections 6(d) and 6(e)
shall be deemed, for purposes of this Section 4(o), to relate to the date of
such person's agreement to purchase Bank Notes from the Bank); and
(p) It will not offer Subordinated Bank Notes unless such Subordinated
Bank Notes are rated investment grade by at least one nationally-recognized
statistical rating agency and by each other nationally-recognized statistical
rating agency that has rated its Bank Notes.
5. Whether or not the transactions contemplated hereunder are consummated
or this Agreement or any agreement by an Agent to purchase Bank Notes as
principal is terminated, the Bank covenants and agrees with the Agents that the
Bank will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Bank's counsel in connection with the issuance of the Bank Notes
and in connection with the preparation, printing and filing of the Offering
Circular and any Pricing Supplements and all other amendments and supplements
thereto and the mailing and delivering of copies thereof to the Agents; (ii) the
reasonable fees, disbursements and expenses of counsel for the Agents incurred
in connection with the establishment of the program contemplated hereby and
incurred with the prior approval
10
of the Bank from time to time in connection with the transactions contemplated
hereunder and under any Terms Agreement; (iii) the cost of printing, producing
or reproducing the Offering Circular, this Agreement, any Terms Agreement, any
Issuing and Paying Agency Agreement, any Blue Sky and legal investment
memoranda, closing documents (including any compilation thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Bank Notes; (iv) all expenses in connection with the qualification of the Bank
Notes for offering and sale under state securities laws as provided in Section
4(c) hereof, including the reasonable fees and disbursements of counsel for the
Agents in connection with such qualification and in connection with the Blue Sky
and legal investment surveys; (v) any fees charged by securities rating services
for rating the Bank Notes; (vi) the cost of preparing the Bank Notes, including
fees and expenses related to the use of book-entry securities; (vii) the fees
and expenses of any Issuing and Paying Agent and any agent of any Issuing and
Paying Agent and any transfer or paying agent of the Bank and the fees and
disbursements of counsel for any Issuing and Paying Agent or such agent in
connection with the Issuing and Paying Agency Agreement and the Bank Notes;
(viii) the fees and disbursements of any calculation agent or exchange rate
agent; (ix) the cost of preparing and providing any CUSIP or other
identification numbers for the Bank Notes; (x) any advertising expenses
connected with the solicitation of offers to purchase and the sale of Bank Notes
so long as such advertising expenses have been approved in advance by the Bank;
(xi) all filing fees payable to the Comptroller, including any such fees
required by 12 C.F.R. Section 16.33; and (xii) all other costs and expenses
incurred by the Bank in connection with the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other
expenses it incurs.
6. The obligation of each Agent, as agent, at any time ("Solicitation
Time") to solicit offers to purchase the Bank Notes, and the obligation of any
Agent to purchase Bank Notes as principal, pursuant to any Terms Agreement or
otherwise, shall in each case be subject, in such Agent's discretion, to the
condition that all representations and warranties and other statements of the
Bank herein (and, in the case of an obligation of an Agent under a Terms
Agreement, in or incorporated by reference in such Terms Agreement) are true and
correct at and as of the Commencement Date and at and as of such Solicitation
Time or Time of Delivery, as the case may be, the condition that at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the Bank shall
have performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) ▇▇▇▇▇ & Wood LLP, counsel to the Agents, shall have furnished
to such Agents such opinion or opinions, dated the Commencement Date, with
respect to such matters as the Agents may reasonably request, including:
(i) This Agreement, any applicable Terms Agreement and the Letters
of Representations have been duly authorized, executed and delivered by
the Bank;
(ii) The Bank Notes have been duly authorized by all necessary
corporate action on the part of the Bank and, when duly executed,
authenticated, issued and delivered by the Bank against payment of the
consideration therefor, will constitute valid and legally binding
obligations of the Bank, enforceable against the Bank in accordance with
their respective terms and entitled to the benefits provided by the Issuing
and Paying Agency Agreement, subject, as to enforcement, to applicable
bankruptcy, liquidation, insolvency, reorganization, moratorium and similar
laws of general applicability relating to, or affecting, creditors' rights
and the rights of creditors of national banking associations and the FDIC
as conservator or receiver and to general equity principles (whether
enforcement is sought in a proceeding in equity or at law);
(iii) The Issuing and Paying Agency Agreement has been duly
authorized, executed and delivered by the Bank and, when executed and
delivered by the Issuing and Paying Agent, will constitute a valid and
legally binding agreement of the Bank, enforceable against the Bank in
accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, liquidation, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to, or affecting, creditors'
rights and the rights of creditors of national banking associations and the
FDIC as conservator or receiver and to general equity principles (whether
enforcement is sought in a proceeding in equity or at law);
11
(iv) The statements set forth in the Offering Circular under the
captions "Certain United States Federal Income Tax Considerations" and
"Plan of Distribution," insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate in all material
respects; and
(v) The Bank Notes are exempt from registration under the 1933 Act
pursuant to Section 3(a)(2) thereof and, in addition, the Short-Term Notes
are exempt from registration under the 1933 Act pursuant to Section 3(a)(3)
thereof. The registration and prospectus requirements of 12 C.F.R. Section
16.3 do not apply to offers and sales of the Short-Term Notes. The offer
and sale of the Medium-Term Notes would be deemed to be in compliance with
the registration and prospectus requirements of 12 C.F.R. Section 16.3
pursuant to 12 C.F.R. Section 16.6. Neither registration of the Bank Notes
under the 1933 Act nor qualification of an indenture under the Trust
Indenture Act of 1939, as amended, is required in connection with the
offer, issuance or sale of the Bank Notes.
(b) The General Counsel of the Bank, or other counsel for the Bank
satisfactory to the Agents, shall have furnished to the Agents written opinions,
dated the Commencement Date and at each time required by Section 4(m) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, in form and substance satisfactory to the Agents, to the effect that:
(i) The Bank has been duly organized and is validly existing as a
national banking association in good standing under the laws of the United
States; is qualified to conduct the business in which it is engaged in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, 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 Bank and its subsidiaries taken as a whole;
and has the corporate power and authority to own its properties and conduct
its business as described in the Offering Circular;
(ii) All of the issued shares of capital stock of the Bank are fully
paid and non-assessable and are owned directly or indirectly by PFC;
(iii) To such counsel's knowledge and other than as set forth in the
Offering Circular, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to such counsel's knowledge, overtly threatened against the Bank or any of
its subsidiaries, which, if determined adversely to the Bank or any of its
subsidiaries, would individually or in the aggregate reasonably be expected
to have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Bank and its
subsidiaries or which would adversely affect the consummation of this
Agreement, any Terms Agreement or the Issuing and Paying Agency Agreement
or any transaction contemplated hereby or thereby;
(iv) This Agreement, the Issuing and Paying Agency Agreement and the
Letters of Representations have been duly authorized, executed and
delivered by the Bank;
(v) The Bank Notes and any applicable Terms Agreements have been
duly authorized by all necessary corporate action on the part of the Bank;
(vi) The issue and sale of the Bank Notes, the compliance by the
Bank with all of the provisions of the Bank Notes, the Issuing and Paying
Agency Agreement, this Agreement and any Terms Agreement, and the
consummation of the transactions herein and therein contemplated will
not, to such counsel's knowledge, conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of PFC, the Bank or any of their
subsidiaries, pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
PFC, the Bank or any of their subsidiaries is a party or by which PFC,
the Bank or any of their subsidiaries is bound or to which any of their
properties or assets is subject, nor will such action result in any
violation of the provisions of the charter or the by-laws of the Bank, or
any statute, order, rule or regulation known to such counsel of any
12
court or governmental agency or body having jurisdiction over PFC, the
Bank, any of their subsidiaries or any of their properties;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required to be obtained or made by the Bank for the solicitation of offers
to purchase Bank Notes, the issue and sale of the Bank Notes or the
consummation by the Bank of the other transactions contemplated by this
Agreement, any Terms Agreement, or the Issuing and Paying Agency Agreement,
except (a) such as may be required by the securities or Blue Sky laws of
the various states in connection with the solicitation by any Agent of
offers to purchase Bank Notes and with purchases of Bank Notes by any Agent
as principal, as the case may be, in each case in the manner contemplated
hereby, (b) the Offering Circular and any amendments thereto (other than
amendments which contain only pricing information relating to a particular
transaction, Call Reports or Periodic Reports incorporated by reference,
updated financial information concerning the Bank or non-material
information relating to the program contemplated hereby), must be filed by
the Bank with the Comptroller pursuant to 12 C.F.R. Section 16.6, and (c)
with respect to Subordinated Bank Notes offered by the Bank notice must be
filed with the Comptroller pursuant to 12 C.F.R. Section 5.47 in order for
such Subordinated Bank Notes to be counted as Tier 2 capital of the Bank;
(viii) Neither the Bank nor any of its subsidiaries is in violation
of its charter or by-laws or is in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, other than any such default or defaults which,
individually or in the aggregate, would not reasonably be expected to have
a material adverse effect on the Bank and its subsidiaries taken as a
whole;
(ix) The statements set forth in the Offering Circular under the
caption "Description of Notes," insofar as they purport to constitute a
summary of the terms of the Bank Notes, are accurate in all material
respects;
(x) The Senior Bank Notes, when issued, will be unsecured and
unsubordinated debt obligations of the Bank and will rank pari passu among
themselves and with all other unsecured and unsubordinated debt obligations
of the Bank except, pursuant to Section 11(d)(11) of the Federal Deposit
Insurance Act, the Bank's unsecured deposit liabilities; and the
Subordinated Bank Notes, when issued, will be unsecured and subordinated
debt obligations of the Bank, rank pari passu among themselves and will be
subordinate and junior in right of payment to the Bank's obligations to its
depositors and general creditors, other than obligations which, by their
express terms rank on a parity with or junior to the Subordinated Bank
Notes;
(xi) Although such counsel need not pass upon and/or make any
independent verification of the accuracy or completeness of the statements
contained in the Offering Circular, nothing has come to such counsel's
attention that leads such counsel to believe that the Offering Circular
(other than the financial statements and other financial data included
therein and the information under the caption "Certain United States
Federal Income Tax Considerations" as to which such counsel need make no
comment), as of the date of such opinion, contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(xii) The Bank is not, and after giving effect to the offer and sale
of the Bank Notes, will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act.
(c) Since the respective dates as of which information is given
in the Offering Circular as amended or supplemented prior to the date of the
Pricing Supplement relating to the Bank Notes to be delivered at the relevant
Time of Delivery, there shall not have been any change in the capital stock or
long-term debt of the Bank or any of its subsidiaries or any change in or
affecting the condition, financial or otherwise, business affairs, or business
prospects of the Bank or its subsidiaries otherwise than as set forth or
contemplated in the Offering Circular as amended or supplemented prior to the
date of the Pricing
13
Supplement relating to the Bank Notes to be delivered at the relevant Time of
Delivery, the effect of which, in any such case described in this Section 6(c),
is in the reasonable judgment of the Agents so material and adverse as to make
it impracticable or inadvisable to proceed with the purchase by the Agents of
the Bank Notes as principal or the solicitation by the Agents of offers to
purchase the Bank Notes, as the case may be, on the terms and in the manner
contemplated in the Offering Circular as amended or supplemented prior to the
date of the Pricing Supplement relating to the Bank Notes to be delivered at the
relevant Time of Delivery;
(d) Since the date of any agreement to purchase Bank Notes (whether as
principal or agent and whether in writing or orally) that has not yet settled,
(i) no downgrading shall have occurred in the rating accorded the Bank's debt
securities by any nationally recognized statistical rating organization, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with negative implications, its rating of any of the
Bank's debt securities;
(e) Since the date of any agreement to purchase Bank Notes (whether as
principal or agent and whether in writing or orally) that has not yet settled,
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 securities of the
Bank or PFC on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; (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 this Clause (e) in the judgment of
the Agents makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Bank Notes or the purchase of the Bank Notes
from the Bank as principal pursuant to the applicable Terms Agreement or
otherwise, as the case may be, on the terms and in the manner contemplated in
the Offering Circular;
(f) With respect to any Bank Note denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any Bank Note
the principal or interest of which is indexed to such currency, currencies or
composite currency, there shall not have occurred a suspension or material
limitation in foreign exchange trading in such currency, currencies or composite
currency by a major international bank, a general moratorium on commercial
banking activities in the country or countries issuing such currency, currencies
or composite currency, the outbreak or escalation of hostilities involving, the
occurrence of any material adverse change in the existing financial, political
or economic conditions of, or the declaration of war or a national emergency by,
the country or countries issuing such currency, currencies or composite currency
or the imposition or proposal of exchange controls by any governmental authority
in the country or countries issuing such currency, currencies or composite
currency; and
(g) The Bank shall have furnished or caused to be furnished to the
Agents certificates of officers of the Bank at each time required by Section
4(n) hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, in such form and executed by any two of the Chief Executive
Officer, President, Treasurer, Controller, any Senior or Executive Vice
President or any other officer of the Bank who is a member of the Management
Finance Committee of the Bank, or any other officer of the Bank having the same
or similar responsibilities, as to the accuracy of the representations and
warranties of the Bank herein at and as of the Commencement Date or such
applicable date, as the case may be, as to the performance by the Bank of all of
its obligations hereunder to be performed at or prior to the Commencement Date
or such applicable date, as the case may be, and as to the matters set forth in
subsection (c) of this Section 6.
7. (a) The Bank will indemnify and hold harmless each Agent against any
losses, claims, damages or liabilities, joint or several, to which such Agent
may become subject, under the 1933 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 the Offering Circular as amended or supplemented and any
report which has been approved by the Bank in writing and is furnished to
security holders and not otherwise deemed to be included in the Offering
Circular, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, and will
reimburse such Agent for any legal or other expenses reasonably incurred by it
in
14
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Bank 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 the Offering Circular as amended or
supplemented, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Bank by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Bank against any
losses, claims, damages or liabilities to which the Bank may become subject,
under the 1933 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 the
Offering Circular as amended or supplemented, or arise out of or are based upon
the omission or alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, 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 the Offering Circular as amended or supplemented in
reliance upon and in conformity with written information furnished to the Bank
by such Agent expressly for use therein, and will reimburse the Bank for any
legal or other expenses reasonably incurred by the Bank 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 which it may have to
any 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. 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 7 is
unavailable 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 Bank on the one hand and the applicable Agent
on the other from the offering of the Bank Notes 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 Bank on the one hand and the applicable Agent 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
Bank on the one hand and such Agent on the other shall be deemed to be in the
same proportion as the total net proceeds from the sale of Bank Notes (before
deducting expenses) received by the Bank bear to the total commissions or
15
discounts received by an Agent in respect thereof. 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 necessary in order to make the statements therein not misleading
relates to information supplied by the Bank on the one hand or such Agent on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Bank and each
Agent agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by per capita 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), an Agent shall
not be required to contribute any amount in excess of the amount by which the
total offering price at which the Bank Notes purchased by or through it were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
(e) The obligations of the Bank under this Section 7 shall be in
addition to any liability which the Bank may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls an
Agent within the meaning of the 1933 Act; and the obligations of each Agent
under this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Bank and to each person, if any, who controls the
Bank within the meaning of the 1933 Act.
8. Each Agent, in soliciting offers to purchase Bank Notes from the Bank
and in performing its other obligations hereunder (other than in respect of any
purchase by such Agent as principal, pursuant to a Terms Agreement or
otherwise), is acting solely as agent for the Bank and not as principal. Each
Agent will make reasonable efforts to assist the Bank in obtaining performance
by each purchaser whose offer to purchase Bank Notes from the Bank was solicited
by such Agent and has been accepted by the Bank, but such Agent shall not have
any liability to the Bank in the event such purchase is not consummated for any
reason, unless such purchase is not consummated as a result of the gross
negligence or willful misconduct of such Agent. If the Bank shall default on
its obligation to deliver Bank Notes to a purchaser whose offer it has accepted
and such default did not result from a failure by an Agent to perform its
obligations hereunder, the Bank shall (i) hold such Agent harmless against any
loss, claim or damage arising from or as a result of such default by the Bank
and (ii) notwithstanding such default, pay to such Agent any commission to which
it would be entitled in connection with such sale.
9. Delivery of Bank Notes sold through an Agent as agent for the Bank
shall be made by the Bank to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for the
Bank Notes sold through such Agent as agent on the date fixed for settlement,
such Agent shall promptly notify the Bank and deliver the Bank Notes to the
Bank, and, if such Agent has theretofore paid the Bank for such Bank Notes, the
Bank will promptly return such funds to such Agent. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder, the Bank will reimburse such Agent on an equitable
basis for its loss of the use of funds during the period when the funds were
credited to the account of the Bank.
10. The respective indemnities, agreements, representations, warranties
and other statements by the Agents and the Bank set forth in or made 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 Agents or any controlling person of the Agents, or the Bank, or any
officer or director or any controlling person of the Bank, and shall survive
each delivery of and payment for any of the Bank Notes.
11. The provisions of this Agreement relating to the solicitation of
offers to purchase Bank Notes from the Bank may be suspended or terminated at
any time by the Bank or by the Agents upon the giving of written notice of such
suspension or termination to the Agents or the Bank, as the case may be. In the
event of such suspension or termination this Agreement shall remain in full
force and effect with respect to the rights and obligations of any party which
have previously accrued or which relate to Bank
16
Notes which are already issued, agreed to be issued or the subject of a pending
offer at the time of such suspension or termination and in any event, this
Agreement shall remain in full force and effect insofar as the following
provisions are concerned: (i) to the extent any Agent shall be entitled to any
commissions earned hereunder but not yet paid at the time of termination, the
last paragraph of Section 2(b) hereof, (ii) if at the time of termination any
Agent shall own any Bank Notes as principal or an offer to purchase Bank Notes
has been accepted but the Bank Notes have not yet been delivered, Sections 4(b),
4(d) and 4(e) hereof shall remain in effect until such Bank Notes are resold or
delivered, as the case may be, and (iii) Sections 5, 7, 8 and 10 hereof shall
remain in effect.
12. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail, if to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., to ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile Transmission No. (212)
357-8680, Attention: Credit Department, Credit Control--Medium-Term Notes, if to
Credit Suisse First Boston Corporation, to Credit Suisse First Boston
Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Short
and Medium-Term Finance Department, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇,
if to ▇▇▇▇▇▇ Brothers Inc., to ▇▇▇▇▇▇ Brothers Inc., 3 World Financial Center,
New York, New York 10285, Attention: Medium-Term Note Department, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, if to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World
Financial Center, North Tower, 10th Floor, New York, New York 10281-1310,
Attention: Product Management - Bank Notes, Facsimile Transmission No. (212)
449-2234, if to the Bank, to Providian National Bank, c/o Providian Financial
Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile
Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Treasurer.
13. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, the Agents and the Bank, and to the extent
provided in Sections 7, 8 and 10 hereof, the officers and directors of the Bank
and any person who controls the Agents or the Bank, and their respective
personal representatives, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any Terms
Agreement. No purchaser of any of the Bank Notes through or from any Agent
hereunder shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence in this Agreement and any Terms
Agreement.
15. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
17
If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this letter and the acceptance by
you thereof shall constitute a binding agreement between the Bank and you in
accordance with its terms.
Very truly yours,
PROVIDIAN NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
Accepted in New York, New York,
as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
/s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
----------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
CREDIT SUISSE FIRST BOSTON CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director
18
ANNEX I
PROVIDIAN NATIONAL BANK
[TITLE OF BANK NOTE]
Terms Agreement
---------------
_______________, 19__
[▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[▇▇▇▇▇▇ Brothers
▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
North Tower
New York, New York 10048]
Ladies and Gentlemen:
Providian National Bank (the "Bank") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated February 20,
1998 (the "Distribution Agreement"), between the Bank and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Credit Suisse First Boston Corporation, ▇▇▇▇▇▇ Brothers, ▇▇▇▇▇▇ Brothers Inc.
(including its affiliate, ▇▇▇▇▇▇ Commercial Paper Inc.) and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
(the "Agents") to issue and sell to you the securities specified in the Schedule
hereto (the "Purchased Bank Notes"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by you, as agent of the
Bank, of offers to purchase Bank Notes is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Capitalized
terms used herein but not so defined shall have the meanings ascribed thereto in
the Distribution Agreement. Nothing contained herein or in the Distribution
Agreement shall make any party hereto an agent of the Bank or make such party
subject to the provisions therein relating to the solicitation of offers to
purchase Bank Notes from the Bank, solely by virtue of its execution of this
Terms Agreement. Each of the representations and warranties set forth therein
shall be deemed to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 1 of the Distribution
Agreement which makes reference to the Offering Circular shall be deemed to be a
representation and warranty as of the date of this Terms Agreement in relation
to the Offering Circular as amended and supplemented to relate to the Purchased
Bank Notes and except to the extent such representations and warranties
expressly relate to an earlier date.
1
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Bank agrees to
issue and sell to you and you agree to purchase from the Bank the Purchased Bank
Notes, at the time and place, in the principal amount and at the purchase price
set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Bank.
PROVIDIAN NATIONAL BANK
By: _____________________________
Name:
Title:
Accepted:
By: ______________________________
[▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.]
[Credit Suisse First Boston Corporation]
[▇▇▇▇▇▇ Brothers Inc.]
[▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.]
2
SCHEDULE TO ANNEX I
Purchasing Agent:
Title of Purchased Securities:
___% [Senior] [Subordinated] Bank Notes
Aggregate Principal:
[$______________ or units of other Specified Currency]
Price to Public:
Purchase Price by the Agent:
___% of the principal amount of the Purchased Securities[, plus accrued
interest from _______________ to _______________] [and accrued amortization, if
any, from _______________ to _______________]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of the
Bank, in immediately available funds]
[By wire transfer to a bank account specified by the Bank in immediately
available funds]
Issuing and Paying Agency Agreement:
Issuing and Paying Agency Agreement, dated as of ____________, 1998,
between the Bank and The First National Bank of Chicago, as Issuing and Paying
Agent
Time of Delivery:
Closing Location for Delivery of Bank Notes:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
Commission Percentage:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
3
[(1) The opinion of counsel to the Bank referred to in Section 4(m).]
[(2) The officers' certificate referred to in Section 4(n).]
Other Provisions (including Syndicate Provisions, if applicable):
4
ANNEX II
PROVIDIAN NATIONAL BANK
$4,000,000,000
SENIOR BANK NOTES
AND
SUBORDINATED BANK NOTES
DUE FROM 7 DAYS TO 15 YEARS FROM DATE OF ISSUE
Administrative Procedures
-------------------------
These Administrative Procedures relate to the Notes defined in the
Distribution Agreement, dated February 20, 1998 (the "Distribution Agreement"),
between Providian National Bank (the "Bank") and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
("Goldman"), Credit Suisse First Boston Corporation ("First Boston"), ▇▇▇▇▇▇
Brothers, ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ ("▇▇▇▇▇▇▇" and, collectively with Goldman, First
Boston and ▇▇▇▇▇▇, the "Agents"), to which these Administrative Procedures are
attached as ▇▇▇▇▇ ▇▇. Defined terms used herein and not defined herein shall
have the meanings given such terms in the Distribution Agreement, the Offering
Circular as amended or supplemented or the Issuing and Paying Agency Agreement.
The procedures to be followed with respect to the settlement of sales of
Bank Notes directly by the Bank to purchasers solicited by an Agent, as agent,
are set forth below. The terms and settlement details related to a purchase of
Bank Notes by an Agent, as principal, from the Bank will be set forth in a Terms
Agreement pursuant to the Distribution Agreement, unless the Bank and such Agent
otherwise agree as provided in Section 2(a) of the Distribution Agreement, in
which case the procedures to be followed in respect of the settlement of such
sale will be as set forth below. An Agent, in relation to a purchase of a Bank
Note by a purchaser solicited by such Agent, is referred to herein as the
"Selling Agent" and, in relation to a purchase of a Bank Note by such Agent as
principal other than pursuant to a Terms Agreement, as the "Purchasing Agent".
The Bank will advise each Agent in writing of those representatives of the
Bank with whom such Agent is to communicate regarding offers to purchase Bank
Notes and the related settlement details.
Each Bank Note will be issued only in fully registered form and will be
represented by a global security (a "Global Note") delivered to the Issuing and
Paying Agent, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Note"). An owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Book-Entry Note, except as provided in the Issuing
and Paying Agency Agreement.
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by the Depositary, the Issuing
and Paying Agent will perform the custodial, document control and administrative
functions described below, in accordance with its respective obligations under
the Short-Term and Medium-Term Letters of Representation from the Bank and the
Issuing and Paying Agent to the Depositary, dated February 20, 1998, and a
Medium-Term
Note Certificate Agreement between the Issuing and Paying Agent and the
Depositary, dated as of May 17, 1994 (the "Certificate Agreement"), as amended,
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Bank:
The Bank and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Notes that may
be sold as a result of the solicitation of offers by an Agent. The Bank may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Bank decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Bank:
Each Agent will promptly advise the Bank by telephone or other appropriate
means of all reasonable offers to purchase Book-Entry Notes. Each Agent also
may make offers to the Bank to purchase Book-Entry Notes as a Purchasing Agent.
Each Agent shall have the right, in its reasonably exercised discretion, to
reject any proposed purchase of Bank Notes, as a whole or in part. The Bank
will have the sole right to accept offers to purchase Book-Entry Notes and may
reject any such offer in whole or in part.
The Bank will promptly notify the Selling Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Notes. If the Bank accepts an offer to purchase Book-Entry Notes, it will
confirm such acceptance by telephone or in writing to the Selling Agent or
Purchasing Agent, as the case may be, and the Issuing and Paying Agent.
Communication of Sale Information to the Bank by the Agents and Settlement
Procedures:
A. After the acceptance of an offer by the Bank, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Bank by telephone (confirmed in writing) or by facsimile transmission or other
acceptable written means:
(1) Principal Amount of Book-Entry Notes to be purchased;
(2) If a Fixed Rate Book-Entry Note, the interest rate and initial
interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it
being understood that currently the Depositary accepts deposits of
Global Notes denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
2
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Issuing Bank;
(11) If a redeemable Book-Entry Note, such of the following as are
applicable:
(i) Initial Redemption Date,
(ii) Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Initial Redemption
Date;
(12) If a Book-Entry Note subject to repayment at the option of the holder,
the Optional Repayment Date(s);
(13) If a Floating Rate Book-Entry Note, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii)Interest Payment Dates,
(ix) Regular Record Dates, and
(x) Calculation Agent;
(14) Name, address and taxpayer identification number of the purchaser(s);
(15) Denomination of certificates to be delivered at settlement; and
(16) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Bank will communicate such Sale
Information to the Issuing and Paying Agent by facsimile transmission or other
acceptable written or electronic means. The Issuing and Paying Agent will
assign a CUSIP number to the Global Note from a list of CUSIP numbers previously
delivered to the Issuing and Paying Agent by the Bank representing such Book-
Entry Note and then advise the Bank and the Selling Agent or Purchasing Agent,
as the case may be, of such CUSIP number.
C. The Issuing and Paying Agent will enter a pending deposit message
through the Depositary's Participant Terminal System, providing the following
settlement information to the Depositary, and the Depositary shall forward such
information to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Note representing such Book-Entry Note;
(3) Whether such Global Note will represent any other Book-Entry Note (to
the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Note, number of days
by which such date succeeds the record date for the Depositary's
purposes and, if
3
calculable at that time, the amount of interest payable on such
Interest Payment Date.
D. The Issuing and Paying Agent will complete and authenticate the Global
Note previously delivered by the Bank representing such Book-Entry Note.
E. The Depositary will credit such Book-Entry Note to the Issuing and
Paying Agent's participant account at the Depositary.
F. The Issuing and Paying Agent will enter an SDFS deliver order through
the Depositary's Participant Terminal System instructing the Depositary to (i)
debit such Book-Entry Note to the Issuing and Paying Agent's participant account
and credit such Book-Entry Note to the Selling Agent's or Purchasing Agent's
participant account and (ii) debit the Selling Agent's or Purchasing Agent's
settlement account and credit the Issuing and Paying Agent's settlement account
for an amount equal to the price of such Book-Entry Note less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Issuing and Paying Agent to the Depositary that (a) the
Global Note representing such Book-Entry Note has been issued and authenticated
and (b) the Issuing and Paying Agent is holding such Global Note pursuant to the
Certificate Agreement.
G. The Selling Agent or Purchasing Agent will enter an SDFS deliver order
through the Depositary's Participant Terminal System instructing the Depositary
(i) to debit the Selling Agent's or Purchasing Agent's Book-Entry Note to such
Agent's participant account and credit such Book-Entry Note to the participant
accounts of institutions that have accounts with the Depositary or its nominee
(each a "participant" and collectively, the "participants") with respect to such
Book-Entry Note and (ii) to debit the settlement accounts of such participants
and credit the settlement account of the Selling Agent or Purchasing Agent for
an amount equal to the price of such Book-Entry Note.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Issuing and Paying Agent
will transfer to the account of the Bank maintained at The First National Bank
of Chicago, or such other account as the Bank may have previously specified to
the Issuing and Paying Agent, funds available for immediate use in the amount
transferred to the Issuing and Paying Agent in accordance with Settlement
Procedure "F".
J. Upon request, the Issuing and Paying Agent will send to the Bank a
statement setting forth the principal amount of Book-Entry Notes outstanding as
of that date under the Issuing and Paying Agency Agreement.
K. The Selling Agent or Purchasing Agent will confirm the purchase of
such Book-Entry Note to the purchaser either by transmitting to the participants
with respect to such Book-Entry Note a confirmation order or orders through the
Depositary's institutional delivery system or by mailing a written confirmation
to such purchaser.
4
L. The Depositary will, at any time, upon request of the Bank or the
Issuing and Paying Agent, promptly furnish to the Bank or the Issuing and Paying
Agent a list of the names and addresses of the participants for whom the
Depositary has credited Book-Entry Notes.
Preparation of Pricing Supplement:
If the Bank accepts an offer to purchase a Book-Entry Note, it will prepare
or cause to be prepared a Pricing Supplement reflecting the terms of such Book-
Entry Note and arrange to have delivered to the Selling Agent or Purchasing
Agent, as the case may be, such Pricing Supplement, not later than 5:00 p.m.,
New York City time, on the Business Day following the Trade Date (as defined
below), or if the Bank and the purchaser agree to settlement on the date of
acceptance of such offer, or the next Business Day, not later than 12:00 noon,
New York City time, on such agreed upon settlement date. With respect to Short-
Term Notes, if agreed between the Bank and the Agent, no Pricing Supplement will
be prepared.
Delivery of Confirmation and Offering Circular to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Note a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Offering Circular as amended or supplemented (including the Pricing Supplement)
in relation to such Book-Entry Note prior to or together with the earlier of the
delivery to such purchaser or its agent of (a) the confirmation of sale or (b)
the Book-Entry Note.
Date of Settlement:
The receipt by the Bank of immediately available funds in payment for a
Book-Entry Note and the authentication and issuance of the Global Note
representing such Book-Entry Note shall constitute "settlement" with respect to
such Book-Entry Note. All orders of Book-Entry Notes solicited by a Selling
Agent or made by a Purchasing Agent and accepted by the Bank on a particular
date (the "Trade Date") will be settled on a date (the "Settlement Date") which
is the third Business Day after the Trade Date pursuant to the "Settlement
Procedure Timetable" set forth below, unless the Bank and the purchaser agree to
settlement on another Business Day which may be as early as the Trade Date.
Settlement Procedure Timetable:
For offers of Book-Entry Notes solicited by a Selling Agent and accepted by
the Bank for settlement on or before the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 5:00 p.m. on the Trade Date or 11:00 a.m. on the Business Day
immediately preceding the Settlement Date,
whichever is earlier
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SETTLEMENT
PROCEDURE TIME
---------- ----
B 12:00 noon on the Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If a sale is to be settled on the same Business Day as the Trade Date,
Settlement Procedure "A" shall be completed no later than 11:00 a.m. on the
Settlement Date; Settlement Procedure "B" shall be completed no later than 11:30
a.m. on the Settlement Date; Settlement Procedure "C" shall be completed no
later than 12:00 noon on the Settlement Date; Settlement Procedure "D" shall be
completed no later than 12:30 p.m. on the Settlement Date; Settlement Procedure
"E" shall be completed no later than 1:00 p.m. on the Settlement Date.
If settlement of a Book-Entry Note is rescheduled or canceled, the Issuing
and Paying Agent, upon obtaining knowledge thereof, will deliver to the
Depositary, through the Depositary's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m. on the Business Day
immediately preceding the scheduled Settlement Date or, if a sale is to be
settled on the same Business Day as the Trade Date, as promptly as possible
after obtaining knowledge thereof.
Failure to Settle:
If the Issuing and Paying Agent fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure "F", the Issuing
and Paying Agent may deliver to the Depositary, through the Depositary's
Participant Terminal System, as soon as practicable a withdrawal message
instructing the Depositary to debit such Book-Entry Note to the Issuing and
Paying Agent's participant account, provided that the Issuing and Paying Agent's
participant account contains a principal amount of the Global Note representing
such Book-Entry Note that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect to all the Book-
Entry Notes represented by a Global Note, the Issuing and Paying Agent will mark
such Global Note "canceled", make appropriate entries in the Issuing and Paying
Agent's records and send such canceled Global Note to the Bank. The CUSIP
number assigned to such Global Note shall, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately reassigned. If a withdrawal
message is processed with respect to one or more, but not all, of the Book-Entry
Notes represented by a Global Note, the Issuing and Paying Agent will exchange
such Global Note for two Global Notes, one of which shall represent such Book-
Entry Note or Notes and shall be canceled immediately after issuance
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and the other of which shall represent the remaining Book-Entry Notes previously
represented by the surrendered Global Note and shall bear the CUSIP number of
the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to the
participants with respect to such Book-Entry Note by the beneficial purchaser
thereof (or a person, including an indirect participant in the Depositary,
acting on behalf of such purchaser), such participants and, in turn, the Agent
for such Book-Entry Note may enter deliver orders through the Depositary's
Participant Terminal System debiting such Book-Entry Note to such participant's
account and crediting such Book-Entry Note to such Agent's account and then
debiting such Book-Entry Note to such Agent's participant account and crediting
such Book-Entry Note to the Issuing and Paying Agent's participant account and
shall promptly notify the Bank and the Issuing and Paying Agent thereof.
Thereafter, the Issuing and Paying Agent will (i) immediately notify the Bank of
such order and the Bank shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Note which was
credited to the account of the Bank maintained in accordance with Settlement
Procedure I, and (ii) deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Bank will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Bank.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Note, the Depositary may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Issuing and Paying Agent will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Note representing the other Book-Entry Notes to have been represented
by such Global Note and will make appropriate entries in its records. The Bank
will, from time to time, furnish the Issuing and Paying Agent with a sufficient
quantity of Global Notes.
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