Document:

Exhibit 4.2

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), TO
PROVIDIAN FINANCIAL CORPORATION, AS ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.

 

PROVIDIAN FINANCIAL CORPORATION

 

 

4% CONVERTIBLE SENIOR NOTES DUE MAY 15, 2008

 

	
  No. R-1

  	
   

  	
  CUSIP: 
  74406AAC6

  
	
   

  	
   

  	
  $287,500,000

  

 

Providian Financial Corporation, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the “Company”,
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of Two Hundred Eighty-Seven Million Five
Hundred Thousand Dollars on May 15, 2008, and to pay interest thereon from May
27, 2003 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on May 15 and November 15 in each
year, commencing November 15, 2003, at the rate per annum set forth above,
until the principal hereof is paid or made available for payment, and to pay
contingent interest, if any, upon the conditions described herein and in the
Indenture. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the May 1 or November 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or

 

 

be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture, dated as of May 1, 1999, between
the Company and Bank One Trust Company, N.A., (as successor in interest to The
First National Bank of Chicago, in such capacity, together with its successors
in trust, the “Trustee”), as supplemented by that certain Third Supplemental
Indenture, dated as of May 27, 2003, between the Company and the Trustee (the
Indenture as so supplemented is herein called the “Indenture”).

 

Payment of the principal of, and interest on, including contingent
interest, if any, on this Security, including upon any repurchase thereof at
the election of the Holder thereof upon a Fundamental Change, by wire transfer
to an account maintained by the payee or its nominee located inside the United
States. Payments with respect to the Securities of this series that are not a
Global Securities will be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.

 

All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.

 

Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

 

2

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

Dated:  May 27, 2003

 

	
   

  	
  PROVIDIAN FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony Vuoto

  	
   

  
	
   

  	
  Name:

  	
  Anthony Vuoto

  
	
   

  	
  Title:

  	
  Vice Chairman & Chief Financial Officer

  
					

 

3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

	
   

  	
  BANK ONE TRUST COMPANY, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janice Ott Rotunno

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

4

 

REVERSE SIDE OF SECURITY

4% Convertible Senior Notes due May 15, 2008

 

1.                                       Indenture;
Series Limited in Amount; Ranking

 

This Security is one of a duly authorized
issue of securities of the Company designated on the face hereof (herein collectively
referred to as the “Notes”) issued under the Indenture, and reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered.  The terms
of this Security include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as in effect
from time to time (the “TIA”). Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture. This Security is
subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of those terms.

 

The Notes are limited in aggregate principal amount to U.S.
$287,500,000, subject to Section 306 of the Indenture.

 

The Notes are general unsubordinated
unsecured obligations of the Company. The Indenture does not limit other
indebtedness of the Company, secured or unsecured.

 

2.                                       Paying Agent,
Conversion Agent and Registrar.

 

Initially, the Trustee will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent, Registrar or co-registrar without notice, other
than notice to the Trustee, except that the Company will maintain at least one
Paying Agent in the State of New York, City of New York, Borough of Manhattan,
which shall initially be an office or agency of the Trustee. The Company or any
of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.

 

3.                                       Denominations;
Transfer; Exchange.

 

The Notes are in fully registered form,
without coupons, in denominations of $1,000 principal amount and integral
multiples of $1,000. A Holder may transfer or exchange Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture.

 

5

 

4.                                       Contingent
Interest.

 

If the average Trading Price for the Notes for the five Trading Days
ending on the fifth Trading Day next preceding May 1, 2008 is greater than
$1,445, then the Company will pay contingent interest in an amount per $1,000
principal amount of this Security determined as follows:  If the Average Note Value is less than
$1,690 (the “Contingent Interest Threshold”), then the amount of such
contingent interest shall equal 2.5% (the “Contingent Interest Rate”) times the
Average Note Value.  If the Average Note
Value is equal to or greater than the Contingent Interest Threshold, then the
amount of such contingent interest shall equal the sum of (i) the Contingent
Interest Rate times the Contingent Interest Threshold, plus (ii) 0.25% times
the difference (expressed as a positive number) between the Average Note Value
and the Contingent Interest Threshold.

 

“Average
Note Value” shall mean the arithmetic average of the average Trading
Prices (as defined below) for the five Trading Days immediately preceding, but
not including, May 15, 2004, 2005, 2006 and 2007.

 

“Trading
Price” for purposes of the determination of contingent interest
payable hereon means, on any date, the average of the secondary market bid
quotations for the Notes obtained by the Trustee for $10,000,000 principal
amount of Notes at approximately 3:30 p.m., New York City time, on such date
from three independent nationally recognized securities dealers selected by the
Company;
provided that if at least three such bids cannot reasonably be
obtained by the Trustee, but two bids are obtained, then the average of the two
bids shall be used, and if only one such bid can reasonably be obtained by the
Trustee, one bid shall be used; and provided further that if the Trustee
cannot reasonably obtain at least one bid for $10,000,000 principal amount of
Notes from a nationally recognized securities dealer, then the trading price
shall equal the trading price as of the next preceding trading day for which
the Trustee could reasonably obtain at least one such bid.

 

Contingent interest shall be paid to the Person in whose name this
Security (or its Predecessor Security) is registered on the Security Register
at the close of business on May 1, 2008. Except as otherwise expressly provided
in the Indenture, contingent interest due on this Security shall be treated for
all purposes of the Indenture like any other interest accruing on this
Security.

 

5.                                       Contingent
Conversion.

 

Before the close of business on May 15, 2008, the Holder of this
Security shall have the right, at such Holder’s option, to convert the
principal amount of this Security, or any portion of such principal amount
which is a multiple of $1,000, into fully paid and non-assessable shares of
Common Stock of the Company (as such shares shall then be constituted) at the
Conversion Rate (as defined below) in effect at such time, by surrender of this
Security in whole or in

 

6

 

part, together with any required funds, under the circumstances
described in and in the manner provided in the Indenture. This Security shall
be convertible only upon the occurrence of one of the following events:

 

(i)    during any calendar quarter commencing after
June 30, 2003, if the Closing Price of the Common Stock exceeds 110% of the
Conversion Price (as defined below) in effect for at least 20 Trading Days in
the 30 consecutive Trading Day period ending on the last Trading Day of the
immediately preceding calendar quarter (it being understood for purposes of
this clause (i) that the Conversion Price in effect at the close of business on
each of the 30 consecutive Trading Days shall be used);

 

(ii)   on and after February 15, 2008, if the
Closing Price of the Common Stock exceeds 110% of the Conversion Price in
effect on any Trading Day on or after February 15, 2008;

 

(iii)  during the five Business Day period after any
five consecutive Trading Day period in which the Trading Price per $1,000
principal amount of the Notes for each day of such five Trading Day period was
less than 98% of the product of the Closing Price of the Common Stock and the
number of shares of Common Stock issuable upon conversion of $1,000 principal
amount of the Notes; provided that if on the date of any conversion pursuant to
this clause (iii) the Closing Price of the Common Stock is greater than the
Conversion Price, a Holder shall receive, in lieu of Common Stock based on the
Conversion Price, cash or Common Stock or a combination of cash and Common
Stock, at the Company’s option, with a value equal to the principal amount of
the Holder’s Notes plus accrued and unpaid interest, including contingent
interest, if any, as of the conversion date (a “Principal Value Conversion”);

 

(iv)  during any period in which the Notes are rated
at or below either CCC+ by Standard & Poor’s Ratings Group or its successor
entity, or Caa1 by Moody’s Investors Service or its successor entity; provided that
the Company shall be under no obligation to have the Notes rated; or

 

(v)   as provided below.

 

If (x) the Company distributes to all holders of its Common Stock
rights or warrants entitling them (for a period expiring within 45 days of the
record date for the determination of the stockholders entitled to receive such
distribution) to subscribe for or purchase shares of Common Stock, at a price
per share less than the average of the Closing Price of the Common Stock for
the ten Trading Days immediately preceding, but not including, the date such
distribution is first publicly announced by the Company, or (y) the Company
distributes to all holders of its Common Stock, cash or other assets, debt
securities or rights to purchase its securities, where the Fair Market Value of
such distribution per share of Common

 

7

 

Stock exceeds 5% of the Closing Price of the Common Stock on the
Trading Day immediately preceding the date such distribution is first publicly
announced by the Company, then, in either case, this Security may be
surrendered for conversion at any time on and after the date that the Company
gives notice to the Holders of such distribution, which shall be not less than
20 days prior to the commencement of ex-dividend trading for such distribution,
until the earlier of the close of business on the Business Day immediately
preceding, but not including, the commencement of ex-dividend trading or the
date the Company publicly announces that such distribution will not take place; provided
that no adjustment to the Conversion Rate or the ability of a Holder of a Note
to convert will be made if the Holder will otherwise participate in such
distribution without conversion.

 

If the Company consolidates with or merges with or into another Person
or is a party to a binding share exchange or conveys, transfers, sells, leases
or otherwise disposes of all or substantially all of its properties and assets,
then this Security may be surrendered for conversion at any time from and after
the date 15 days prior to the anticipated effective date of the transaction and
ending on and including the date 15 days after the consummation of the
transaction. If a Holder is electing to exercise its option to require
repurchase of this Security upon a Fundamental Change (as defined below), this
Security may be converted only if such Holder withdraws its election in
accordance with the terms of the Indenture.

 

To convert this Security, a Holder must (1)
complete and manually sign the conversion notice below (or complete and
manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent, (2) surrender this Security to the Conversion Agent, (3)
furnish appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if
required.

 

The initial “Conversion Rate” is 76.8758
shares of Common Stock per $1,000 principal amount hereof, subject to
adjustment in certain events described in the Indenture, and the “Conversion
Price” as of any day means the amount equal to $1,000 divided by the
number of shares of Common Stock issuable upon conversion of $1,000 principal
amount of Notes. The Company will deliver cash or a check in lieu of any fractional
share of Common Stock. A Holder of this Security is not entitled to any rights
of a holder of Common Stock until such Holder has converted this Security to
Common Stock, and only to the extent this Security is deemed to have been
converted to Common Stock under the Indenture.

 

In the case of a Principal Value Conversion, a Holder will receive
either cash, Common Stock or a combination of cash and Common Stock, at the
Company’s option, with a value equal to the principal amount of the Note
converted plus accrued and unpaid interest, including contingent interest, if
any, as of the conversion date.  If a
Holder surrenders this Security for conversion and it is a Principal Value
Conversion, the Company will notify the Holder hereof by

 

8

 

the second Trading Day following the conversion date whether it will
pay all or a portion of the principal amount plus accrued and unpaid interest,
including contingent interest, if any, in cash, Common Stock or a combination
of cash and Common Stock, and in what percentage.  Any Common Stock delivered upon a Principal Value Conversion will
be valued at the greater of (x) the Conversion on the conversion date and (y)
the Closing Price on the third Trading Day after the conversion date.  The Company will pay any portion of the
principal amount plus accrued and unpaid interest to be paid in cash on the
third Trading Day after the conversion date. 
If the Company elects to deliver Common Stock to pay any portion of such
principal amount plus accrued and unpaid interest, it will deliver such Common
Stock on the fourth Trading Day following the conversion date.

 

This Security or any portion thereof surrendered for conversion during
the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day preceding the
following interest payment date, of it has not been called for repurchase
during such period shall be accompanied by payment, in immediately available
funds or other funds acceptable to the Company, of an amount equal to the
interest otherwise payable on such interest payment date on the principal
amount being converted; provided that no such payment need be
made (i) if a Fundamental Change Repurchase Date (as defined below) will occur
during such period, (ii) to the extent of contingent interest, if any, payable
on principal amount of this Security converted after the record date with
respect to such contingent interest, or (iii) to the extent of any interest with
respect to which there is an ongoing default in payment on the Notes, if any,
at the time of conversion.  Except as
provided above, no payment or other adjustment shall be made for interest
accrued on this Security converted or for dividends on any shares issued upon
the conversion of such Security as provided herein and in the Indenture.

 

Pursuant to the terms and conditions described in the Indenture, the
Conversion Rate will be adjusted for dividends or distributions on Common Stock
payable in Common Stock or other capital stock of the Company; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of rights or warrants to purchase shares of Common
Stock at a price less than the Current Market Price on the date fixed for
determination of stockholders entitled to receive such rights or warrants;
distributions to such holders of assets or debt securities of the Company or
certain rights to purchase securities of the Company (excluding certain cash
dividends or distributions); dividends or distributions on Common Stock of cash
(excluding (x) any quarterly cash dividend on the Common Stock to the extent
the aggregate cash dividend per share of Common Stock in any fiscal quarter
does not exceed the greater of (A) the amount per share of Common Stock of the
next preceding quarterly cash dividend on the Common Stock to the extent that
such preceding quarterly dividend did not require any adjustment of the
Conversion Rate pursuant to this clause (as adjusted to reflect subdivisions,
or combinations of the Common Stock), and (B) 1.25% of the arithmetic average
of the Closing Price of the

 

9

 

Common Stock during the ten Trading Days immediately prior to the date
of declaration of such dividend, and (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary); and tender or exchange offers made by the
Company or any Subsidiary for all or any portion of the Common Stock. However,
no adjustment need be made if Holders may participate in the transaction or in
certain other cases. The Company from time to time may voluntarily increase the
Conversion Rate.

 

If the Company is a party to a consolidation,
merger or binding share exchange as described in the Indenture, the right to
convert this Security into Common Stock may be changed into a right to convert
it into securities, cash or other assets of the Company or another person.

 

6.                                       Repurchase at
Option of Holder Upon A Fundamental Change.

 

This Security is subject to repurchase at the option of the Holder
thereof in the event of a Fundamental Change at any time prior to maturity at a
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, including contingent interest, if any, to but excluding the date of
repurchase (except that if such repurchase date is an interest payment date,
the interest payable on that interest payment date shall be paid to the holders
of record of this Security instead of the holder surrending this Security for
repurchase on the repurchase date), which shall be the date (the “Fundamental
Change Repurchase Date”) that is 30 days after the date of the
Company’s notice of such Fundamental Change (or, if such 30th day is not a
Business Day, the next succeeding Business Day), which notice shall be mailed
on or before the tenth day after the occurrence of a Fundamental Change.

 

As used herein, “Fundamental Change” means the occurrence of
any transaction or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which all or substantially
all of the Common Stock shall be exchanged for, converted into, acquired for,
or constitutes solely the right to receive, consideration which is not all or
substantially all common stock that is (or, upon consummation of or immediately
following such transaction or event, which will be) listed on a United States
national securities exchange or approved (or, upon consummation of or
immediately following such transaction or event, which will be approved) for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.

 

To have this Security repurchased upon a Fundamental Change Repurchase
Date, a Holder must (1) complete and manually sign the  form entitled “Option to Elect Repurchase
Upon a Fundamental Change” below (or complete and manually sign a facsimile of
such notice) and deliver such notice to the Company, and (2) surrender this
Security to the Company at the office or

 

10

 

agency of the Company maintained for that purpose or, at the option of
such holder, the Corporate Trust Office, on or prior to the close of business
on the Fundamental Change Repurchase Date, and the Holder shall have the right
to withdraw this Security after it is so surrendered prior to such time.

 

In the event of repurchase of this Security in part only, new Notes of
like tenor for the portion hereof not repurchased will be issued in the name of
the Holder hereof upon the cancellation hereof.

 

7.                                       Amendment;
Waiver.

 

Subject to certain exceptions set forth in
the Indenture, (i) the Indenture (as it relates to the Notes) or the Notes may
be amended with the written consent of the Holders of at least 66-2/3% in
aggregate principal amount of the Notes at the time outstanding and (ii)
certain Defaults may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to add additional events of
default, to provide for uncertificated Notes in addition to or in place of
certificated Notes or to make any change that does not adversely affect the
rights of any Holder in any material respect.

 

8.                                       Defaults and
Remedies.

 

Under the Indenture, Events of Default include (i) default in the
payment of the principal of or premium, if any, on any of the Notes as and when
the same shall become due and payable either at Maturity or in connection with
any repurchase required upon a Fundamental Change, by acceleration or
otherwise; (ii) default in the payment of interest, including contingent
interest, if any, on any Note when due and continuance of such default for 30
days; (iii) default in the performance, or breach, of any other covenant or
warranty of the Company in the Indenture (other than a covenant or warranty a
default in the performance or breach of which is otherwise addressed) with respect
to any Note and continuance of such default or breach for 60 days after written
notice to the Company by the Trustee or to the Company and the Trustee by
holders of not less than 25% in aggregate principal amount of the Notes; (iv)
default in the Company’s obligation to convert any portion of the principal
amount of a Note in accordance with its terms following exercise by the Holder
of the right to convert such Note; (v) default in the Company’s obligation to
provide notice upon a Fundamental Change; (vi) any event of default under any
mortgage, indenture or other instrument under which any indebtedness for
borrowed money in an aggregate principal amount exceeding $5,000,000 of the
Company or Providian National Bank shall become due and payable, if such
acceleration is not rescinded or annulled within 30 days after written notice
as provided by the Indenture; (vii) certain events of bankruptcy, insolvency or
reorganization of the Company; or

 

11

 

(viii) any other event that may be specified with respect to the Notes
or Securities of all series in the Indenture.

 

9.                                       Return of
Unclaimed Funds and Securities.

 

The Trustee and the Paying Agent shall return
to the Company upon written request any money or securities held by them for
the payment of any amount with respect to the Notes that remains unclaimed for
two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the money or securities must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person.

 

10.                                 Persons Treated As
Owner.

 

The registered Holder hereof on the Security Register of the Company
shall be deemed to be and shall be treated as the absolute owner of this
Security for all purposes, including for the purpose of receiving payment on
account hereof, for the conversion hereof and for all other purposes, and none
of the Company, the Trustee, the Paying Agent, the Conversion Agent or any Registrar
shall be affected by any notice to the contrary.

 

11.                                 Trustee Dealings with
the Company.

 

Subject to certain limitations imposed by the
TIA, the Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Notes and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.

 

12.                                 No Recourse Against
Others.

 

A director, officer, employee or stockholder,
as such, of the Company shall not have any liability (except in the case of bad
faith or willful misconduct) for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting this Security, the Holder hereof
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.

 

13.                                 Authentication.

 

This Security shall not be valid until an
authorized signatory of the Trustee manually signs the Trustee’s Certificate of
Authentication on the other side of this Security.

 

12

 

14.                                 Abbreviations.

 

Customary abbreviations may be used in the
name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

 

15.                                 GOVERNING LAW.

 

THE INDENTURE AND THE NOTES WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

16.                                 DEFEASANCE.

 

The provisions for defeasance and covenant
defeasance set forth in Article XIII of the Indenture will not apply to the
Notes.

 

 

The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture or a copy of the
text of this Security in larger type. Requests may be made to:

 

Providian Financial Corporation

201 Mission Street

San Francisco, CA 94105

Attention: Investor Relations

 

13

 

ASSIGNMENT
FORM

 

To assign this
Security, fill in the form below:

 

I or we hereby assign and transfer this
Security to

 

 

 

(Insert
assignee’s social security or tax identification no.)

 

 

 

(Print or type
assignee’s name, address and zip code)

 

and irrevocably appoint
                      
agent to transfer this Security on the books of the Company.  The agent may substitute another to act for
him.

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

(Sign exactly as your name appears on the
other side of this Security)

 

	
  Signature Guarantee*:

  	
   

  

 

*              The Holder’s
signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

14

 

CONVERSION
NOTICE

 

To convert this Security into Common Stock of
the Company, check the box:  o

 

To convert only part of this Security, state
the principal amount to be converted (which must be $1,000 or an integral
multiple of $1,000):

 

$

 

If you want the stock certificate made out in
another person’s name, fill in the form below:

 

 

 

(Insert other
person’s social security or tax identification no.)

 

 

 

(Print or type
other person’s name, address and zip code)

 

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

(Sign exactly as your name appears on the other side of this Security)

 

	
  Signature Guarantee*:

  	
   

  

 

*              The Holder’s
signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

15

 

OPTION TO
ELECT REPURCHASE UPON A FUNDAMENTAL CHANGE

 

To elect to have the Company repurchase this
Security, check the box:  o

 

To elect to have the Company repurchase only
part of this Security, state the principal amount to be repurchased (which must
be $1,000 or an integral multiple of $1,000):

 

$

 

If you want payment to be made to another
person, fill in the form below:

 

 

 

(Insert other
person’s social security or tax identification no.)

 

 

 

(Print or type
other person’s name, address and zip code)

 

In consideration of payment of repurchase
price upon the date of repurchase, I or we hereby assign and transfer this
Security to the Company and irrevocably appoint
                    
as agent to transfer this Security or such portion thereof set forth above on
the books of the Company.  The agent may
substitute another to act for him.

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

(Sign exactly as your name appears on the other side of this Security)

 

	
  Signature Guarantee*:

  	
   

  

 

*              The Holder’s
signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

16Exhibit
10.1

 

AMENDMENT NO. 1 TO

STOCK PURCHASE AGREEMENT

 

THIS AMENDMENT NO. 1 (the
“Amendment”),
dated as of May 20, 2003, is by and between INTERLEUKIN GENETICS, INC., a
Delaware corporation (the “Company”), and PYXIS INNOVATIONS INC., a
Delaware corporation (“Pyxis” or “Investor”).

 

The Company and Pyxis are
parties to a Stock Purchase Agreement dated as of March 5, 2003 (the “Agreement”).  Capitalized terms not otherwise defined in
this Amendment shall have the meanings given to them in the Agreement.

 

                                The
parties agree as follows:

 

1.                                       Section 5.1 of the Agreement is hereby
amended to add the following at the end of said section:  “The Investor agrees to vote its shares of
Preferred Stock at the Company’s next annual meeting of stockholders in favor of
(i) increasing the Company’s authorized preferred stock from 5,000,000 shares
to 6,000,000 shares and (ii) increasing the Company’s authorized Common Stock
from 50,000,000 to 75,000,000.  In
exchange, the Company agrees to not issue, by merger or otherwise, any Common Stock or preferred stock
other than in a Permitted Issuance (as defined in Section 5.3 below) without
the vote or written consent of the holders of at least a majority of the then
outstanding shares of Preferred Stock. 
The Company’s obligation under this Section 5.1 shall terminate at such
time as the Investor and its Affiliates own less than 40% of the shares of
Preferred Stock issued pursuant to this Agreement. The Company acknowledges
that money damages alone would be an inadequate remedy for any breach or
threatened breach by Company of this Section and that, in addition to any other
rights and remedies Pyxis may have for any such breach or threatened breach,
the Investor shall have the right to seek injunctive and other equitable relief,
including specific performance.  For the
purposes of this Section 5.1, “Permitted Issuances” means the issuance of shares of Common Stock, preferred stock or rights to acquire
either of the foregoing by the Company (i) upon conversion or exercise of
any convertible securities, options, or warrants outstanding prior to the date
hereof; (ii) to employees, consultants, officers or directors of the Company
pursuant to any stock option, stock purchase or stock bonus plan, agreement or
arrangement approved prior to the date hereof by the Company’s Board of
Directors; (iii) up to an aggregate of 500,000 shares to persons or entities in connection with
equipment leasing arrangements, bank or other institutional loans, or strategic
research partnerships and where the principal purpose of such issuance is not
equity financing; (iv) as a result of any stock split, combination, dividend,
distribution, reclassification, exchange or substitution; and (v) in an equity
financing transaction approved by at least a majority of the directors elected
by the Investor.”

2.                                       Except as amended hereby, all of the
terms and conditions of the Agreement shall remain in full force and effect.
This Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

 

3.                                       This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Amendment shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without regard to
principles of conflicts of laws.

* * *

 

5

 

This Amendment No.
1 to the Stock Purchase Agreement is signed as of the date first written above.

 

 

	
   

  	
  INTERLEUKIN GENETICS, INC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Fenel M.. Eloi

  	
   

  
	
   

  	
  Fenel M. Eloi

  	
   

  
	
   

  	
  Its Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PYXIS INNOVATIONS INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Janice Jackson

  	
   

  
	
   

  	
  Janice Jackson

  	
   

  
	
   

  	
  Its Duly Authorized Agent

  	
   

  

 

6

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