Exhibit 1.1
SELLING AGENT AGREEMENT
by and among
Discover
Financial Services
and
Incapital LLC (as Purchasing Agent)
and
the Agents named
herein from time to time
September 8, 2015
September 8, 2015
To the Purchasing Agent and the Agents listed on the signature pages hereto and each person that shall have become an Agent from time to time as provided
herein:
Discover Financial Services, a Delaware corporation (the “
Company
”), Incapital LLC (the “
Purchasing
Agent
”), and the Agents (as defined below), are entering into this Selling Agent Agreement (this “
Agreement
”) as of the date written above.
I.
The Company proposes to
issue and sell its Discover Financial Services InterNotes
®
due 9 months or more from date of issue (the “
Notes
”). The Notes may be Senior Notes or Subordinated Notes. The
Senior Notes will be issued pursuant to the Senior Indenture, dated as of June 12, 2007 (as amended or supplemented from time to time, the “
Senior Indenture
”), between the Company and U.S. Bank National Association, as trustee
(the “
Senior Trustee
”). The Subordinated Notes will be issued pursuant to the Subordinated Indenture, dated as of September 8, 2015 (as amended or supplemented from time to time, the “
Subordinated Indenture
”),
between the Company and U.S. Bank National Association, as trustee (the “
Subordinated Trustee
”). The Senior Trustee and the Subordinated Trustee are collectively referred to herein as the “
Trustees
,” and the Senior
Indenture and the Subordinated Indenture are collectively referred to herein as the “
Indentures
.” The terms of the Notes are described in the prospectus, as supplemented, referred to below. As of the date hereof, the Company has
authorized the issuance and sale of up to $1,000,000,000 aggregate principal amount of the Notes.
Subject to the terms and conditions
contained in this Agreement, the Company hereby (1) appoints each of you as agents of the Company for the purpose of soliciting offers to purchase Notes and each of you hereby severally and not jointly agrees to use your reasonable best efforts
to solicit offers to purchase Notes upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify and in accordance with the terms hereof, and after consultation with the Purchasing Agent, and
(2) agrees that whenever the Company determines to sell Notes pursuant to this Agreement, such Notes shall be sold pursuant to a Terms Agreement (as defined herein) relating to such sale in accordance with the provisions of
Section VI
hereof between the Company and the Purchasing Agent, with the Purchasing Agent purchasing such Notes as principal for resale to other Agents or dealers (the “
Selected Dealers
”), pursuant to a Master Selected Dealer Agreement, the
form of which is attached hereto as
Exhibit G
, each of whom will purchase such Notes as principal.
The Company reserves the right
to appoint additional agents (each an “
Agent
” and, together with the Purchasing Agent and the agents listed on the signature pages hereto, the “
Agents
”) for the purpose of soliciting offers to purchase Notes, which
agency shall be on an ongoing basis or a one-time basis. Any such additional Agent shall become a party to this Agreement and shall thereafter be subject to the provisions hereof and entitled to the benefits hereunder upon the execution of a
counterpart hereof or other form of acknowledgment of its appointment hereunder, including the form of letter attached hereto as
Exhibit H
.
II.
(a) An automatic shelf registration statement as defined in Rule 405 under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “
1933 Act
”) in respect of certain of the Company’s securities, including the Notes, has been filed on Form S-3 with the Securities and Exchange Commission (the
“
Commission
”) not earlier than three years prior to the date hereof. Such registration statement has become effective pursuant to the rules and regulations promulgated by the Commission under the 1933 Act, and the Indentures were
filed or incorporated by reference as exhibits to the registration statement and the Indentures have been duly qualified under the Trust Indenture Act of 1939, as amended (the “1939 Act”).
(b) For the purposes of this Agreement the following terms shall have the following meanings:
(1) “
Registration Statement
” as of any time means the registration statement on Form S-3 (File No. 333-205280), as
amended by any amendment thereto, registering the offer and sale of the Notes, among other securities, in the form then filed by the Company with the Commission, including any document incorporated by reference therein and any prospectus, prospectus
supplement and/or pricing supplement deemed or retroactively deemed to be a part thereof at such time that has not been superseded or modified. “Registration Statement” without reference to a time means such registration statement, as
amended, as of the time of the first contract of sale for the Notes of a particular tranche, which time shall be considered the “new effective date” of such registration statement, as amended, with respect to such Notes (within the meaning
of Rule 430B(f)(2) under the 1933 Act). For purposes of this definition, information contained in a form of prospectus, prospectus supplement or pricing supplement that is retroactively deemed to be a part of such registration statement, as
amended, pursuant to Rule 430B or Rule 430C under the 1933 Act shall be considered to be included in such registration statement, as amended, as of the time specified in Rule 430B or Rule 430C, as the case may be, under the 1933 Act. Any reference
to “amend”, “amendment” or “supplement” shall be deemed to refer to and include any documents incorporated by reference therein.
(2) “
Statutory Prospectus
” means, collectively, (i) the base prospectus relating to various securities of the Company
that is included in the Registration Statement, (ii) the prospectus supplement relating to the Notes, filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act prior to the offer and acceptance of the Notes of a
particular tranche and (iii) any preliminary pricing supplement used in connection with the Notes of a particular tranche, as filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act, including, in each case, any
document incorporated by reference therein. Any reference to “amend”, “amendment” or “supplement” shall be deemed to refer to and include any documents incorporated by reference therein.
(3) “
Prospectus
” means, collectively, the Statutory Prospectus (excluding any preliminary pricing supplement) and the final
pricing supplement relating to the Notes of a
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particular tranche filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act that discloses the public offering price and other final terms of such Notes and otherwise
satisfies Section 10(a) of the 1933 Act. Any reference to “amend”, “amendment” or “supplement” shall be deemed to refer to and include any documents incorporated by reference therein.
(4) “
Issuer Free Writing Prospectus
” means any “issuer free writing prospectus,” as defined in Rule 433 under the
1933 Act, relating to the Notes of a particular tranche in the form filed or required to be filed by the Company with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under
the 1933 Act.
(5) “
Applicable Time
” means the time agreed to by the Company and the applicable Agent(s) as the time of
the pricing of the Notes of a particular tranche, which, unless otherwise agreed, shall be the time immediately after the Company and the Agent agree on the pricing terms of such Notes.
(6) “
Representation Date
” means the date of each acceptance by the Company of an offer for the purchase of Notes (whether to
one or more Agents as principal or through the Agents as agents); the Applicable Time; the date of each delivery of Notes (whether to one or more Agents as principal or through the Agents as agents) (the date of each such delivery to one or more
Agents as principal being hereafter referred to as a “
Settlement Date
”); and any date on which the Registration Statement or the Prospectus shall be amended or supplemented (other than any Current Report on Form 8-K relating
exclusively to the issuance of debt securities under the Registration Statement or furnished solely for the purpose of disclosure under Item 2.02 or Item 7.01 thereof or exhibits furnished pursuant to Item 9.01 thereof).
III.
The Agents’
obligations hereunder are subject to the following conditions:
(a) On the date hereof, the Agents shall have received the following legal
opinions, dated the date hereof and in form and substance satisfactory to the Agents:
(1) The opinion of the Deputy General Counsel of
the Company (“Deputy
General Counsel
”) which shall be substantially in the form attached hereto as
Exhibit A
.
(2)
The opinion of Sidley Austin LLP, counsel for the Company, which shall be substantially in the form attached hereto as
Exhibit B
.
(3) The opinion of Mayer Brown LLP, counsel for the Agents, in a form and substance satisfactory to the Agents.
(b) On the date hereof, the Agents shall have received a certificate signed by the Chief Executive Officer, the Chief Financial Officer, the
Treasurer or any other authorized officer of the Company satisfactory to the Agents, dated the date hereof, to the effect that the signer(s) of such certificate have carefully examined the Registration Statement, the Prospectus,
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the Disclosure Package (as defined herein) and this Agreement and that to the best of their knowledge (i) the representations and warranties of the Company in this Agreement are true and
correct on and as of the date of such certificate with the same effect as if made on such date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date of
such certificate; (ii) no order suspending the effectiveness of the Registration Statement shall be in effect and no proceeding for such purpose pursuant to Rule 401(g)(2) or pursuant to Section 8A under the 1933 Act shall be pending
before or threatened by the Commission; and (iii) since the date of the most recent financial statements of the Company included or incorporated by reference in the Disclosure Package and the Prospectus, there has not been any material adverse
change, or any development involving a material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a
whole, except as set forth or contemplated in the Disclosure Package and the Prospectus.
(c) On the date hereof, the Agents shall have
received a letter from Deloitte & Touche LLP, dated the date hereof and in form and substance satisfactory to the Agents, confirming that or including:
(1) Deloitte & Touche LLP is an independent registered public accounting firm with respect to the Company and its subsidiaries within
the meaning of the 1933 Act and the applicable rules and regulations thereunder adopted by the Commission and the Public Company Accounting Oversight Board (United States) (“
PCAOB
”).
(2) In Deloitte & Touche LLP’s opinion, the consolidated financial statements and financial statement schedules of the Company
and its subsidiaries audited by Deloitte & Touche LLP and included or incorporated by reference in the Registration Statement and the Prospectus comply as to form in all material respects with the applicable accounting requirements of the
1933 Act, the 1934 Act (as defined herein) and the related rules and regulations thereunder adopted by the Commission.
(3) All other
statements ordinarily contained in accountants’ “comfort letters” to underwriters in connection with registered public offerings, including conclusions and findings of Deloitte & Touche LLP with respect to the financial
information included or incorporated by reference in the Registration Statement and the Prospectus.
(d) On the date hereof and on each
Settlement Date with respect to any purchase of Notes by the Purchasing Agent, the Company shall have furnished to the Agents such further certificates and documents as the Agents may reasonably request.
The obligations of the Purchasing Agent to purchase Notes as principal, both under this Agreement and under any Terms Agreement, are subject
to the conditions that (i) no litigation or proceeding shall be threatened or pending to restrain or enjoin the issuance or delivery of the Notes, or which in any way questions or affects the validity of the Notes, (ii) no stop order
suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission, (iii) there shall not have occurred since the date of such Terms
Agreement a downgrading in the rating assigned to any of the Company’s debt securities (including the Notes) by any “nationally recognized
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statistical rating organization” (“
NSRO
”), as such term is defined in Section 3 of the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “
1934 Act
”), and no such NSRO shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any of the Company’s debt securities
(including the Notes), with possible negative implications, and (iv) there shall not have occurred since the date of such Terms Agreement any material change, or any development involving an impending material change, in or affecting the
business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its consolidated subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus and the Disclosure Package (exclusive of any amendment or supplement thereto since the date of the applicable Terms Agreement), each of which conditions shall be met on the date of
the Terms Agreement and on the corresponding Settlement Date. Further, if specifically called for by any written agreement by the Purchasing Agent, including a Terms Agreement, to purchase Notes as principal, the Purchasing Agent’s obligations
hereunder and under such agreement, shall be subject to such additional conditions, including those set forth in
subsections (a)
,
(b)
and
(c)
above, as agreed to by the parties, each of which such agreed conditions
shall be met on the corresponding Settlement Date, and/or the date of the Terms Agreement, if applicable.
IV.
In further consideration of your agreements herein contained, the Company covenants as follows:
(a) The Company will notify the Agents promptly (i) when any amendment (including any post-effective amendment) to the Registration
Statement shall have become effective, (ii) of the filing of any supplement to the Prospectus and any amended Prospectus (iii) of the receipt of any comments from the Commission relating to the Registration Statement, the Prospectus or the
Disclosure Package, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the Prospectus, or of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, or, if known to the
Company, of the initiation or threatening of any proceedings for any of such purposes. The Company’s obligation to notify the Agents pursuant to the foregoing clauses (i) and (ii) shall not apply with respect to any document filed by
the Company with the Commission via the Electronic Data Gathering Analysis and Retrieval System (“
EDGAR
”) or posted by the Commission on EDGAR.
(b) The Company will give the Agents notice of its intention to file or prepare any additional registration statement with respect to the
registration of additional Notes or any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than an amendment or supplement providing solely for a change in the interest rates or maturity dates of Notes or
similar changes) and will furnish the Agents with copies of any such registration statement or amendment or supplement proposed to be filed or prepared a reasonable time in advance of such proposed filing or preparation, as the case may be, and will
give the Agents a reasonable opportunity to comment on any such proposed amendment or supplement;
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provided, however
, that (i) the foregoing requirement shall not apply to any of the Company’s periodic filings with the Commission filed pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act and (ii) any Pricing Supplement (as defined below) that merely sets forth the terms or a description of particular Notes shall only be reviewed and approved by the Agent or Agents offering such Notes.
(c) The Company agrees to provide the Agents with such number of copies of the Registration Statement, including exhibits and all amendments
thereto, any Issuer Free Writing Prospectus (including any amendments or supplements thereto) and the Prospectus (including any amendments or supplements thereto) as the Agents may reasonably require in connection with the sale of the Notes. The
Company will furnish to the Agents as many copies of the Prospectus and the Statutory Prospectus (both as amended or supplemented) as the Agents shall reasonably request so long as the Agents are required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes under the 1933 Act.
(d) The Company will prepare, with respect to any Notes to be
sold through or to one or more Agents pursuant to this Agreement (and any applicable Terms Agreement), a pricing supplement with respect to such Notes in substantially the form attached as
Exhibit F
(a “
Pricing
Supplement
”) and will file such Pricing Supplement with the Commission pursuant to Rule 424(b) under the 1933 Act not later than the close of business on the second business day following the earlier of the date of determination of the
offering price or the date it is first used in connection with a public offering or sale (or such earlier time as may be required under the 1933 Act) and (ii) file any “free writing prospectus,” as defined in Rule 405 under the 1933
Act, required to be filed with the Commission pursuant to and in accordance with the requirements of Rule 433 under the 1933 Act.
(e)
Except as otherwise provided in
subsection (k)
of this Section, if at any time during the term of this Agreement any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of your counsel or
counsel for the Company, to further amend or supplement the Disclosure Package and the Prospectus in order that the Disclosure Package and the Prospectus will not include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading in light of the circumstances existing at the time the Disclosure Package and the Prospectus are delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of
either such counsel, to amend or supplement the Registration Statement, the Disclosure Package or the Prospectus in order to comply with the requirements of the 1933 Act, immediate notice shall be given, and confirmed in writing, to the Agents to
cease the solicitation of offers to purchase the Notes and to cease sales of any Notes by the Purchasing Agent, and the Company will promptly prepare and file with the Commission such amendment or supplement as may be necessary to correct such
untrue statement or omission or to make the Registration Statement, the Disclosure Package and Prospectus comply with such requirements.
(f) The Company will make generally available to its security holders as soon as practicable, a consolidated earnings statement (in form
complying with the provisions of Section 11(a) of and Rule 158 under the 1933 Act) that complies with Section 11(a) of the 1933 Act (including Rule 158 under the 1933 Act).
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(g) The Company shall use its commercially reasonable efforts, in cooperation with the Agents, to
qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Agents shall reasonably request and to continue such qualifications in effect so long as required for distribution of the Notes; provided that
the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to
service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h) The Company agrees to pay the required Commission filing fees relating to the Notes within the time required by Rule 456(b)(1) under the
1933 Act without regard to the proviso therein and otherwise in accordance with Rule 456(b) and 457(r) under the 1933 Act.
(i) The
Company has filed or will file each Statutory Prospectus and Prospectus pursuant to and in accordance with Rule 424(b) within the prescribed time period.
(j) If the third anniversary of the initial effective date of the Registration Statement would occur during an offering of Notes before all of
the Notes then being offered have been sold by an Agent, then prior to such third anniversary, the Company will file a new shelf registration statement and take any other action necessary to permit the public offering of the Notes to continue
without interruption. References in this Agreement to the “Registration Statement” shall include any such new registration statement after it has become effective.
(k) The Company shall not be required to comply with the provisions of
subsection (e)
of this Section or the provisions of
Sections VIII(b)
,
(c)
, and
(d)
during any period from the time the Agents have suspended solicitation of purchases of the Notes pursuant to a direction from the Company.
(l) The Company will use the Net Proceeds in the manner specified in each Prospectus and each Disclosure Package under the heading “Use
of Proceeds.”
(m) Unless otherwise agreed upon in any Terms Agreement between the Purchasing Agent acting as principal and the
Company, between the date of such Terms Agreement and the delivery of Notes to the Purchasing Agent as principal with respect to such Terms Agreement, the Company will not, without the prior written consent of the Purchasing Agent, which shall not
be unreasonably withheld or delayed, offer, sell or issue, or enter into any agreement to sell or issue, any debt securities of the Company in the United States intended primarily for sale to retail investors (other than the Notes to which such
Terms Agreement relates) which have substantially similar maturities and other terms as such Notes and which are payable as to principal and interest in the currency in which such Notes are payable.
(n) The Company will notify the Purchasing Agent as soon as practicable, and confirm such notice in writing, of any change in the rating
assigned by any NSRO to any debt securities of the Company (including the Notes), or the public announcement by any NSRO that it has under surveillance or review of, or has changed its outlook with respect to, its rating of any such debt securities
(including the Notes), with possible negative implications.
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V.
(a) The Agents, severally and not jointly, propose to use their respective reasonable best efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth herein and in the Prospectus and upon the terms communicated to the Agents from time to time by the Company or the Purchasing Agent, as the case may be. For the purpose of such solicitation the Agents will use
the Prospectus as then amended or supplemented which has been most recently distributed to the Agents by the Company, and the Agents will solicit offers to purchase only as permitted or contemplated thereby and herein and will solicit offers to
purchase the Notes only as permitted by the 1933 Act and the securities laws or regulations of any applicable jurisdiction. The Company reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Notes commencing at
any time for any period of time or permanently. Upon receipt of instructions (which may be given orally) from the Company, the Agents will suspend promptly solicitation of offers to purchase until such time as the Company has advised the Agents that
such solicitation may be resumed.
Unless otherwise instructed by the Company, the Agents are authorized to solicit offers to purchase the
Notes only in denominations of $1,000 or more (in multiples of $1,000). The Agents are not authorized to appoint subagents or to engage the services of any other broker or dealer in connection with the offer or sale of the Notes without the consent
of the Company. Unless otherwise instructed by the Company, the Purchasing Agent shall communicate to the Company, orally or in writing, each offer to purchase Notes. The Company shall have the sole right to accept offers to purchase Notes and may
reject any proposed offers to purchase Notes as a whole or in part. Each Agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed
a breach of its agreements contained herein. The Company agrees to pay the Purchasing Agent, as consideration for soliciting offers to purchase Notes pursuant to a Terms Agreement, a concession in the form of a discount equal to the percentages of
the initial offering price of each Note actually sold as set forth in
Exhibit C
hereto (the “
Concession
”);
provided, however,
that the Company and the Purchasing Agent may agree also to a Concession greater than or
less than the percentages set forth on
Exhibit C
hereto. The actual aggregate Concession with respect to each tranche of Notes will be set forth in the related Pricing Supplement. The Purchasing Agent and the other Agents or Selected Dealers
will share the above-mentioned Concession in such proportions as they may agree.
Unless otherwise authorized by the Company, all Notes
shall be sold to the public at a purchase price not to exceed 100% of the principal amount thereof, plus accrued interest, if any. Such purchase price shall be set forth in the confirmation statement of the Agent or Selected Dealer responsible for
such sale and delivered to the purchaser along with a copy of the Prospectus (if not previously delivered) and Pricing Supplement.
(b)
Procedural details relating to the issue and delivery of, and the solicitation of purchases and payment for, the Notes are set forth in the Administrative Procedures attached hereto as
Exhibit D
(the “Procedures”), as amended from
time to time. Unless otherwise provided in a Terms Agreement, the provisions of the Procedures shall apply to all transactions contemplated hereunder. The Agents and the Company each agree to perform the respective duties and obligations
specifically provided to be performed by each in the Procedures as amended from time to time. The Procedures may only be amended by written agreement of the Company and the Agents.
(c) The Company, the Purchasing Agent and each Agent, severally and not jointly, acknowledges and agrees, and each Selected Dealer will be
required to acknowledge and agree, that the Notes are being offered for sale in the United States only.
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VI.
Each sale of Notes shall be made in accordance with the terms of this Agreement and a separate agreement in substantially the form attached as
Exhibit E
(a “
Terms Agreement
”) to be entered into which will provide for the sale of such Notes to, and the purchase and reoffering thereof, by the Purchasing Agent as principal. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Notes by the Purchasing Agent. The offering of Notes by the Company hereunder and the Purchasing Agent’s agreement to purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations, warranties and agreements of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall describe the Notes to be purchased pursuant thereto by the
Purchasing Agent as principal, and may specify, among other things, the principal amount of Notes to be purchased, the interest rate or formula and maturity date or dates of such Notes, the interest payment dates, if any, the net proceeds to the
Company, the initial public offering price at which the Notes are proposed to be reoffered, and the time and place of delivery of and payment for such Notes, whether the Notes provide for a Survivor’s Option, whether the Notes are redeemable or
repayable and on what terms and conditions, and any other relevant terms. In connection with the resale of the Notes purchased, without the consent of the Company, the Agents are not authorized to appoint sub-agents or to engage the service of any
other broker or dealer, nor may you reallow any portion of the Concession paid to you. Terms Agreements, each of which shall be substantially in the form of
Exhibit E
hereto, or as otherwise agreed to between the Company and the Purchasing
Agent, may take the form of an exchange of any standard form of written telecommunication between the Purchasing Agent and the Company.
VII.
(a) The Company represents
and warrants to the Agents as of the date hereof and as of each Representation Date as follows:
(1) (i) The Registration Statement is an
“automatic shelf registration statement” as defined under Rule 405 of the 1933 Act that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission to the use of
such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company. No order suspending the effectiveness of the Registration Statement has been issued by the Commission
and, to the Company’s knowledge, no proceeding for that purpose or pursuant to Section 8A of the 1933 Act against the Company or related to the offering of the Notes has been initiated or threatened by the Commission; as of the applicable
effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement complied and will comply in all
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material respects with the 1933 Act and the Trust Indenture Act, and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the date hereof, as of each Applicable Time, as of each Settlement Date and as of each other
Representation Date, the Prospectus will not contain any 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, not
misleading; provided that the Company makes no representation and warranty with respect to (i) that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) of either of the Trustees under
the Trust Indenture Act or (ii) any information or statements contained therein or omitted therefrom in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of an Agent expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by or on behalf of an Agent consists of the information described as such in
Section IX(e)
hereof.
(ii) The documents incorporated by reference in the Prospectus and the Disclosure Package, when they
(or any amendments thereto) were filed with the Commission, conformed in all material respects to the requirements of the 1934 Act and none of such documents contained, when read together with the other information in the Registration Statement, any
untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the Disclosure Package, when such documents are filed with the Commission will conform in all material respects to the requirements of the 1934
Act and will not contain, when read together with the other information in the Registration Statement, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(iii) As of each Applicable Time, the Statutory
Prospectus, any Issuer Free Writing Prospectuses used at or prior to the Applicable Time and the final term sheet relating to the Notes of a particular tranche constituting an Issuer Free Writing Prospectus and a Permitted Free Writing Prospectus
(as defined below), when considered together (collectively, the “Disclosure Package”) did not contain any 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, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of an Agent expressly for use in such Disclosure Package, it being understood and agreed that the only such information furnished by or on behalf of an Agent consists of the information described as such in
Section IX(e)
hereof.
(iv) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the
completion of the public offer and sale of the Notes of the particular tranche (which completion the lead Agent(s) shall promptly communicate to the
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Company) or until any earlier date that the Company notified or notifies the applicable Agent(s) as described in the next sentence, did not, does not and will not include any information that
conflicted, conflicts or will conflict (within the meaning of Rule 433(c) under the 1933 Act) with the information then contained in the Registration Statement and the Prospectus. If, prior to the completion of the public offer and sale of the Notes
of the particular tranche (which completion the lead Agent(s) shall promptly communicate to the Company), at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly (i) notify the applicable Agent(s) and, subject to Section IV(b),
(ii) either (1) amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission or (2) file a report with the Commission under the 1934 Act that corrects such untrue
statement or omission and promptly notify the applicable Agent(s) that such Issuer Free Writing Prospectus shall no longer be used.
(2)
At the time of filing of the Registration Statement, the Company was not, and at the times specified in the 1933 Act in connection with the offering of the Notes, the Company is not, an ineligible issuer and was or is (as applicable) a well-known
seasoned issuer. The Company will pay the registration fees for any offering pursuant to this Agreement within the time period required by Rule 456(b)(1)(i) under the 1933 Act (without giving effect to the proviso therein) and in any event prior to
any applicable Settlement Date.
(3) Deloitte & Touche LLP, who have audited certain financial statements of the Company and its
subsidiaries and delivered their reports with respect thereto, is an independent registered public accounting firm with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required by the 1933 Act.
(4) The financial statements and the related notes
thereto included or incorporated by reference in the Registration Statement, the Prospectus and the Disclosure Package comply in all material respects with the applicable requirements of the 1933 Act and the 1934 Act, as applicable, and present
fairly, in all material respects, the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods covered thereby, except as described in the notes to such financial statements, and
any supporting schedules included or incorporated by reference in the Registration Statement present fairly, in all material respects, the information required to be stated therein; any selected financial data and the summary financial information
included or incorporated by reference in the Registration Statement, the Prospectus and the Disclosure Package fairly present in all material respects, the information included therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement, the Prospectus and the Disclosure Package.
11
(5) The Company and its subsidiaries maintain a system of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the 1934 Act) that complies with the requirements of the 1934 Act and has been designed by, or under the supervision of, their respective principal executive and principal financial officers, or
persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. There are no material weaknesses in
the Company’s internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
(6) The Company and its subsidiaries maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the 1934 Act)
that comply with the requirements of the 1934 Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is
accumulated and communicated to the Company’s principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure; the Company’s principal executive officer and principal
financial officer carried out evaluations of the effectiveness of the Company’s disclosure controls and procedures as required by Rule 13a-15 of the 1934 Act as of December 31, 2014 and concluded that such disclosure controls and
procedures were effective as of such date.
(7) Subsequent to the respective dates as of which information is given in the Prospectus or
Disclosure Package: (i) there has not been any change in the capital stock (other than the issuance of shares of common stock upon exercise of stock options and warrants described as outstanding in, and the grant of options and awards under
existing equity incentive plans described in, the Registration Statement, the Prospectus and the Disclosure Package), or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a material adverse change, in or affecting the business, properties, management, financial condition, stockholders’
equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of
business) that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the
12
Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any loss or interference with its business that is material to the
Company and its subsidiaries taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case of clauses (i), (ii) and (iii) as otherwise disclosed in, or contemplated by, the Registration Statement, the Prospectus and the Disclosure Package.
(8) Each of the Company and Discover Bank have been duly organized and are validly existing and in good standing under the laws of the State
of Delaware, are duly qualified as a foreign corporation to do business and are in good standing in each other jurisdiction in which the ownership or leasing of their respective property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified, in good standing or have such power or
authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries
taken as a whole (a “Material Adverse Effect”), or on the performance by the Company of its obligations under the Notes or this Agreement. Discover Bank is the only subsidiary of the Company that is a “significant subsidiary”
within the meaning of Rule 1-02 of Regulation S-X of the Commission.
(9) The Company has full right, power and authority to execute and
deliver this Agreement, the Notes and the applicable Indenture (collectively, the “
Transaction Documents
”) and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby has been duly and validly taken.
(10) The applicable Indenture has been duly authorized, executed and delivered by the Company and has been duly qualified under the Trust
Indenture Act and the applicable Indenture constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “
Enforceability Exceptions
”).
(11) The Notes have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the
applicable Indenture (assuming due authentication of the Notes by the applicable Trustee) and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the applicable Indenture.
(12) This Agreement has been duly authorized, executed and delivered by the Company.
13
(13) The Calculation Agreement dated as of September 8, 2015 between the Company and U.S.
Bank National Association as calculation agent (the “Calculation Agreement”) has been duly authorized, executed and delivered by the Company and constitutes valid and legally binding obligations of the Company enforceable against the
Company in accordance with their its, subject to the Enforceability Exceptions.
(14) The applicable Indenture conforms and the Notes will
conform, in all material respects, to the description thereof contained in the Registration Statement, the Prospectus and the Disclosure Package.
(15) (i) Neither the Company nor Discover Bank is in violation of its charter or by-laws or similar organizational documents;
(ii) neither the Company nor any of its subsidiaries is in default in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (iii) neither the Company nor
any of its subsidiaries is in violation of any law, statute, ordinance, administrative or governmental rule or regulation to which it is subject; and (iv) neither the Company nor any of its subsidiaries is in violation of any decree, judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii), (iii) and (iv) above, for any such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect or a material adverse effect on the performance by the Company of its obligations under the Notes or this Agreement.
Except as described in, or incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure Package, neither the
Company nor any of its subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request or
suggestion of, any Bank Regulatory Authority, as defined below, (each item in this sentence, a “
Regulatory Agreement
”), nor has the Company or any of its subsidiaries been advised by any Bank Regulatory Authority, that it is
considering issuing in writing, initiating, ordering or requesting any such Regulatory Agreement, other than in each case Regulatory Agreements that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(16) The Company’s execution, delivery and performance of this Agreement, the issuance and sale of the Notes, the compliance
by the Company with all of the provisions of the Notes, the applicable Indenture, any Terms Agreement and consummation of the transactions contemplated hereby and thereby and by the Prospectus and the Disclosure Package will not (i) 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 Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its subsidiaries is
14
subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or Discover Bank or (iii) result in the violation of
any law or statute or any decree, judgment, order, rule or regulation of any court or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clauses
(i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect or have a material adverse effect on the performance by the Company of its
obligations under the Notes or this Agreement.
(17) No consent, approval, authorization, order, license, registration or qualification of
or with any court or governmental or regulatory authority having jurisdiction over the Company or Discover Bank is required for the execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the
Notes and compliance by the Company with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for the registration of the Notes under the 1933 Act, the qualification of the applicable Indenture
under the Trust Indenture Act and such consents, approvals, authorizations, orders and registrations or qualifications as may have been obtained or made prior to any applicable Settlement Date or as may be required under applicable state securities
laws in connection with the purchase and distribution of the Notes by the Agents.
(18) Except in all cases as described in, or
incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure Package, the Company and its subsidiaries own, possess, license or have adequate rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (the
“
Intellectual Property
”) reasonably necessary for the conduct of their respective businesses as currently conducted; and, to the knowledge of the Company, the Company and its subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others, except for notices the content of which, if accurate, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(19) Except in all cases as described in, or incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure
Package, the Company and its subsidiaries possess all permits, licenses, certificates, approvals, consents and other authorizations (collectively, “
Permits
”) issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental and regulatory agencies or bodies reasonably necessary to conduct their businesses as described in the Registration Statement, the Prospectus and the Disclosure Package, except where the
failure to obtain or possess any Permit or have made such declarations or filings would not, individually or in the aggregate, have a Material Adverse Effect; the Company and its subsidiaries are in compliance with the terms and conditions of all
such Permits and all applicable laws and regulations (including, without limitation, all applicable banking laws and regulations), and all of the Permits are valid and in full force and effect, except, in each case, where the failure so to comply or
where the invalidity of such Permits or the failure of such Permits to be in full force and effect, individually or in the aggregate, would not have a Material Adverse Effect; the Company and its
15
subsidiaries have timely filed all reports, registrations, documents, filings statements and submissions, together with any amendments thereto, except as would not, individually or in the
aggregate, have a Material Adverse Effect, required to be filed with any Bank Regulatory Authority, as defined below; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or material
modification of any such Permits, except such revocations or modifications which would not, individually or in the aggregate, have a Material Adverse Effect.
(20) Except as described in, or incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure Package, there are
no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is the subject that,
individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect or a material adverse effect on the performance by the Company of its obligations
under the Notes or this Agreement; to the best knowledge of the Company, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others; and there are no
statutes, regulations or contracts or other documents that are required under the 1933 Act to be filed as exhibits to the Registration Statement or described in the Registration Statement, the Prospectus and the Disclosure Package that are not so
filed as exhibits to the Registration Statement or described in, or incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure Package.
(21) Except as described in, or incorporated by reference in, the Registration Statement, the Prospectus and the Disclosure Package, the
Company and its subsidiaries have paid all federal, state, local and foreign taxes (other than those which are being contested in good faith, for which appropriate reserves have been established or which, if not paid, would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect) and filed all material tax returns required to be paid or filed through the date hereof; and there is no tax deficiency in excess of the Company’s reserves for uncertain
tax positions that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets, except for such tax deficiencies which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(22) No person has the right to require the Company or any of its
subsidiaries to register any securities for sale under the 1933 Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Notes.
(23) The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Notes.
(24) Neither the Company nor any of its subsidiaries nor, to the best knowledge
of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) made any direct or indirect unlawful payment to any foreign government official or
employee from corporate funds; (ii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, or to the extent
16
applicable, the U.K. Bribery Act 2010, each as amended, or similar applicable law of any other relevant jurisdiction, or the rules or regulations thereunder (and the Company and its subsidiaries
have instituted and maintain policies and procedures to ensure compliance therewith); or (iii) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment that would result in a material violation of any applicable law
or regulation. No part of the proceeds of any offering pursuant to this Agreement will be used, directly or indirectly, in violation of the Foreign Corrupt Practices Act of 1977 or to the extent applicable, the U.K. Bribery Act 2010, each as
amended, or similar applicable law of any other relevant jurisdiction, or the rules or regulations thereunder.
(25) Except as set forth
in or contemplated by the Registration Statement, the Prospectus or the Disclosure Package, or except as would not, individually or in the aggregate, be reasonably expected to be material to the general affairs, management, financial condition,
results of operations, stockholders’ equity, business, properties or prospects of the Company and its subsidiaries or the performance by the Company of its obligations under the Notes, (i) the operations of the Company and its subsidiaries
are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable
jurisdictions, and the rules and regulations thereunder issued, administered or enforced by any governmental agency (collectively, the “
Money Laundering Laws
”) and (ii) no material action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(26) None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries (i) is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“
OFAC
”) or any other applicable sanctions
authority, including, without limitation, the United Nations Security Council, the European Union or Her Majesty’s Treasury (collectively, “
Sanctions
”), or (ii) is located, organized or resident in a country or territory
that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively, “
Sanctioned Countries
” and each, a “
Sanctioned Country
”); and the Company will
not directly or indirectly use the proceeds of any offering of the Notes hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the
activities of any person or entity that, at the time of such financing, is subject to any Sanctions, or would result in a violation of any Sanctions by, any individual or entity (including any individual or entity participating in the offering,
whether as underwriter, advisor, investor or otherwise).
(27) The Company is not and, after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the Registration Statement, the Prospectus and the Disclosure Package, will not be required to register as an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, “
Investment Company Act
”).
17
(28) The Company is duly registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended, and meets in all material respects the applicable requirements for qualification as such. Discover Bank holds the requisite authority from all applicable bank regulatory authorities to conduct business as a bank. Each of the
Company and Discover Bank are well-capitalized as set forth under all applicable laws and regulations.
(29) Except as set forth in or
contemplated by the Registration Statement, the Prospectus or the Disclosure Package, (i) the Company and each of its subsidiaries are in compliance with all laws administered by the Federal Reserve Board, the FDIC, the Delaware Office of the
State Bank Commissioner and any other federal or state bank regulatory authorities (together with the Federal Reserve Board, the FDIC and the Delaware Office of the State Bank Commissioner, the “
Bank Regulatory Authorities
”) with
jurisdiction over the Company and its subsidiaries, except for such failures to be in compliance as would not reasonably be expected to result in a Material Adverse Effect; and (ii) the deposit accounts of Discover Bank are insured up to
applicable limits by the FDIC and no proceedings for the termination or revocation of such insurance are pending or, to the knowledge of the Company, threatened.
Any certificate signed by any officer of the Company and delivered to the Agents or to counsel for the Agents shall be deemed a representation
and warranty by the Company to the Agents as to the matters covered thereby.
(b) All representations, warranties, covenants and
agreements of the Company contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Agent or
any controlling person of any Agent, or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Notes.
VIII.
(a) Each acceptance by
the Company of an offer for the purchase of Notes, and each delivery of Notes to the Purchasing Agent pursuant to a sale of Notes to the Purchasing Agent, shall be deemed to be an affirmation that the representations and warranties of the Company
made to the Agents in this Agreement and in any certificate theretofore delivered pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be
true and correct at the time of delivery to the Purchasing Agent of the Note or Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties
shall relate to the Registration Statement, the Prospectus and the Disclosure Package as amended and supplemented to each such time).
(b)
Except as otherwise provided in
subsection (k)
of
Section IV
, each time:
(1) the applicable Terms Agreement so
specifies (unless waived by the Purchasing Agent);
18
(2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q;
(3) the Company files a Current Report on Form 8-K required by Item 2 of Form 8-K with the Commission that is incorporated by reference
into the Prospectus or the Disclosure Package; or
(4) if reasonably requested by the Agents after the Registration Statement, the
Prospectus or the Disclosure Package has been amended or supplemented (other than by an amendment or supplement providing solely for interest rates, maturity dates or other terms of Notes or similar changes or an amendment or supplement which
relates exclusively to an offering of securities other than the Notes),
the Company shall furnish or cause to be furnished forthwith to the Agents a
certificate of the Company, signed by a duly authorized officer of the Company dated the date specified in the applicable Terms Agreement or dated the date of filing with the Commission of such supplement or document or the date of effectiveness of
such amendment, as the case may be, in form satisfactory to the Agents to the effect that the statements contained in the certificate referred to in
Section III(b)
hereof which was last furnished to the Agents are true and correct as of the
date specified in the applicable Terms Agreement or at the time of such filing, amendment or supplement, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to, as applicable, the
Registration Statement, the applicable Disclosure Package and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said
Section III(b)
,
modified as necessary to relate to the Registration Statement, the applicable Disclosure Package and the Prospectus as amended and supplemented to the time of delivery of such certificate.
(c) Except as otherwise provided in
subsection (k)
of
Section IV
, each time:
(1) the applicable Terms Agreement so specifies (unless waived by the Purchasing Agent);
(2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q; or
(3) if reasonably requested by the Agents after (i) the Company files a Current Report on Form 8-K required by Item 2 of Form 8-K
with the Commission that is incorporated by reference into the Prospectus or the Disclosure Package; or (ii) the Registration Statement, any Disclosure Package or the Prospectus has been amended or supplemented (other than by an amendment or
supplement providing solely for interest rates, maturity dates or other terms of the Notes or similar changes or an amendment or supplement which relates exclusively to an offering of securities other than the Notes),
the Company shall furnish or cause to be furnished forthwith to the Agents and counsel to the Agents the written opinions of Sidley Austin LLP, counsel to the
Company, and the Deputy General Counsel (or such other attorney, reasonably acceptable to the Agents, who exercises general supervision or review in connection with securities law matters for the Company), dated
19
the date specified in the applicable Terms Agreement or dated the date of filing with the Commission of such supplement or document or the date of effectiveness of such amendment, as the case may
be, in form and substance satisfactory to the Agents, of the same tenor as the opinions referred to in
Sections III(a)(1)
and
(2)
hereof, but modified, as necessary, to relate to, as applicable, the Registration Statement, the
applicable Disclosure Package (including, if applicable, any Permitted Free Writing Prospectuses (as defined below)) and the Prospectus as amended and supplemented to the time of delivery of such opinions; or, in lieu of such opinions, counsel last
furnishing such opinions to the Agents shall furnish the Agents with a letter substantially to the effect that the Agents may rely on such last opinions to the same extent as though it was dated the date of such letter authorizing reliance (except
that statements in such last opinion shall be deemed to relate to the Registration Statement, the applicable Disclosure Package (including, if applicable, any Permitted Free Writing Prospectuses) and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).
(d) Except as otherwise provided in
subsection (k)
of
Section IV
, each time:
(1) the applicable Terms Agreement so specifies (unless waived by the Purchasing Agent);
(2) the Company files an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q; or
(3) if reasonably requested by the Agents after (i) the Company files a Current Report on Form 8-K required by Item 2 of Form 8-K
with the Commission that is incorporated by reference into the Prospectus or the Disclosure Package; or (ii) the Registration Statement, the Prospectus or the Disclosure Package has been amended or supplemented to include additional financial
information required to be set forth or incorporated by reference therein under the terms of Item 11 of Form S-3 under the 1933 Act,
the Company
shall cause Deloitte & Touche LLP to furnish the Agents a letter, dated the date specified in the applicable Terms Agreement or dated the date of effectiveness of such amendment, supplement or document filed with the Commission, as the case
may be, in form satisfactory to the Agents, of the same tenor as the letter referred to in
Section III(c)
hereof but modified to relate to the Registration Statement, the Prospectus and the Disclosure Package, as amended and supplemented to
the date of such letter;
provided, however,
that if the Registration Statement, the Prospectus or the Disclosure Package is amended or supplemented solely to include financial information as of and for a fiscal quarter, Deloitte &
Touche LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement.
(e) The
Company represents and agrees that, unless it obtains the prior written consent of the Purchasing Agent, and each Agent represents and agrees that, unless it obtains the prior written consent of the Company and the Purchasing Agent, it will not make
any offer relating to the Notes that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the 1933 Act, required to be filed with the Commission or
retained by the Company under Rule 433 under the 1933 Act, provided that the prior consent of the Purchasing Agent and the Company shall be
20
deemed to have been given in respect of each Issuer Free Writing Prospectus that contains the final terms of a series of Notes included in the applicable final term sheet, if any, filed with the
Commission by the Company. Any such free writing prospectus consented to by the Company and the Purchasing Agent is hereinafter referred to as a “Permitted Free Writing Prospectus.” Unless otherwise agreed by the Company and the Purchasing
Agent, the Company (A) has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as a Issuer Free Writing Prospectus, and (B) has complied and will comply, as the case may be, with the requirements of Rules 164
and 433 under the 1933 Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, where required, legending and record keeping.
(f) The Company hereby acknowledges that (1) the solicitation of purchases of the Notes and any purchase and sale of the Notes pursuant
to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Agents and any affiliate through which they may be acting, on the other, (2) the Underwriters (as defined in
Exhibit G
hereinafter) are acting as principal and not as an agent (except as provided herein) or fiduciary of the Company and (3) the Company’s engagement of the Agents in connection with the offering and the process leading up to the offering is
as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Agents has advised or is
currently advising the Company on related or other matters). The Company agrees that it will not claim that the Agents have rendered advisory services of any nature or in any respect, or owe an agency (except as provided herein), fiduciary or
similar duty to the Company, in connection with such transaction or the process leading thereto.
IX.
(a) The Company agrees to indemnify and hold harmless each Agent, its affiliates, directors and officers and each person, if any, who
controls such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact contained in a Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus, the Disclosure Package or any amendment or supplement thereof, or caused by any
omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading,
provided, however
, that the Company will 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 any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by an Agent expressly for use therein, it being understood and agreed that the only such information furnished by any Agent consists of the information described as such in
Section IX(e)
below.
21
(b) Each Agent, severally and not jointly, agrees to indemnify and hold harmless the Company, its
directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with reference to written information relating to such Agent furnished to the Company by or on behalf of such Agent specifically for inclusion in the documents referred to in the foregoing indemnity.
(c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be
sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section IX except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section IX. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory
to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section IX that the
Indemnifying Person may designate in such proceeding and shall pay the reasonable fees and expenses of such proceeding and shall pay the reasonable fees and expenses of counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the reasonable fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person
and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection
with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for any Agent, its affiliates, directors and officers and any control persons of such Agent shall be designated in writing by such Agent and any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its
22
written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for reasonable fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by the
Indemnifying Person of such request, (ii) such Indemnifying Person shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided that an Indemnifying Person shall not be liable for any such settlement effected without its consent if such Indemnifying Person, prior
to the date of such settlement, (1) reimburses such Indemnified Person in accordance with such request for the amount of such fees and expenses of counsel as the Indemnifying Person believes in good faith to be reasonable and (2) provides
written notice to the Indemnified Person that the Indemnifying Person disputes in good faith the reasonableness of the unpaid balance of such fees and expenses. No Indemnifying Person shall, without the written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement
(x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) If
the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Agents on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company on the one hand and the Agents on the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Agents on the other shall be deemed to be in the same respective proportions as the
net proceeds (before deducting expenses) received by the Company from the sale of the Notes and the total underwriting discounts and commissions received by the Agents in connection therewith, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate offering price of the Notes. The relative fault of the Company on the one hand and the Agents on the other 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 relates to information supplied by the Company or by the Agents and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or
23
omission. The Company and the Agents agree that it would not be just and equitable if such contribution were determined by pro rata allocation (even if the Agents were treated as one entity for
such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to above in this paragraph (d). The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages
and liabilities referred to above in this paragraph (d) shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses incurred by such Indemnified Person in connection with any such action or
claim. Notwithstanding the provisions of this Section IX, in no event shall an Agent by required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Agent with respect to the
offering of the Notes from which such losses, liabilities, claims, damages and expenses arise exceeds the amount of any damages that such Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission with respect to such offering of Notes. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Company acknowledges, understands and agrees (i) the second and third sentences of the fifth
paragraph of text under the heading “Plan of Distribution”, and (ii) the first, second, third, fourth, fifth, sixth and ninth sentences of the sixth paragraph of text under the heading “Plan of Distribution”, each as
reflected in the prospectus supplement related to the Notes dated September 8, 2015, constitute the only information furnished in writing by any Agent for inclusion in the documents referred to in the foregoing indemnity.
(f) The remedies provided for in this Section IX are not exhaustive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
X.
The Company may elect to suspend or terminate the offering of Notes under this Agreement at any time; the Company also (as to any one or more
of the Agents) or any Agent (as to itself) may terminate the appointment and arrangements described in this Agreement. Upon receipt of instructions from the Company, the Purchasing Agent shall suspend or terminate the participation of any Selected
Dealer under the Master Selected Dealer Agreement attached hereto as
Exhibit G
. Such actions may be taken, in the case of the Company, by giving prompt written notice of suspension to all of the Agents and by giving not less than 5
days’ written notice of termination to the affected party and the other parties to this Agreement, or in the case of an Agent, by giving not less than 5 days’ written notice of termination to the Company and except that, if at the time of
termination an offer for the purchase of Notes shall have been accepted by the Company but the time of delivery to the purchaser or his agent of the Note or Notes relating thereto shall not yet have occurred, the Company shall have the obligations
provided herein with respect to such Note or Notes. The Company shall promptly notify the other parties in writing of any such termination.
The Purchasing Agent may, and, upon the request of an Agent with respect to any Notes being purchased by such Agent shall, terminate any
agreement hereunder by the Purchasing
24
Agent to purchase such Notes, immediately upon notice to the Company at any time prior to the Settlement Date relating thereto, if, after the date of such agreement, (i) trading generally
shall have been suspended or materially limited on the New York Stock Exchange or the Nasdaq Stock Market; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Notes on the terms and in the manner contemplated by this Agreement, the Prospectus and the Disclosure Package.
Any Terms Agreement shall
be subject to termination in your absolute discretion on the terms set forth or incorporated by reference therein. The termination of this Agreement shall not require termination of any agreement by the Purchasing Agent to purchase Notes as
principal, and the termination of any such agreement shall not require termination of this Agreement.
If this Agreement is terminated,
Section IV(c)
and
(e)
, the second paragraph of
Section V(a)
,
Section IX
and
Section XIII
hereof shall survive and shall remain in effect; provided that if at the time of termination of this Agreement an offer to
purchase Notes has been accepted by the Company but the time of delivery to the Purchasing Agent of such Notes has not occurred, the provisions of all of
Section IV
,
Section V(b)
and
Section VI
shall also survive until time of
delivery.
In the event a proposed offering is not completed according to the terms of this Agreement, an Agent will be reimbursed by the
Company only for out-of-pocket accountable expenses actually incurred.
XI.
Except as otherwise specifically provided herein, all statements, requests, notices and advices hereunder shall be in writing, or by telephone
if promptly confirmed in writing, and if to an Agent shall be sufficient in all respects if delivered in person or sent by telex, facsimile transmission (confirmed in writing), or registered mail to such Agent at its address, telex or facsimile
number set forth on
Annex A
hereto and if to the Company shall be sufficient in all respects if delivered or sent by telex, facsimile transmission (confirmed in writing) or registered mail to the Company at the address specified below. All
such notices shall be effective on receipt.
If to the Company:
2500 Lake Cook Road,
Riverwoods
Illinois 60015
fax: 224-405-4584
c/o Kelly McNamara Corley
25
or at such other address as such party may designate from time to time by notice duly given in accordance with
the terms of this Section.
XII.
This Agreement shall be binding upon the Agents and the Company, and inure solely to the benefit of the Agents and the Company and any other
person expressly entitled to indemnification hereunder and the respective personal representatives, successors and assigns of each, and no other person shall acquire or have any rights under or by virtue of this Agreement.
XIII.
This Agreement shall be
governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that would result in the application of any law other than the laws of the State of New York.
XIV.
If this Agreement is
executed by or on behalf of any party, such person hereby states that at the time of the execution of this Agreement he has no notice of revocation of the power of attorney by which he has executed this Agreement as such attorney.
The Company will pay the following expenses incident to the performance of its obligations under this Agreement, including: (i) the
preparation and filing of the Registration Statement; (ii) the preparation, issuance and delivery of the Notes; (iii) all expenses incurred in preparing, printing and distributing each Issuer Free Writing Prospectus, the Prospectus and the
Disclosure Package to investors or prospective investors, (iv) the fees and disbursements of the Company’s auditors, of the Trustees and their counsel and of any paying or other agents appointed by the Company; (v) the printing and
delivery to the Agents in quantities as hereinabove stated of copies of the Registration Statement, each Issuer Free Writing Prospectus and the Prospectus; (vi) the reasonable fees and disbursements of Mayer Brown LLP, counsel for the Agents,
incurred in connection with the establishment of the program; (vii) if the Company lists Notes on a securities exchange, the costs and fees of such listing; (viii) the fees and expenses, if any, including the reasonable fees and
disbursements of Mayer Brown LLP incurred with respect to any filing with the Financial Industry Regulatory Authority, Inc.; (ix) the cost of providing CUSIP or other identification numbers for the Notes; (x) all reasonable expenses
(including fees and disbursements of Mayer Brown LLP) in connection with “Blue Sky” qualifications of up to $5,000; and (xi) any fees charged by rating agencies for the rating of the Notes.
XV.
This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Agent referred to in Section IX hereof. Nothing in
this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Notes from any Agent shall be deemed to
be a successor merely by reason of such purchase.
26
XVI.
For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth
in Rule 405 under the 1933 Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth
in Rule 405 under the 1933 Act.
XVII.
No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
This Agreement may be executed by each of the parties
hereto in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but
one and the same instrument. Facsimile signatures shall be deemed original signatures.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]
27
If the foregoing is in accordance with your understanding, please sign and return to us a
counterpart hereof, and upon acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the Company and you.
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Very truly yours,
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Discover Financial Services
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By:
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/s/ Timothy Schmidt
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Name:
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Timothy Schmidt
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Title:
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Assistant Treasurer
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(
Signature page to the
Selling Agent Agreement
)
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Confirmed and accepted
as of the
date first above written:
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INCAPITAL LLC
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By:
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/s/ Brian Walker
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Name:
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Brian Walker
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Title:
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Managing Director
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CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Chandru M. Harjani
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Name:
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Chandru M. Harjani
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Title:
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Director
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MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
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By:
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/s/ Randolph P. Randolph
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Name:
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Randolph P. Randolph
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Title:
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Managing Director
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MORGAN STANLEY & CO. LLC
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By:
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/s/ Yurij Slyz
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Name:
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Yurij Slyz
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Title:
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Executive Director
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(
Signature page to the
Selling Agent Agreement
)
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Confirmed and accepted
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as of the date first above written:
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RBC CAPITAL MARKETS, LLC
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By:
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/s/ Rob Foerster
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Name:
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Rob Foerster
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Title:
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Managing Director
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WELLS FARGO ADVISORS, LLC
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By:
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/s/ Kristin Maher
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Name:
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Kristin Maher
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Title:
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Senior Vice President
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(
Signature page to the
Selling Agent Agreement
)
ANNEX A
Agent Contact Information
Incapital LLC
200 South Wacker Drive
Suite 3700
Chicago, IL 60606
Fax: (312) 379-3701
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Attention: Transaction Execution Group
Telephone: (212) 816-1135
Fax: (646) 291-5209
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
50 Rockefeller Plaza
NY 1-050-12-01
New York, New York 10020
Attention: High Grade Debt Capital
Markets Transaction Management/Legal
Fax: (212) 901-7881
Morgan Stanley & Co. LLC
1585 Broadway, 2nd Floor
New York, New York 10036
Attention: Investment Banking Division
Fax: (212) 507-8999
RBC Capital Markets, LLC
Three World Financial Center
200 Vesey Street
New York, NY 10281-8098
Attention: Adam Molino/Paul Rich
Telephone: (212) 618-3240
Fax: (212) 658-6137
Wells Fargo Advisors, LLC
One North Jefferson 7th Floor
St. Louis, MO 63103
Attention: Julie Pemiciaro - Fixed Income
Desk
Fax: (314) 955-5719
EXHIBIT A
Form of Opinion of Deputy General Counsel
A-1
EXHIBIT B
Form of Opinion of Sidley Austin LLP
B-1
EXHIBIT C
Dealer Agent Program
Unless otherwise
agreed between the Company and the Purchasing Agent for a particular offering of Notes, the following Concessions are payable as a percentage of the non-discounted Price to Public of each note sold to or through the Purchasing Agent:
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9 months to less than 18 months
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0.300
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%
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18 months to less than 24 months
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0.425
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%
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24 months to less than 30 months
|
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0.550
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%
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30 months to less than 42 months
|
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0.825
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%
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42 months to less than 54 months
|
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0.950
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%
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54 months to less than 66 months
|
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1.250
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%
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66 months to less than 78 months
|
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1.350
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%
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78 months to less than 90 months
|
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1.450
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%
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90 months to less than 102 months
|
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1.550
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%
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102 months to less than 114 months
|
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1.650
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%
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114 months to less than 126 months
|
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1.800
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%
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126 months to less than 138 months
|
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1.900
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%
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138 months to less than 150 months
|
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2.000
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%
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150 months to less than 162 months
|
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2.150
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%
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162 months to less than 174 months
|
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2.300
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%
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174 months to less than 186 months
|
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2.500
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%
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186 months to less than 198 months
|
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2.600
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%
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198 months to less than 210 months
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2.700
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%
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210 months to less than 222 months
|
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2.800
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%
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222 months to less than 234 months
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2.900
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%
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234 months to less than 360 months
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3.000
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%
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More than 360 months
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3.150
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%
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C-1
EXHIBIT D
Administrative Procedures
EXHIBIT D
DISCOVER FINANCIAL
SERVICES INTERNOTES
®
DUE FROM 9 MONTHS OR MORE FROM DATE OF ISSUE
ADMINISTRATIVE PROCEDURES
DISCOVER FINANCIAL SERVICES INTERNOTES
®
, due from 9 months or more from date of issue
are to be offered on a continuing basis by Discover Financial Services. The Notes will be offered by Incapital LLC (the “
Purchasing Agent
”), Incapital LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Wells Fargo Advisors, LLC (collectively, the “
Agents
”) pursuant to a Selling Agent Agreement among the Company and the Agents dated as of the date
hereof (the “
Selling Agent Agreement
”) and one or more terms agreements substantially in the form attached to the Selling Agent Agreement as Exhibit E (each a “
Terms Agreement
”). The Notes are being resold by the
Purchasing Agent (and by any Agent that purchases them from the Purchasing Agent) (i) directly to customers of the Agents or (ii) to selected broker-dealers (the “
Selected Dealers
”) for distribution to their customers
pursuant to a Master Selected Dealer Agreement (a “
Dealers Agreement
”) attached to the Selling Agent Agreement as Exhibit G. The Agents have agreed to use their reasonable best efforts to solicit purchases of the Notes. The Notes
may be Senior Notes or Subordinated Notes and have been registered with the Securities and Exchange Commission (the “
SEC
”). The Senior Notes will be issued pursuant to the Senior Indenture, dated as of June 12, 2007 (as amended
or supplemented from time to time, the “
Senior Indenture
”), between the Company and U.S. Bank National Association, as trustee (the “
Senior Trustee
”). The Subordinated Notes will be issued pursuant to the
Subordinated Indenture, dated as of September 8, 2015 (as amended or supplemented from time to time, the “
Subordinated Indenture
”), between the Company and U.S. Bank National Association, as trustee (the “
Subordinated
Trustee
”). The Senior Trustee and the Subordinated Trustee are collectively referred to herein as the “
Trustees
,” and the Senior Indenture and the Subordinated Indenture are collectively referred to herein as the
“
Indentures
.” Pursuant to the terms of the Indentures, U.S. Bank National Association also will serve as authenticating agent, issuing agent and paying agent.
The Notes will bear interest at a fixed rate (which may be zero if the note is issued at a discount from the principal amount due at maturity)
(the “
Fixed-Rate Notes
”) or at a floating rate (the “
Floating-Rate Notes
”). Each tranche of Notes will be issued in book-entry only form (“
Notes
”) and represented by one or more fully registered
global notes without coupons (each, a “
Global Note
”) held by the Trustee, as agent for The Depository Trust Company (“
DTC
”) and recorded in the book-entry system maintained by DTC. Each Global Note will have the
annual interest rate, maturity and other terms set forth in the relevant Pricing Supplement (as defined in the Selling Agent Agreement). Owners of beneficial interests in a Global Note will be entitled to physical delivery of Notes issued in
certificated form equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Indenture.
D-1
Administrative procedures and specific terms of the offering are explained below. Administrative
and record-keeping responsibilities will be handled for the Company by its Treasury Department. The Company will advise the Agents and the Trustee in writing of those persons handling administrative responsibilities with whom the Agents and the
Trustee are to communicate regarding offers to purchase Notes and the details of their delivery.
Notes will be issued in accordance with
the administrative procedures set forth herein. To the extent the procedures set forth below conflict with or omit certain of the provisions of the Notes, the Indenture, the Selling Agent Agreement or the Prospectus and the Pricing Supplement
(together, the “
Prospectus
”), the relevant provisions of the Notes, the Indenture, the Selling Agent Agreement and the Prospectus shall control. Capitalized terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in the Selling Agent Agreement, the Prospectus in the form most recently filed with the SEC pursuant to Rule 424 of the 1933 Act, or in the Indenture.
Administrative Procedures for Notes
In connection with the qualification of Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the
custodial, document control and administrative functions described below, in accordance with its obligations under a Letter of Representations from the Company and the Trustee to DTC, dated September 8, 2015 and a Medium-Term Note Certificate
Agreement between the Trustee and DTC (the “
Certificate Agreement
”) dated January 31, 1991 and its obligations as a participant in DTC. The procedures set forth below may be modified in compliance with DTC’s
then-applicable procedures and upon agreement by the Company, the Trustee and the Purchasing Agent.
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Maturities:
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Each Note will mature on a date (the “
Maturity Date
”) not less than nine months after the date of delivery by the Company of such Note. Notes will mature on any date selected by the initial purchaser and agreed to
by the Company. “
Maturity
” when used with respect to any Note, means the date on which the outstanding principal amount of such Note becomes due and payable in full in accordance with its terms, whether at its Maturity Date or by
declaration of acceleration, call for redemption, repayment or otherwise.
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Issuance
|
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The Notes of each tranche will be represented by a Global Note. The Global Note will be dated and issued as of the date of its authentication by the Trustee.
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Each Global Note will bear an original issue date (the “
Original Issue Date
”). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original
Note regardless of their dates of authentication.
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D-2
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For other variable terms with respect to the Notes, see the Prospectus and the applicable Pricing Supplement.
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Identification Numbers:
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The Company has received from the CUSIP Service Bureau (the “
CUSIP Service Bureau
”) of Standard & Poor’s Corporation (“
Standard & Poor’s
”) one series of CUSIP numbers consisting of
approximately 900 CUSIP numbers for future assignment to Global Notes. The Company will provide the Purchasing Agent, DTC and the Trustee with a list of such CUSIP numbers. On behalf of the Company, the Purchasing Agent will assign CUSIP numbers as
described below under Settlement Procedure “B”. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Global Notes. The Company will reserve additional CUSIP numbers when necessary for
assignment to Global Notes and will provide the Purchasing Agent, the Trustee and DTC with the list of additional CUSIP numbers so obtained.
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Registration:
|
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Unless otherwise specified by DTC, Global Notes will be issued only in fully registered form without coupons. Each Global Note will be registered in the name of Cede & Co., as nominee for DTC, on the Note Register maintained
under the Indenture by the Trustee. The beneficial owner of a Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note, the “
Participants
”)
to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such
beneficial owner of such Note in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or
more indirect participants in DTC.
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Transfers:
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Transfers of interests in a Global Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such interests.
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Exchanges:
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The Trustee, at the Company’s request, may deliver to DTC and the CUSIP Service Bureau at any time a written
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D-3
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notice of consolidation specifying (a) the CUSIP numbers of two or more Global Notes outstanding on such date that represent Notes having the same terms (except that Original Issue Dates need not be the same) and for which interest,
if any, has been paid to the same date and which otherwise constitute Notes of the same series and tenor under the Indenture, (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest
Payment Date, if any, for the related Notes, on which such Global Notes shall be exchanged for a single replacement Global Note; and (c) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Note. Upon receipt of
such a notice, DTC will send to its participants (including the relevant Agent) and the Trustee a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver
to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Notes to be exchanged will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Notes for a single Global Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Global Notes will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Global Notes to be exchanged exceed $500,000,000 in aggregate principal or face amount or any other limit set by DTC (the “
Permitted Amount
”), one replacement Global Note will be
authenticated and issued to represent each Permitted Amount of principal or face amount of the exchanged Global Notes and an additional Global Note will be authenticated and issued to represent any remaining principal amount of such Global Notes
(See “
Denominations
” below).
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Denominations:
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Unless otherwise agreed by the Company, Notes will be issued in denominations of $1,000 or more (in multiples of $1,000). Global Notes will be denominated in principal or face amounts not in excess of the Permitted Amount. If one or
more Notes having an aggregate principal or face amount in excess of the Permitted Amount would, but for the preceding sentence, be represented by a single Global Note, then one Global Note will be issued to represent each Permitted Amount of
principal or face amount of such Note or Notes and an additional Global Note will be Issued to
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D-4
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represent any remaining principal amount of such Note or Notes. In such case, each of the Global Notes representing such Note or Notes shall be assigned the same CUSIP number.
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Issue Price:
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Unless otherwise specified in an applicable Pricing Supplement, each Note will be issued at the percentage of principal amount specified in the Prospectus relating to such Note.
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Interest:
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GENERAL. Each Note will bear interest in accordance with its terms. Interest on each Note will accrue from the Original Issue Date of such
Note for the first interest period and from the most recent Interest Payment Date to which interest has been paid for all subsequent interest periods.
Each pending deposit message described under Settlement Procedure “C” below will be routed to Standard & Poor’s Corporation, which will use
the message to include certain information regarding the related Notes in the appropriate daily bond report published by Standard & Poor’s Corporation.
Each Note will bear interest from, and including, its Original Issue Date at the rate or in accordance with the interest rate formula set forth thereon and in
the applicable Pricing Disclosure Material and Pricing Supplement until the principal amount thereof is paid, or made available for payment, in full, in accordance with the terms of such Note. Unless otherwise specified in the applicable Pricing
Supplement, interest on each Note will be payable either monthly, quarterly, semi-annually or annually on each Interest Payment Date and at Maturity (or on the date of redemption or repayment if a Note is repurchased by the Company prior to maturity
pursuant to mandatory or optional redemption or repayment provisions or in connection with the exercise of the Survivor’s Option). Interest will be payable to the person in whose name a Note is registered at the close of business on the Regular
Record Date next preceding each Interest Payment Date; provided, however, interest payable at Maturity, on a date of redemption or repayment or in connection with the exercise of the Survivor’s Option will be payable to the person to whom
principal shall be payable.
Except as set forth hereafter, each payment of interest on
a Note will include interest accrued to, but excluding, as the
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D-5
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case may be, the Interest Payment Date or the date of Maturity. Any payment of principal, and premium, if any, or interest required to be
made on a Fixed-Rate Note on a day which is not a Business Day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such day, and no additional interest shall accrue as a
result of any such delayed payment. If any Interest Payment Date for a Floating-Rate Note (other than an Interest Payment Date that falls on the date of Maturity) would otherwise be a day that is not a Business Day, then the Interest Payment Date
will be postponed to the following day which is a Business Day, except that in the case of a Floating-Rate Note that is a LIBOR Note, if this Business Day falls in the next succeeding calendar month, then the Interest Payment Date will be the
immediately preceding Business Day. If the date of Maturity of a Floating-Rate Note falls on a day that is not a Business Day, the required payment of principal and any premium or interest need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such day and no additional interest will accrue as a result of such delay in payment. In the case of a Note issued between a Regular Record Date and an Interest Payment Date, the
first interest payment will be made on the Interest Payment Date following the next succeeding Regular Record Date. The interest rates the Company will agree to pay on newly-issued Notes are subject to change without notice by the Company from time
to time, but no such change will affect any Notes already issued or as to which an offer to purchase has been accepted by the Company.
Unless otherwise specified in the applicable Pricing Supplement, the Interest Payment Dates for Fixed-Rate Notes will be as follows: (a) for monthly interest
payments, the fifteenth day of each calendar month, commencing in the calendar month that next succeeds the month in which the Fixed-Rate Note is issued; (b) for quarterly interest payments, the fifteenth day of each third month, commencing in the
third succeeding calendar month following the month in which the Fixed-Rate Note is issued; (c) for semi-annual interest payments, the fifteenth day of each sixth month, commencing in the sixth succeeding calendar month following the month in which
the Fixed-Rate Note is issued; and (d) for annual interest payments, the fifteenth day of every twelfth month, commencing in the twelfth succeeding calendar month following the month in which the Fixed-Rate Note is
issued.
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D-6
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Unless otherwise agreed upon, interest will be payable, in the case of Floating-Rate Notes with a daily, weekly or monthly Interest Reset Date, on a date that occurs in each month, as specified in the applicable Pricing Supplement;
in the case of Notes with a quarterly Interest Reset Date, on a date that occurs in each third month, as specified in the applicable Pricing Supplement; in the case of Notes with a semi-annual Interest Reset Date, on a date that occurs in each of
two months of each year, as specified in the applicable Pricing Supplement; and in the case of Notes with an annual Interest Reset Date, on a date that occurs in one month of each year, as specified in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the Regular Record Date with respect to any Interest Payment Date for a Fixed-Rate Note shall be the fifteenth calendar day immediately preceding such Interest Payment
Date occurred (whether or not a Business Day), except that the Regular Record Date with respect to the final Interest Payment Date shall be the final Interest Payment Date. Unless otherwise specified in the applicable Pricing Supplement, the Regular
Record Date with respect to any Interest Payment Date for a Floating–Rate Note shall be the fifteenth calendar day immediately preceding such Interest Payment Date, whether or not such day is a Business Day, except that the Regular Record Date
with respect to the final Interest Payment Date shall be the final Interest Payment Date.
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Calculation of Interest:
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Fixed-Rate Notes
: Unless otherwise specified in the applicable Pricing Supplement, interest on the Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months.
(Examples of interest calculations are as follows: October 1, 2014 to April 1, 2015 equals 6 months and 0 days, or 180 days; the interest paid equals 180/360 times the annual rate of interest times the principal amount of the Note. The period from
December 3, 2014 to April 1, 2015 equals 3 months and 28 days, or 118 days; the interest payable equals 118/360 times the annual rate of interest times the principal amount of the Note.)
|
D-7
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Floating-Rate Notes:
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The interest rate on each Floating–Rate Note will be calculated by reference to the specified interest rate basis or formula, plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any, as set
forth in the applicable Pricing Disclosure Material or Pricing Supplement. The “Spread” is the number of basis points specified by the Company on the Floating–Rate Note to be added to or subtracted from the base rate. The “Spread
Multiplier” is the percentage specified by the Company on the Floating–Rate Note by which the base rate is multiplied in order to calculate the applicable interest rate.
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Accrued interest on Floating–Rate Notes is calculated by multiplying the principal amount of a Floating–Rate Note by an accrued interest factor. This accrued interest factor is the sum of the interest factors
calculated for each day in the period for which accrued interest is being calculated. Unless otherwise indicated in the applicable Pricing Supplement, the accrued interest factor will be computed and interest will be paid (including payments for
partial periods) as follows:
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(a)
|
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for Floating–Rate Notes based on the federal funds rate, LIBOR, the prime rate, or any other floating rate other than the treasury rate, the daily interest factor will be computed by dividing the interest rate in effect on that
day by 360; and
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(b)
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for Floating–Rate Notes based on the treasury rate, the daily interest factor will be computed by dividing the interest rate in effect on that day by 365 or 366, as applicable.
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All dollar amounts used in or resulting from any calculation on Floating–Rate Notes will be rounded to the nearest cent with one–half cent being rounded upward. Unless otherwise specified in the applicable
Pricing Supplement, all percentages resulting from any calculation with respect to a Floating–Rate Note will be rounded, if necessary, to the nearest one hundred–thousandth of a percent, with five one–millionths of a percentage point
rounded upwards, e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655).
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Business Day:
|
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“
Business Day
” means, unless otherwise specified in the applicable Pricing Supplement, any weekday that is (1) not a day on which banking institutions in New York, New
|
D-8
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York are authorized or required by law or regulation to be closed and (2) with respect to a Floating-Rate Note based on LIBOR, a London Banking Day. A “
London Banking Day
” means any day in which commercial banks are
open for business (including dealings in U.S. dollars) in London, England.
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Payments of Principal and Interest:
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PAYMENTS OF PRINCIPAL AND INTEREST. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest, if any, to be paid on each Global Note
on the following Interest Payment Date (other than an Interest Payment Date coinciding with a Maturity Date), if then known, and the total of such amounts. DTC will confirm the amount payable on each Global Note on such Interest Payment Date by
reference to the daily bond reports published by Standard & Poor’s. On such Interest Payment Date, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, such total amount of interest due (other than on the Maturity
Date), at the times and in the manner set forth below under “
Manner of Payment
.” If any Interest Payment Date for a Floating-Rate Note (other than an Interest Payment Date that falls on the date of Maturity) would otherwise be a day
that is not a Business Day, then the Interest Payment Date will be postponed to the following day which is a Business Day, except that in the case of a Floating-Rate Note that is a LIBOR Note, if this Business Day falls in the next succeeding
calendar month, then the Interest Payment Date will be the immediately preceding Business Day.
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PAYMENTS ON THE MATURITY DATE. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal, premium, if any, and interest, if then known, to be paid on each Global
Note representing Notes maturing or subject to redemption (pursuant to a sinking fund or otherwise) or repayment (“
Maturity
”) in the following month. The Trustee, the Company and DTC will confirm the amounts of such principal,
premium, if any, and interest payments with respect to each Global Note on or about the fifth Business Day preceding the Maturity Date of such Global Note. On the Maturity Date, the Company will pay to the Trustee, and the Trustee in turn will pay
to DTC, the principal amount of such Global Note, together with interest and premium, if any, due on such Maturity Date, at the times and in the manner set forth below under
“
Manner
|
D-9
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of Payment
.” If the date of Maturity of a Floating-Rate Note falls on a day that is not a Business Day, the required payment of principal and any premium or interest need not be made on such day, but may be made on the
next succeeding Business Day with the same force and effect as if made on such day and no additional interest will accrue as a result of such delay in payment. Promptly after payment to DTC of the principal and interest due on the Maturity Date of
such Global Note and all other Notes represented by such Global Note, the Trustee will cancel and dispose of such Global Note in accordance with the Indenture and so advise the Company.
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MANNER OF PAYMENT. The total amount of any principal, premium, if any, and interest due on Global Notes on any Interest Payment Date or at Maturity shall be paid by the Company to the Trustee in immediately available funds on such
date. The Company will make such payment on such Global Notes to an account specified by the Trustee. Prior to 10:00 a.m., New York City time, on the date of Maturity or as soon as practicable thereafter, the Trustee will make payment to DTC in
accordance with existing arrangements between DTC and the Trustee, in funds available for immediate use by DTC, each payment of interest, principal and premium, if any, due on a Global Note on such date. On each Interest Payment Date (other than on
the Maturity Date) the Trustee will pay DTC such interest payments in accordance with existing arrangements between the Trustee and DTC. Thereafter, on each such date, DTC will pay, in accordance with its operating procedures then in effect, such
amounts in funds available for immediate use to the respective Participants with payments in amounts proportionate to their respective holdings in principal amount of beneficial interest in such Global Note as are recorded in the book-entry system
maintained by DTC. Neither the Company nor the Trustee shall have any direct responsibility or liability for the payment by DTC of the principal of, or premium, if any, or interest on, the Notes to such Participants.
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WITHHOLDING TAXES. The amount of any taxes required under applicable law to be withheld from any interest payment on a Note will be determined and withheld by the Participant, indirect participant in DTC or other person responsible
for forwarding payments and materials directly to the beneficial owner of such Note.
|
D-10
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Procedure for Rate Setting and Posting:
|
|
The Company and the Agents will discuss, from time to time, the aggregate principal amounts of, the Maturities, the Issue Price and the interest rates to be borne by Notes that may be sold as a result of the solicitation of orders
by the Agents. If the Company decides to set interest rates borne by any Notes in respect of which the Agents are to solicit orders (the setting of such interest rates to be referred to herein as “
Posting
”) or if the Company decides
to change interest rates previously posted by it, it will promptly advise the Agents of the prices and interest rates to be posted.
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The Purchasing Agent will assign a separate CUSIP number for each tranche of Notes to be posted, and will so advise and notify the Company and the Trustee of said assignment by telecopier or other form of electronic transmission.
The Purchasing Agent will include the assigned CUSIP number on all Posting notices communicated to the Agents and Selected Dealers. Offering of Notes: In the event that there is a Posting, the Purchasing Agent will communicate to each of the Agents
and Selected Dealers the aggregate principal amount and Maturities of, along with the interest rates to be borne by, each tranche of Notes that is the subject of the Posting. Thereafter, the Purchasing Agent, along with the other Agents and the
Selected Dealers, will solicit offers to purchase the Notes accordingly.
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Purchase of Notes by The Purchasing Agent:
|
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The Purchasing Agent will, no later than 12:00 noon (New York City time) on the seventh day subsequent to the day on which such Posting occurs, or if such seventh day is not a Business Day on the preceding Business Day, or on such
other Business Day and time as shall be mutually agreed upon by the Company and the Agents (any such day, a “
Trade Day
”), (i) complete, execute and deliver to the Company a Terms Agreement that sets forth, among other things, the
amount of each tranche that the Purchasing Agent is offering to purchase or (ii) inform the Company that none of the Notes of a particular tranche will be purchased by the Purchasing Agent.
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Acceptance and Rejection of Orders:
|
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Unless otherwise agreed by the Company and the Agents, the Company has the sole right to accept orders to purchase Notes and may reject any such order in whole or in part.
|
D-11
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Unless otherwise instructed by the Company, the Purchasing Agent will promptly advise the Company by telephone of all offers to purchase Notes received by it, other than those rejected by it in whole or in part in the reasonable
exercise of its discretion. No order for less than $1,000 principal amount of Notes will be accepted.
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Upon receipt of a completed and executed Terms Agreement from the Purchasing Agent, the Company will (i) promptly execute and return such Terms Agreement to the Purchasing Agent or (ii) inform the Purchasing Agent that its
offer to purchase the Notes of a particular tranche has been rejected, in whole or in part. The Purchasing Agent will thereafter promptly inform the other Agents and participating Selected Dealers of the action taken by the Company.
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Preparation of Pricing Supplement:
|
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If any offer to purchase a Note is accepted by or on behalf of the Company, the Company will provide a Pricing Supplement (substantially in the form attached to the Selling Agent Agreement as Exhibit F) reflecting the terms of such
Note and will have filed such Pricing Supplement with the SEC in accordance with the applicable paragraph of Rule 424(b) under the Act. The Company shall use its reasonable best efforts to send such Pricing Supplement by email or telecopy to the
Purchasing Agent and the Trustee by 3:00 p.m. (New York City Time) on the applicable Trade Day. The Purchasing Agent shall use its reasonable best efforts to send such Pricing Supplement and the Prospectus by email or telecopy or overnight express
(for delivery by the close of business on the applicable Trade Day, but in no event later than 11:00 a.m. New York City time, on the Business Day following the applicable Trade Date) to each Agent (or other Selected Dealer) which made or presented
the offer to purchase the applicable Note and the Trustee at the following applicable address:
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IF TO INCAPITAL LLC, TO:
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200 South Wacker Drive, Suite 3700
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Chicago, Illinois 60606
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Telephone: (312) 379-3700
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Telecopier: (312) 379-3701
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IF TO CITIGROUP GLOBAL MARKETS INC., TO:
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388 Greenwich Street
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New York, New York 10013
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Telephone: (212) 816-1135
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Telecopier: (646) 291-5209
|
D-12
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IF TO MERRILL LYNCH, PIERCE, FENNER & SMITH
|
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INCORPORATED, TO:
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50 Rockefeller Plaza
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NY 1-050-12-01
|
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|
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New York, New York 10020
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|
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Attention: High Grade Debt Capital Markets Transaction
Management/Legal
|
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Telecopier: (212) 901-7881
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IF TO Morgan Stanley & Co. LLC, TO:
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1585 Broadway, 2nd Floor
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New York, New York 10036
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Attention: Investment Banking Division
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Telecopier: (212) 507-8999
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IF TO RBC Capital Markets, LLC, TO:
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200 Vesey Street
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New York, NY 10281-8098
|
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Attention: Adam Molino/Paul Rich
|
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Telephone: (212) 618-3240
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Telecopier: (212) 658-6137
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IF TO Wells Fargo Advisors, LLC, TO:
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One North Jefferson 7th Floor
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St. Louis, MO 63103
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Attention: Julie Pemiciaro - Fixed Income Desk
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Telecopier: (314) 955-5719
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AND IF TO EITHER TRUSTEE, TO:
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U.S. Bank National Association
100 Wall Street
– Suite 1600
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New York, New York 10005
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Attention: Corporate Trust Services
|
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Telephone: 212-951-8508
|
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Email:
mmi.processing@usbank.com
|
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Email:
wendy.kumar@usbank.com
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Each such Agent (or Selected Dealer), in turn, pursuant to the terms of the Selling Agent Agreement and the Master Selected Dealer Agreement, will deliver to the purchaser a notice of availability (pursuant to Rule 172 of the 1933
Act) or cause to be delivered a copy of the Prospectus and the applicable Pricing Supplement to each purchaser of Notes from such Agent or Selected Dealer.
|
D-13
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Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files) will be destroyed.
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Delivery of Confirmation and Prospectus to Purchaser by Presenting Agent:
|
|
Subject to “
Suspension of Solicitation; Amendment or
Supplement
” below, the Agents will deliver to the purchaser a notice of availability (pursuant to Rule 172 of the 1933 Act) or deliver a Prospectus and Pricing Supplement as herein described with respect to each Note sold by
it.
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For each offer to purchase a Note accepted by or on behalf of the Company, the Purchasing Agent will confirm in writing with each Agent or Selected Dealer the terms of such Note, the amount being purchased by such Agent or Selected
Dealer and other applicable details described above and delivery and payment instructions, with a copy to the Company. In addition, the Purchasing Agent, other Agent or Selected Dealer, as the case may be, will deliver to the purchaser a notice of
availability (pursuant to Rule 172 of the 1933 Act) or deliver to investors purchasing the Notes the Prospectus (including the Pricing Supplement) in relation to such Notes prior to or simultaneously with delivery of the confirmation of sale or
delivery of the Note.
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Settlement:
|
|
The receipt of immediately available funds by the Company in payment for Notes and the authentication and issuance of the Global Note representing such Notes shall constitute “
Settlement
” with respect to such Note.
All orders accepted by the Company will be settled within one to three Business Days pursuant to the timetable for Settlement set forth below, unless the Company and the purchaser agree to Settlement on a later date, and shall be specified upon
acceptance of such offer; provided, however, in all cases the Company will notify the Trustee on the date issuance instructions are given.
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Settlement Procedures:
|
|
In the event of a purchase of Notes by any Agent, as agent, appropriate Settlement details, if different from those set forth below, will be set forth in the applicable Terms Agreement to be entered into between such Agent and
the
|
D-14
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Company pursuant to the Selling Agent Agreement. Settlement Procedures with regard to each Note sold by an Agent, as principal for the Company, shall be as follows:
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A.
|
|
After the acceptance of an offer by the Company with respect to a Note, the Purchasing Agent will communicate the following details of the terms of such offer (the “
Note Sale Information
”) to the Company
by telephone confirmed in writing or by facsimile transmission or other acceptable written means:
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1.
|
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Principal amount of the purchase;
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2.
|
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Whether the Note is a Fixed–Rate Note or a Floating–Rate Note.
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(a)
|
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Fixed–Rate Notes:
|
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(i)
|
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Interest Rate,
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(ii)
|
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Interest Payment Dates, and
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(iii)
|
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Regular Record Dates.
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(b)
|
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Floating–Rate Notes:
|
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(i)
|
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Base Rate or Rates,
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|
(ii)
|
|
Initial Interest Rate,
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(iii)
|
|
Spread and/or Spread Multiplier, if any,
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(iv)
|
|
Interest Reset Date or Dates,
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(v)
|
|
Interest Reset Period,
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(vi)
|
|
Interest Payment Dates,
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(vii)
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|
Regular Record Dates,
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(viii)
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Index Maturity
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(ix)
|
|
Maximum and Minimum Interest Rates, if any, and
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(x)
|
|
Calculation Agent.
|
D-15
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(c)
|
|
Floating-Rate Notes for which the amount of principal, premium, if any, interest or other amounts payable, if any, is determined by reference, either directly or indirectly, to the price, performance or levels of one or
more securities, currencies or composite currencies, commodities, interest rates, inflation rates, stock indices or other indices or formulae:
|
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(i)
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|
Base Rate(s),
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(ii)
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Initial Reset Dates,
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(iii)
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|
Spread and/or Spread Multiplier, if any,
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(iv)
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Underlying index, credit or formula,
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(v)
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Interest (or Other Amounts Payable) Reset Dates(s),
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(vi)
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Interest (or Other Amounts Payable) Reset Period,
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(vii)
|
|
Interest (or Other Amounts Payable) Payment Dates(s),
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(viii)
|
|
Regular Record Dates, if any,
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(ix)
|
|
Maximum and Minimum Interest Rates, if any,
|
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(x)
|
|
Calculation Agent, and
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(xi)
|
|
Whether the Notes will be convertible or exchangeable and, if so, the terms of such conversion or exchange;
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|
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|
|
3.
|
|
Interest Payment Frequency;
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4.
|
|
Settlement Date;
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5.
|
|
Maturity Date;
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6.
|
|
Price to Public;
|
D-16
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7.
|
|
Purchasing Agent’s commission determined pursuant to Section IV(a) of the Selling Agent Agreement;
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8.
|
|
Net proceeds to the Company;
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9.
|
|
Trade Date;
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10.
|
|
If a Note is redeemable by the Company or repayable by the Noteholder, such of the following as are applicable:
|
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|
|
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|
|
(i)
|
|
The date on and after which such Note may be redeemed/repaid (the “
Redemption/Repayment Commencement Date
”),
|
|
|
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|
|
(ii)
|
|
Initial redemption/repayment price (% of par), and (iii) Amount (% of par) that the initial redemption/repayment price shall decline (but not below par) on each anniversary of the Redemption/Repayment Commencement Date;
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|
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|
11.
|
|
Whether the Note has a Survivor’s Option;
|
|
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|
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|
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|
|
12.
|
|
DTC Participant Number of the institution through which the customer will hold the beneficial interest in the Global Note; and
|
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|
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|
|
|
|
13.
|
|
Such other terms as are necessary to complete the applicable form of Note.
|
|
|
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|
|
B.
|
|
The Company will confirm the previously assigned CUSIP number to the Global Note representing such Note and then advise the Trustee and the Purchasing Agent by telephone, or by telecopier or other form of electronic
transmission (confirmed in writing at anytime on the same date) of the information received in accordance with Settlement Procedure “A” above, the assigned CUSIP number and the name of the Purchasing Agent. Each such communication by the
Company will be deemed to constitute a representation and warranty by the Company to the Trustee and the Agents that (i) such Note is then, and at the time of issuance and sale
|
D-17
|
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|
|
thereof will be, duly authorized for issuance and sale by the Company; (ii) such Note, and the Global Note representing such Note, will conform with the terms of the Indenture; and (iii) upon authentication and delivery
of the Global Note representing such Note, the aggregate principal amount of all Notes issued under the Indenture will not exceed the aggregate principal amount of Notes authorized for issuance at such time by the Company.
|
|
|
|
|
|
|
|
C.
|
|
The Trustee will communicate to DTC and the Purchasing Agent through DTC’s Participant Terminal System, a pending deposit message specifying the following Settlement information:
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
The information received in accordance with Settlement Procedure “A”.
|
|
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|
|
2.
|
|
The numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Purchasing Agent.
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
The initial Interest Payment Date for such Note, number of days by which such date succeeds the related DTC record date (which
term means the Regular Record Date) (or, in the case of Floating-Rate Notes, which reset daily or weekly, the date five calendar days preceding the Interest Payment Date), and if then calculated, the amount of interest payable on such Initial
Interest Payment Date (which amount shall have been confirmed by the Trustee, as calculation agent and paying agent).
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
The CUSIP number of the Global Note representing such Notes.
|
|
|
|
|
|
|
|
|
|
|
5.
|
|
The frequency of interest.
|
|
|
|
|
|
|
|
|
|
|
6.
|
|
Whether such Global Note represents any other Notes issued or to be issued (to the extent then known).
|
|
|
|
|
|
|
|
D.
|
|
DTC will credit such Note to the participant account of the Trustee maintained by DTC.
|
D-18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E.
|
|
The Trustee will complete and deliver a Global Note representing such Note in a form that has been approved by the Company, the Agents and the Trustee.
|
|
|
|
|
|
|
|
F.
|
|
The Trustee will authenticate the Global Note representing such Note and maintain possession of such Global Note.
|
|
|
|
|
|
|
|
G.
|
|
The Trustee will enter deliver orders through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Trustee’s participant account and credit such Note to the participant account of the
Purchasing Agent maintained by DTC and (ii) debit the settlement account of the Purchasing Agent and credit the settlement account of the Trustee maintained by DTC, in an amount equal to the price of such Note less the Purchasing Agent’s
commission. The entry of such a deliver order shall be deemed to constitute a representation and warranty by the Trustee to DTC that (a) the Global Note representing such Note has been issued and authenticated and (b) the Trustee is holding such
Global Note pursuant to the Certificate Agreement.
|
|
|
|
|
|
|
|
H.
|
|
The Purchasing Agent will enter deliver orders through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Purchasing Agent’s participant account and credit such Note to the
participant accounts of the Participants to whom such Note is to be credited maintained by DTC and (ii) debit the settlement accounts of such Participants and credit the settlement account of the Purchasing Agent maintained by DTC, in an amount
equal to the price of the Note less the agreed upon commission so credited to their accounts.
|
|
|
|
|
|
|
|
I.
|
|
Transfers of funds in accordance with deliver orders described in Settlement Procedures “G” and “H” will be settled in accordance with operating procedures in effect on the Settlement Date.
|
|
|
|
|
|
|
|
J.
|
|
The Trustee will credit to an account of the Company maintained at U.S. Bank National Association funds available for immediate use in an amount equal to the amount credited to the Trustee’s DTC participant account
in accordance with Settlement Procedure “G”.
|
D-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K.
|
|
Each Agent and Selected Dealer will confirm the purchase of each Note to the purchaser thereof either by transmitting to the
Participant to whose account such Note has been credited a confirmation order through DTC’s Participant Terminal System or by mailing a written confirmation to such purchaser. In all cases the Prospectus as most recently amended or supplemented
must accompany or precede such confirmation.
|
|
|
|
|
Settlement Procedures Timetable:
|
|
In the event of a purchase of Notes by the Purchasing Agent, as principal, appropriate Settlement details, if different from those set forth below will be set forth in the applicable Terms Agreement to be entered into
between the Purchasing Agent and the Company pursuant to the Selling Agent Agreement.
|
|
|
|
|
|
|
Settlement Procedures “A” through “K” shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:
|
|
|
|
|
|
|
PROCEDURE TIME
|
|
|
|
|
|
|
A 4:00 p.m. on the Trade Day.
|
|
|
|
|
|
|
B 5:00 p.m. on the Trade Day.
|
|
|
|
|
|
|
C 2:00 p.m. on the Business Day before the Settlement Date.
|
|
|
|
|
|
|
D 10:00 a.m. on the Settlement Date.
|
|
|
|
|
|
|
E 12:00 p.m. on the Settlement Date.
|
|
|
|
|
|
|
F 12:30 a.m. on the Settlement Date.
|
|
|
|
|
|
|
G-H 2:00 p.m. on the Settlement Date.
|
|
|
|
|
|
|
I 4:45 p.m. on the Settlement Date.
|
|
|
|
|
|
|
J-K 5:00 p.m. on the Settlement Date.
|
D-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: The Prospectus as most recently amended or supplemented must accompany or precede any written confirmation given to the customer (Settlement Procedure “K”). Settlement Procedure “I” is subject
to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the operating procedures in effect on the Settlement Date.
|
|
|
|
|
|
|
|
|
|
|
|
|
If Settlement of a Note is rescheduled or cancelled, the Trustee will deliver to DTC, through DTC’s Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m., New York City time,
on the Business Day immediately preceding the scheduled Settlement Date.
|
|
|
|
|
|
|
Failure to Settle:
|
|
|
|
|
|
If the Trustee fails to enter deliver orders with respect to a Note pursuant to Settlement Procedure “G”, the Trustee may deliver to DTC, through DTC’s Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Note to the participant account of the Trustee maintained at DTC. DTC will process the withdrawal message,
provided
that such participant account contains Notes having the same terms and having
a principal amount that is at least equal to the principal amount of such Note to be debited. If withdrawal messages are processed with respect to all the Notes issued or to be issued represented by a Global Note, the Trustee will cancel such Global
Note in accordance with the Indenture, make appropriate entries in its records and so advise the Company. The CUSIP number assigned to such Global Note shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately
reassigned. If withdrawal messages are processed with respect to one or more, but not all, of the Notes represented by a Global Note, the Trustee will exchange such Global Note for two Global Notes, one of which shall represent such Notes and shall
be cancelled immediately after issuance, and the other of which shall represent the remaining 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
Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn,
the
|
D-21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related Agent may enter deliver orders through DTC’s participant Terminal System reversing the orders entered pursuant to Settlement Procedures “G” and “H”, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereafter, the Trustee will 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 Agent in the
performance of its obligations hereunder or under the Selling Agent Agreement, the Company will reimburse the Agent on an equitable basis for its reasonable out-of-pocket accountable expenses actually incurred and loss of the use of funds during the
period when they were credited to the account of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
Notwithstanding the foregoing, upon any failure to settle with respect to a Note, DTC may take any actions in accordance with its operating procedures then in effect. In the event of a failure to settle with respect to
one or more, but not all, of Notes that were to have been represented by a Global Note, the Trustee will provide, in accordance with Settlement Procedures “E” and “F”, for the authentication and issuance of a Global Note
representing the other Notes to have been represented by such Global Note and will make appropriate entries in its records.
|
|
|
|
|
|
|
Procedure for Rate Changes:
|
|
|
|
|
|
Each time a decision has been reached to change rates, the Company will promptly advise the Agents of the new rates, who will forthwith suspend solicitation of purchases of Notes at the prior rates. The Agents may
telephone the Company with recommendations as to the changed interest rates.
|
|
|
|
|
|
|
Suspension of Solicitation Amendment or Supplement:
|
|
|
|
|
|
Subject to the Company’s representations, warranties and covenants contained in the Selling Agent Agreement, the Company may instruct the Agents to suspend at any time for any period of time or permanently, the
solicitation of orders to purchase Notes. Upon receipt of such instructions (which may be given orally), each Agent will forthwith suspend solicitation until such time as the Company has advised it that solicitation of purchases may be
resumed
|
D-22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agents and the Trustee whether such orders may be
settled and whether copies of the Prospectus as in effect at the time of the suspension may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which
may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered.
|
|
|
|
|
|
|
|
|
|
|
|
|
If the Company decides to amend or supplement the Registration Statement or the Prospectus, it will promptly advise the Agents and furnish the Agents and the Trustee with the proposed amendment or supplement and with
such certificates and opinions as are required, all to the extent required by and in accordance with the terms of the Selling Agent Agreement. Subject to the provisions of the Selling Agent Agreement, the Company may file with the Commission any
supplement to the Prospectus relating to the Notes. The Company will provide the Agents and the Trustee with copies of any such supplement, and confirm to the Agents that such supplement has been filed with the SEC.
|
|
|
|
|
|
|
Trustee Not to Risk Funds:
|
|
|
|
|
|
Nothing herein shall be deemed to require the Trustee to risk or expend its own funds in connection with any payment to the Company, or the Agents or the purchasers, it being understood by all parties that payments made
by the Trustee to either the Company or the Agents shall be made only to the extent that funds are provided to the Trustee for such purpose.
|
|
|
|
|
|
|
Advertising Costs:
|
|
|
|
|
|
The Company shall have the sole right to approve the form and substance of any advertising an Agent may initiate in connection with such Agent’s solicitation to purchase the Notes. The expense of such advertising
will be solely the responsibility of such Agent, unless otherwise agreed to by the Company.
|
D-23
EXHIBIT E
TERMS AGREEMENT
Part I: Form of Terms
Agreement for Fixed-Rate Notes
Discover Financial Services Terms Agreement
XXXX XXXX XXXX
®
, 20
Discover Financial Services
c/o Discover Financial Services
[●]
[●]
The undersigned agrees to purchase the following aggregate principal amount of XXXX XXXX XXXX
®
:
$
The terms of
the XXXX XXXX XXXX
®
shall be as follows:
CUSIP Number:
Notes:
Interest Rate:
Maturity Date:
Price to Public:
Agent’s Concession:
Net Proceeds to Issuer:
Interest Payment Dates:
Settlement Date, Time and Place:
Posting Date:
Trade Date:
Survivor’s Option:
Moody’s Rating:
S & P Rating:
Redemption Info:
Use of Free Writing Prospectus: Y/N
E-1
Applicable Time:
[Any other terms and conditions agreed to by the Purchasing Agent and the Company]
|
|
|
|
|
ACCEPTED
|
|
|
|
DISCOVER FINANCIAL SERVICES
|
|
|
|
|
By:
|
|
|
|
Title:
|
|
|
E-2
Part II: Form of Terms Agreement for Floating-Rate Notes or Indexed Notes
Discover Financial Services Terms Agreement
XXXX XXXX XXXX
®
, 20
Discover Financial Services
c/o Discover Financial Services
[●]
[●]
The undersigned agrees to purchase the following aggregate principal amount of XXXX XXXX XXXX
®
:
$
The terms of
the XXXX XXXX XXXX
®
shall be as follows:
CUSIP Number:
Notes:
Price to Public:
Agent’s Concession:
Net Proceeds to Issuer:
Posting Date:
Trade Date:
Settlement Date, Time and Place:
Maturity Date:
Coupon Type:
Applicable Time:
Interest Rate Basis:
Initial Interest Rate:
Index Maturity:
Spread to Interest Rate Basis:
Interest Payment Dates:
Interest Reset Dates:
Minimum Interest Amount:
Day Count Basis:
Survivor’s Option:
Moody’s Rating:
E-3
S & P Rating:
Redemption Info:
Calculation Agent:
Use of Free Writing Prospectus: Y/N
[Any other
terms and conditions agreed to by the Purchasing Agent and the Company]
|
|
|
|
|
ACCEPTED
|
|
|
|
DISCOVER FINANCIAL SERVICES
|
|
|
|
|
By:
|
|
|
|
Title:
|
|
|
E-4
EXHIBIT F
Part I: Form of Pricing Supplement for Fixed-Rate Notes
|
|
|
|
|
Pricing Supplement Dated:
|
|
Filed under Rule 424(b)(3)
|
|
(To Prospectus Dated June 26, 2015, and
|
|
File No. 333-
|
Prospectus Supplement Dated September 8, 2015)
Pricing Supplement No.
Discover Financial Services
c/o
Discover Financial Services
[●]
[●]
XXXXXXXX XXXX
XXXX XXXX XXXX
®
|
|
|
|
|
|
|
Joint Lead Managers and Lead Agents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUSIP NUMBER
|
|
PRINCIPAL
AMOUNT
|
|
SELLING
PRICE
|
|
GROSS
CONCESSION
|
|
NET
PROCEEDS
|
|
COUPON
RATE
|
|
COUPON
FREQUENCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MATURITY DATE
|
|
FIRST
COUPON
DATE
|
|
FIRST
COUPON
AMOUNT
|
|
SURVIVOR’S
OPTION
|
|
PRODUCT
RANKING
|
|
REDEMPTION
INFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-1
Part II: Form of Pricing Supplement for Floating-Rate Notes
|
|
|
|
|
Pricing Supplement Dated:
|
|
Filed under Rule 424(b)(3)
|
|
(To Prospectus Dated June 26, 2015, and
|
|
File No. 333-
|
Prospectus Supplement Dated September 8, 2015)
Pricing Supplement No.
Discover Financial Services
c/o
Discover Financial Services
[●]
[●]
XXXXXXXX XXXX
XXXX XXXX XXXX
®
|
|
|
|
|
|
|
Joint Lead Managers and Lead Agents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUSIP NUMBER
|
|
PRINCIPAL
AMOUNT
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INDEX MATURITY
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MATURITY
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INITIAL
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FIRST
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INTEREST PAYMENT DATES
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F-2
EXHIBIT G
Master Selected Dealer Agreement
[DATE]
Dear [Customer Name]:
In connection with public offerings of securities after the date hereof for which we are acting as lead agent, as lead or co-manager of an
underwriting syndicate or in connection with unregistered (pursuant to Rule 144A under the Securities Act (as defined below) or otherwise exempt) offerings of securities for which we are acting as lead agent or lead or co-manager or otherwise
involved in the distribution of securities by means of an offering of securities for sale to selected dealers, you may be offered the right as a selected dealer to purchase as principal a portion of such securities.
This will confirm our mutual agreement as to the general terms and conditions applicable to your participation in any such selected dealer
group organized by us as follows.
1.
Applicability of this Agreement
. The terms and conditions of this letter agreement (this
“
Agreement
”) shall be applicable to any offering of securities (“
Securities
”), whether a public offering effected pursuant to a registration statement filed under the Securities Act of 1933, as amended (the
“
Securities Act
”), or an offering exempt from registration thereunder (other than an offering of Securities effected wholly outside the United States of America), in respect of which Incapital LLC (“
Incapital
”),
clearing through RBC Dain Correspondent Services (the “
Account
”) (acting for its own Account or for the account of any underwriting or agent or similar group or syndicate), is responsible for managing or otherwise implementing the
sale (whether by acting as lead agent or manager or by facilitating the re-offer of Securities or otherwise) of the Securities to selected dealers (“
Selected Dealers
”) and has expressly informed you that these terms and conditions
shall be applicable. Any such offering of Securities to you as a Selected Dealer is hereinafter called an “
Offering
.” In the case of any Offering where we are acting for the account of any underwriting or agent or similar group or
syndicate (whether purchasing as principal for resale or soliciting as agent purchases of Securities directly from the issuer) (“
Underwriters
”), the terms and conditions of this Agreement shall be for the benefit of, and binding
upon, such Underwriters, including, in the case of any Offering where we are acting with others as representatives of Underwriters, such other representatives. The use of the defined term Underwriter herein shall be understood to include acting as
agent.
2.
Conditions of Offering; Acceptance and Purchases
. Any Offering: (i) will be subject to delivery of the Securities and their
acceptance by us and any other Underwriters; (ii) may be subject to the approval of all legal matters by counsel and the satisfaction of other closing conditions, and (iii) may be made on the basis of reservation of Securities or an
allotment against subscription. We will advise you by electronic mail, facsimile or other form of Written Communication (as defined below) of the particular method and supplementary terms and
G-1
conditions (including, without limitation, the information as to prices and offering date referred to in Section 3(c) hereof) of any Offering in which you are invited to participate.
“
Written Communication
” may include, in the case of any Offering described in Section 3(a) hereof, Additional Information (as defined below) and, in the case of any Offering described in Section 3(b) hereof, an offering
circular). You agree that if we make electronic delivery of a prospectus or an offering circular or any supplement thereto, we have satisfied our obligation, if any, pursuant to Section 3 hereof to deliver to you a prospectus or an offering
circular or any supplement thereto. To the extent such supplementary terms and conditions are inconsistent with any provision herein, such terms and conditions shall supersede any such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by you with respect to an Offering should be sent to Incapital LLC, 200 South Wacker Drive, Suite 3700, Chicago, Illinois 60606 (Fax: (312) 379-3701). We reserve the right to reject any
acceptance in whole or in part. Unless notified otherwise by us, Securities purchased by you shall be paid for on such date as we shall determine, on one day’s prior notice to you, by electronic transfer in an amount equal to the Public
Offering Price (as hereinafter defined) or, if we shall so advise you, at such Public Offering Price less the Concession (as hereinafter defined), payable in Federal funds to the order of [RBC Dain Correspondent Services] clearing for the account of
Incapital LLC, against delivery of the Securities. If Securities are purchased and paid for at such Public Offering Price, such Concession will be paid after the termination of the provisions of Section 3(c) hereof with respect to such
Securities. Notwithstanding the foregoing, unless notified otherwise by us, payment for and delivery of Securities purchased by you shall be made through the facilities of The Depository Trust Company, if you are a member, unless you have otherwise
notified us prior to the date specified in a Written Communication to you from us or, if you are not a member, settlement may be made through a correspondent who is a member pursuant to instructions which you will send to us prior to such specified
date.
3.
Offering Materials and Arrangements
.
(a)
Registered Offerings
. In the case of any Offering of Securities that are registered under the Securities Act (“
Registered
Offering
”), the following terms shall have the following meanings. The term “
Preliminary Prospectus
” means any preliminary prospectus relating to the Offering or any preliminary prospectus supplement together with a
prospectus relating to the Offering. The term “
Prospectus
” means the prospectus, together with the final prospectus supplement, if any, relating to the Offering filed or to be filed under Rule 424 of the Securities Act. The term
“
free writing prospectus
” has the meaning set forth in Rule 405 under the Securities Act and the term “
Permitted Free Writing Prospectus
” means (i) a free writing prospectus authorized for use by us and the
issuer in connection with the Offering of the Securities that has been or will be filed with the Commission (as defined) in accordance with Rule 433(d) of the Securities Act or (ii) a free writing prospectus containing solely a description of
terms of the Securities that (a) does not reflect the final terms, (b) is exempt from the filing requirement pursuant to Rule 433(d)(5)(i) and (c) is furnished to you for use by Incapital LLC. “
Additional Information
”
means the Preliminary Prospectus together with each Permitted Free Writing Prospectus, if any, delivered to you relating to the Offering of Securities. In connection with any Registered Offering, we will provide to you electronically copies of the
Additional Information and of the Prospectus (other than, in each case, information incorporated by reference therein) for the purposes contemplated by the Securities Act and the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”), and the applicable rules and
G-2
regulations of the Securities and Exchange Commission (the “
Commission
) thereunder and will make available to you such number of copies of the Prospectus as you may reasonably request
as soon as practicable after sufficient copies are made available to us by the issuer of the Securities.
You agree that you will not use,
authorize use of, refer to, or participate in the planning for use of any written communication (as such term is defined in Rule 405 under the Securities Act) concerning the Offering, any issuer of the Securities (including, without limitation, any
free writing prospectus and any information furnished by us and any issuer of Securities but not incorporated by reference into the Preliminary Prospectus or Prospectus), other than (a) any Preliminary Prospectus or Prospectus or (b) any
Permitted Free Writing Prospectus.
You represent and warrant that you are familiar with the rules relating to the distribution of a
Preliminary Prospectus and agree that you will comply therewith. You represent and warrant that you are familiar with Rule 173 under the Securities Act relating to electronic delivery. You agree to make a record of your distribution of each
Preliminary Prospectus and, when furnished with copies of any revised Preliminary Prospectus, you will, upon our request, promptly forward copies thereof to each person to whom you have theretofore distributed a Preliminary Prospectus.
You agree that in purchasing Securities in a Registered Offering you will rely upon no statement whatsoever, written or oral, other than the
statements in the Preliminary Prospectus or final Prospectus delivered to you by us. You will not be authorized by the issuer or other seller of Securities offered pursuant to a prospectus or by any Underwriter to give any information or to make any
representation not contained in the prospectus in connection with the sale of such Securities. You agree that you have not relied, and will not rely, upon advice from us regarding the suitability of any Securities as an investment for you or your
clients. You acknowledge and agree that it is your sole responsibility to ensure that, prior to any distribution, the Securities are suitable for your clients, it is lawful for your clients to purchase the Securities and the clients are capable of
evaluating and have evaluated the risks and merits of an investment in the Securities. You agree not to market the Securities in any manner which is inconsistent with or not on the basis of the materials furnished to you for use in the distribution
and you agree not to use marketing materials other than those that have been approved for use.
(b)
Offerings Pursuant to Offering
Circular
. In the case of any Offering of Securities other than a Registered Offering, which is made pursuant to an offering circular or other disclosure document comparable to a prospectus in a Registered Offering, we will provide to you
electronically copies of each preliminary offering circular, if any, any offering circular supplement and of the final offering circular relating thereto and will make available to you such number of copies of the final offering circular as you may
reasonably request as soon as practicable after sufficient copies are made available to us by the issuer of the Securities. You agree that you will comply with the applicable Federal and state laws, and the applicable rules and regulations of any
regulatory body promulgated thereunder, governing the use and distribution of offering materials by brokers or dealers.
You agree that in
purchasing Securities pursuant to an offering circular you will rely upon no statements whatsoever, written or oral, other than the statements in the preliminary or final offering circular delivered to you by us. You will not be authorized by the
issuer or other
G-3
seller of Securities offered pursuant to an offering circular or by any Underwriter to give any information or to make any representation not contained in the offering circular in connection with
the sale of such Securities. You agree that you have not relied, and will not rely, upon advice from us regarding the suitability of any Securities as an investment for you or your clients. You acknowledge and agree that it is your sole
responsibility to ensure that, prior to any distribution, the Securities are suitable for your clients, it is lawful for your clients to purchase the Securities and the clients are capable of evaluating and have evaluated the risks and merits of an
investment in the Securities. You agree not to market the Securities in any manner which is inconsistent with or not on the basis of the materials furnished to you for use in the distribution and you agree not to use marketing materials other than
those that have been approved for use.
(c)
Offer and Sale to the Public
. With respect to any Offering of Securities, we will
inform you by a Written Communication of the public offering price, the selling concession, the reallowance (if any) to dealers and the time when you may commence selling Securities to the public. After such public offering has commenced, we may
change the public offering price, the selling concession and the reallowance to dealers. The offering price, selling concession and reallowance (if any) to dealers at any time in effect with respect to an Offering are hereinafter referred to,
respectively, as the “Public Offering Price”, the “Concession” and the “Reallowance.” With respect to each Offering of Securities, until the provisions of this Section 3(c) shall be terminated pursuant to
Section 5 hereof, you agree to offer Securities to the public at no more than the Public Offering Price. If so notified by us, you may sell Securities to the public at a lesser negotiated price than the Public Offering Price, but in an amount
not to exceed the “Concession.” If a Reallowance is in effect, a reallowance from the Public Offering Price not in excess of such Reallowance may be allowed as consideration for services rendered in distribution to dealers who are actually
engaged in the investment banking or securities business, who are either (i) members in good standing of the Financial Industry Regulatory Authority (“
FINRA
”) who agree to abide by the applicable rules of FINRA (and its
predecessor, the National Association of Securities Dealers, Inc. (“
NASD
”), as applicable) (see Section 4(a) below) or (ii) foreign banks, dealers or institutions not eligible for membership in FINRA that represent to you
that they will promptly reoffer such Securities at the Public Offering Price and will abide by the conditions with respect to foreign banks, dealers and institutions set forth in Section 4(a) hereof.
(d)
Over-allotment; Stabilization; Unsold Allotments
. We may, with respect to any Offering, be authorized to over-allot in arranging
sales to Selected Dealers, to purchase and sell Securities for long or short account and to stabilize or maintain the market price of the Securities. You agree that, upon our request at any time and from time to time prior to the termination of the
provisions of Section 3(c) hereof with respect to any Offering, you will report to us the amount of Securities purchased by you pursuant to such Offering which then remain unsold by you and will, upon our request at any such time, sell to us
for our account or the account of one or more Underwriters such amount of such unsold Securities as we may designate at the Public Offering Price less an amount to be determined by us not in excess of the Concession. If, prior to the later of
(i) the termination of the provisions of Section 3(c) hereof with respect to any Offering or (ii) the covering by us of any short position created by us in connection with such Offering for our account or the account of one or more
Underwriters, we purchase or contract to purchase for our account or the account of one or more Underwriters in the open market or otherwise any Securities purchased by you under this Agreement as part of such Offering, you agree to pay us
G-4
on demand an amount equal to the Concession with respect to such Securities (unless you shall have purchased such Securities pursuant to Section 2 hereof at the Public Offering Price in
which case we shall not be obligated to pay such Concession to you pursuant to Section 2 plus transfer taxes and broker’s commissions or dealer’s mark-up, if any, paid in connection with such purchase or contract to purchase.
4.
Representations, Warranties and Agreements
.
(a)
FINRA
. You represent and warrant that you are actually engaged in the investment banking or securities business. In addition, you
further represent and warrant that you are either (i) a member in good standing of the FINRA, (ii) a foreign bank, dealer or institution not eligible for membership in the FINRA which agrees to make no sales within the United States, its
territories or its possessions or to persons who are citizens thereof or residents therein, and in making other sales to comply with the FINRA’s interpretation with respect to free riding and withholding, or (iii), solely in connection with an
Exempted or Municipal Securities Offering, a bank, as defined in Section 3(a)(6) of the Exchange Act, that does not otherwise fall within provision (i) or (ii) of this sentence (a “
Bank
”). You agree to notify us
immediately if any of the following happens: you cease to be authorized or licensed by any authority in any relevant jurisdiction to offer Securities; you change your legal status (for example, from a corporation to a partnership or limited
liability company); or you become aware that you may be in violation of any regulations applicable to the distribution of the Securities. You further represent, by your participation in an Offering, that you have provided to us all documents and
other information required to be filed with respect to you, any related person or any person associated with you or any such related person pursuant to the supplementary requirements of the FINRA’s interpretation with respect to review of
corporate financing as such requirements relate to such Offering.
You agree that, in connection with any purchase or sale of the
Securities wherein a Concession, discount or other allowance is received or granted, (1) you will comply with the provisions of FINRA Rule 5141, subject to the provisions of FINRA Rule 5130, and (2) if you are a non-FINRA member broker or
dealer in a foreign country, you will also comply (a), as though you were a FINRA member, with the provisions of FINRA Rule 5141, subject to the provisions of FINRA Rule 5130, and (b) with NASD Rule 2420 (and any successor FINRA Rule) as that
section applies to a non-FINRA member broker or dealer in a foreign country.
You further agree that, in connection with any purchase of
securities from us that is not otherwise covered by the terms of this Agreement (whether we are acting as manager, as a member of an underwriting syndicate or a selling group or otherwise), if a selling Concession, discount or other allowance is
granted to you, clauses (1) and (2) of the preceding paragraph will be applicable.
You further represent and warrant to us at
all times that you have obtained all required licenses and authorizations to legally carry out the activities contemplated by this Agreement in each jurisdiction where you are carrying out such activities.
(b)
Relationship Among Underwriters and Selected Dealers
. We may buy Securities from or sell Securities to any Underwriter or Selected
Dealer and, without consent, the
G-5
Underwriters (if any) and the Selected Dealers may purchase Securities from and sell Securities to each other at the Public Offering Price less all or any part of the Concession. Unless otherwise
specified in a separate agreement between you and us, this agreement does not authorize you to act as agent for: (i) us; (ii) any Underwriter; (iii) the issuer; or (iv) other seller of any Securities in offering Securities to the
public or otherwise. Neither we nor any Underwriter shall be under any obligation to you except for obligations assumed hereby or in any Written Communication from us in connection with any Offering. Nothing contained herein or in any Written
Communication from us shall constitute the Selected Dealers an association or partners with us or any Underwriter or with one another. If the Selected Dealers, among themselves or with the Underwriters, should be deemed to constitute a partnership
for Federal income tax purposes, then you elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as amended, and agree not to take any position inconsistent with that election. You
authorize us, in our discretion, to execute and file on your behalf such evidence of that election as may be required by the Internal Revenue Service. In connection with any Offering, you shall be liable for your proportionate amount of any tax,
claim, demand or liability that may be asserted against you alone or against one or more Selected Dealers participating in such Offering, or against us or the Underwriters, based upon the claim that the Selected Dealers, or any of them, constitute
an association, an unincorporated business or other entity, including, in each case, your proportionate amount of any expense incurred in defending against any such tax, claim, demand or liability.
(c)
Role of Incapital; Legal Responsibility
. Incapital is acting as representative of each of the Underwriters in all matters connected
with the Offering of the Securities and with the Underwriters’ purchases (or solicitation for purchase) of the Securities. The rights and liabilities of each Underwriter of Securities and each Selected Dealer shall be several and not joint.
Incapital, as such, shall have full authority to take such action as it deems advisable in all matters pertaining to the Offering of the Securities or arising under this Agreement. Incapital will have no liability to any Selected Dealer for any act
or omission except for obligations expressly assumed by it hereunder, and no obligations on the part of Incapital will be implied hereby or inferred herefrom.
(d)
Blue Sky Laws
. Upon application to us, we shall inform you as to any advice we have received from counsel concerning the
jurisdictions in which Securities have been qualified for sale or are exempt under the securities or blue sky laws of such jurisdictions, but we do not assume any obligation or responsibility as to your right to sell Securities in any such
jurisdiction. You agree to: (a) only engage in a distribution in accordance with the terms of any restrictions in the final Prospectus or offering circular, as applicable; (b) not conduct any distribution which would constitute, in any
jurisdiction, a public offer as defined by the law of the relevant jurisdiction, unless you have requested of us and we have confirmed to you that the Securities are approved for public offer in such jurisdiction; and (c) observe the dates of
any subscription period.
(e)
U. S. Patriot Act/Office of Foreign Asset Control (OFAC)
. You represent and warrant, on behalf of
yourself and any subsidiary, affiliate, or agent to be used by you in the context of this Agreement, that you and they comply and will comply with all applicable rules and regulations of the Office of Foreign Assets Control of the U.S. Department of
the Treasury and all applicable requirements of the U.S. Bank Secrecy Act and the USA PATRIOT Act and
G-6
the rules and regulations promulgated thereunder. You agree to only market, offer or sell Securities in jurisdictions agreed by us and excluding those jurisdictions on the Country Sanctions
Programs of the OFAC.
(f)
Cease and Desist Proceedings
. You represent and warrant that you are not the subject of a pending
proceeding under Section 8A of the Securities Act in connection with the Offering.
(g)
Compliance with Law
. You agree that in
selling Securities pursuant to any Offering (which agreement shall also be for the benefit of the Issuer or other seller of such Securities) you will comply with all applicable laws, rules and regulations, including the applicable provisions of the
Securities Act and the Exchange Act, the applicable rules and regulations of the Commission thereunder, the applicable rules and regulations of any securities exchange having jurisdiction over the Offering and the applicable rules and regulations of
any regulatory organization having jurisdiction over your activities. You represent and warrant, on behalf of yourself and any subsidiary, affiliate, or agent to be used by you in the context of this Agreement, that you and they have not relied upon
advice from us, any Issuer of the Securities, the Underwriters or other sellers of the Securities or any of our or their respective affiliates regarding the suitability of the Securities for any investor.
(h)
Electronic Media
. You agree that you are familiar with the Commission’s guidance on the use of electronic media to deliver
documents under the federal securities laws and all guidance published by FINRA or its predecessor concerning delivery of documents by broker-dealers through electronic media. You agree that you with comply therewith in connection with a Registered
Offering.
(i)
Structured Products
. You agree that you are familiar with NASD Notice to Members 5-59 concerning the obligations of
member firms when selling structured products and, to the extent that it is applicable to you, you agree to comply with the requirements therein.
(j)
New Products
. You agree to comply with NASD Notice to Members 5-26 recommending best practices for reviewing new products.
5.
Indemnification
. You hereby agree to indemnify and hold us harmless and to indemnify and hold harmless the Issuers, any Underwriter
and any of our affiliates from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any action or claim) caused
by your failure or the failure of any other subsidiary, affiliate or agent of yours or the failure of any Selling Agent of yours to offer or sell the Securities in compliance with any applicable law or regulation, to comply with the provisions
hereof including, but not limited to, any actual or alleged breach or violation of any representations and warranties contained herein or to obtain any consent, approval or permission required in connection with the distribution of the Securities.
6.
Termination, Supplements and Amendments
. This Agreement shall continue in full force and effect until terminated by a written
instrument executed by each of the parties hereto. This Agreement may be supplemented or amended by us by written notice thereof to you, and any
G-7
such supplement or amendment to this Agreement shall be effective with respect to any Offering to which this Agreement applies after the date of such supplement or amendment. Each reference to
“
this Agreement
” herein shall, as appropriate, be to this Agreement as so amended and supplemented. The terms and conditions set forth in Section 3(c) hereof with regard to any Offering will terminate at the close of business
on the 30th day after the commencement of the public offering of the Securities to which such Offering relates, but in our discretion may be extended by us for a further period not exceeding 30 days and in our discretion, whether or not extended,
may be terminated at any earlier time.
7.
Successors and Assigns
. This Agreement shall be binding on, and inure to the benefit of, the parties
hereto and other persons specified in Section 1 hereof, and the respective successors and assigns of each of them.
8.
Governing Law
. This
Agreement and the terms and conditions set forth herein with respect to any Offering together with such supplementary terms and conditions with respect to such Offering as may be contained in any Written Communication from us to you in connection
therewith shall be governed by, and construed in accordance with, the laws of the State of Illinois.
9.
Headings and References
. The headings,
titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.
10.
Supersedes Prior Agreement
. This Agreement, as amended and supplemented from time to time, supersedes and replaces in its entirety any other selected dealers agreement and any other agreement between us governing similar transactions in which
you are acting as a selected dealer, for all Offerings conducted from and after the date hereof.
Please confirm by signing and returning
to us the enclosed copy of this Agreement that your subscription to, or your acceptance of any reservation of, any Securities pursuant to an Offering shall constitute (i) acceptance of and agreement to the terms and conditions of this Agreement
(as supplemented and amended pursuant to Section 6 hereof) together with and subject to any supplementary terms and conditions contained in any Written Communication from us in connection with such Offering, all of which shall constitute a
binding agreement between you and us, individually or as representative of any Underwriters, (ii) confirmation that your representations and warranties set forth in Section 4 hereof are true and correct at that time,
(iii) confirmation that your agreements set forth in Sections 2 and 3 hereof have been and will be fully performed by you to the extent and at the times required thereby and (iv) in the case of any Offering described in Section 3(a)
and 3(b) hereof, acknowledgment that you have requested and received from us sufficient copies of the final prospectus or offering circular, as the case may be, with respect to such Offering in order to comply with your undertakings in
Section 3(a) or 3(b) hereof.
G-8
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Very truly yours,
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By:
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By:
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Title:
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CONFIRMED: ,
20
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[CUSTOMER NAME]
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By:
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Name:
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(Print name)
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Title:
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G-9
EXHIBIT H
Form of Agent Joinder Letter
[Date]
[Name and Address of Agent]
Re: [XXXX XXXX XXXX (the
“
Notes
”) / Issuance of [$] XXXX XXXX XXXXby XXXXXXXX Due , Sold
on , for Settlement on
(the “Notes”)]
Dear
:
The Selling
Agent Agreement, dated as of September 8, 2015 (the “
Agreement
”), among Discover Financial Services (the “Company”), Incapital LLC and the Agents named therein, provides for the issue and sale by the Company of the
Notes.
Subject to and in accordance with the terms of the Agreement and accompanying Administrative Procedures, the Company hereby
appoints you as Agent (as such term is defined in the Agreement)
[on an ongoing basis in connection with the purchase of the Notes][in connection with the purchase of the Notes, but only for this one transaction]
. Your appointment is made
subject to the terms and conditions applicable to Agents under the Agreement and terminates upon
[termination of the Agreement][payment for the Notes or other termination of this transaction]
. Accompanying this letter is a copy of the
Agreement, the provisions of which are incorporated herein by reference. Copies of the documents previously delivered to the Agents under the Agreement are available upon request.
This letter agreement, like the Agreement, is governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflict of laws that would result in the application of any law other than the laws of the State of New York.
If the above
is in accordance with your understanding of our agreement, please sign and return this letter to us on or before settlement date. This action will confirm your appointment and your acceptance and agreement to act as Agent
[on an ongoing basis in
connection with the purchase of the Notes][in connection with the issue and sale of the Notes]
under the terms and conditions of the Agreement.
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Very truly yours,
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Discover Financial Services
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By:
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Name:
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Title:
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H-1
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AGREED AND ACCEPTED
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[Name of Agent]
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By:
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Name:
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Title:
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H-2
Exhibit 4.1
DISCOVER FINANCIAL SERVICES
AND
U.S. BANK NATIONAL ASSOCIATION, Trustee
Subordinated Indenture
Dated as
of September 8, 2015
CROSS REFERENCE SHEET(1)
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as of September 8, 2015, between DISCOVER FINANCIAL SERVICES and U.S.
BANK NATIONAL ASSOCIATION, Trustee:
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Section of the Act
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Section of the Indenture
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310(a)(1) and 2
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6.09
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310(a)(3), (4) and (5)
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Inapplicable
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310(b)
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6.08 and 6.10(a), (b) and (d)
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310(c)
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Inapplicable
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311(a)
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Inapplicable
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311(b)
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Inapplicable
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311(c)
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Inapplicable
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312(a)
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4.01
|
|
312(b)
|
|
Inapplicable
|
|
312(c)
|
|
Inapplicable
|
|
313(a)
|
|
4.04
|
|
313(b)(1)
|
|
Inapplicable
|
|
313(b)(2)
|
|
Inapplicable
|
|
313(c)
|
|
4.04
|
|
313(d)
|
|
4.04
|
|
314(a)
|
|
4.03
|
|
314(b)
|
|
Inapplicable
|
|
314(c)(1) and (2)
|
|
11.05
|
|
314(c)(3)
|
|
Inapplicable
|
|
314(d)
|
|
Inapplicable
|
|
314(e)
|
|
11.05
|
|
314(f)
|
|
Inapplicable
|
|
315(a), (c) and (d)
|
|
6.01
|
|
315(b)
|
|
5.11
|
|
315(e)
|
|
5.12
|
|
316(a)(1)
|
|
5.09
|
|
316(a)(2)
|
|
Inapplicable
|
|
316(a) (last sentence)
|
|
7.04
|
|
316(b)
|
|
5.07
|
|
316(c)
|
|
7.02(b)
|
|
317(a)
|
|
5.02
|
|
317(b)
|
|
3.04(a) and (b)
|
|
318(a)
|
|
11.07
|
|
(1)
|
This Cross Reference Sheet is not part of the Indenture.
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
P
AGE
|
|
|
ARTICLE 1
D
EFINITIONS
|
|
|
|
|
|
|
Section 1.01.
|
|
Certain Terms Defined
|
|
|
1
|
|
|
|
|
ARTICLE 2
S
ECURITIES
|
|
|
|
|
|
|
Section 2.01.
|
|
Forms Generally
|
|
|
5
|
|
|
Section 2.02.
|
|
Form of Trustee’s Certificate of Authentication
|
|
|
5
|
|
|
Section 2.03.
|
|
Amount Unlimited; Issuable in Series
|
|
|
5
|
|
|
Section 2.04.
|
|
Authentication and Delivery of Securities
|
|
|
7
|
|
|
Section 2.05.
|
|
Execution of Securities
|
|
|
9
|
|
|
Section 2.06.
|
|
Certificate of Authentication
|
|
|
9
|
|
|
Section 2.07.
|
|
Denomination and Date of Securities; Payments of Interest
|
|
|
9
|
|
|
Section 2.08.
|
|
Registration, Transfer and Exchange
|
|
|
10
|
|
|
Section 2.09.
|
|
Mutilated, Defaced, Destroyed, Lost and Stolen Securities
|
|
|
12
|
|
|
Section 2.10.
|
|
Cancellation of Securities; Disposition Thereof
|
|
|
12
|
|
|
Section 2.11.
|
|
Temporary Securities
|
|
|
13
|
|
|
|
|
ARTICLE 3
C
OVENANTS
O
F
T
HE
I
SSUER
|
|
|
|
|
|
|
Section 3.01.
|
|
Payment of Principal and Interest
|
|
|
13
|
|
|
Section 3.02.
|
|
Offices for Payments, etc
|
|
|
13
|
|
|
Section 3.03.
|
|
Appointment to Fill a Vacancy in Office of Trustee
|
|
|
14
|
|
|
Section 3.04.
|
|
Paying Agents
|
|
|
14
|
|
|
Section 3.05.
|
|
Written Statement to Trustee
|
|
|
15
|
|
|
Section 3.06.
|
|
Luxembourg Publications
|
|
|
15
|
|
|
|
|
ARTICLE 4
S
ECURITYHOLDERS
L
ISTS
A
ND
R
EPORTS
B
Y
T
HE
I
SSUER
A
ND
T
HE
T
RUSTEE
|
|
|
|
|
|
|
Section 4.01.
|
|
Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders
|
|
|
15
|
|
|
Section 4.02.
|
|
Preservation and Disclosure of Securityholders Lists
|
|
|
15
|
|
|
Section 4.03.
|
|
Reports by the Issuer
|
|
|
15
|
|
|
Section 4.04.
|
|
Reports by the Trustee
|
|
|
16
|
|
|
|
|
ARTICLE 5
R
EMEDIES
O
F
T
HE
T
RUSTEE
A
ND
S
ECURITYHOLDERS
O
N
E
VENT
O
F
D
EFAULT
|
|
|
|
|
|
|
Section 5.01.
|
|
Event of Default Defined; Acceleration of Maturity; Waiver of Default
|
|
|
16
|
|
|
Section 5.02.
|
|
Collection of Indebtedness by Trustee; Trustee may Prove Debt
|
|
|
17
|
|
|
Section 5.03.
|
|
Application of Proceeds
|
|
|
18
|
|
|
Section 5.04.
|
|
Suits for Enforcement
|
|
|
19
|
|
|
Section 5.05.
|
|
Restoration of Rights on Abandonment of Proceedings
|
|
|
19
|
|
|
Section 5.06.
|
|
Limitations on Suits by Securityholders
|
|
|
19
|
|
|
Section 5.07.
|
|
Unconditional Right of Securityholders to Institute Certain Suits
|
|
|
20
|
|
|
Section 5.08.
|
|
Powers and Remedies Cumulative; Delay or Omission not Waiver of Default
|
|
|
20
|
|
i
|
|
|
|
|
|
|
|
|
Section 5.09.
|
|
Control by Holders of Securities
|
|
|
20
|
|
|
Section 5.10.
|
|
Waiver of Past Defaults
|
|
|
20
|
|
|
Section 5.11.
|
|
Trustee to Give Notice of Default; But May Withhold in Certain Circumstances
|
|
|
21
|
|
|
Section 5.12.
|
|
Right of Court to Require Filing of Undertaking to Pay Costs
|
|
|
21
|
|
|
|
|
ARTICLE 6
C
ONCERNING
T
HE
T
RUSTEE
|
|
|
|
|
|
|
Section 6.01.
|
|
Duties And Responsibilities of the Trustee; During Default; Prior to Default
|
|
|
21
|
|
|
Section 6.02.
|
|
Certain Rights of the Trustee
|
|
|
22
|
|
|
Section 6.03.
|
|
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
|
|
|
23
|
|
|
Section 6.04.
|
|
Trustee and Agents May Hold Securities or Coupons; Collections, etc
|
|
|
23
|
|
|
Section 6.05.
|
|
Moneys Held by Trustee
|
|
|
23
|
|
|
Section 6.06.
|
|
Compensation and Indemnification of Trustee and its Prior Claim
|
|
|
23
|
|
|
Section 6.07.
|
|
Right of Trustee to Rely on Officer’s Certificate, etc
|
|
|
24
|
|
|
Section 6.08.
|
|
Persons Eligible for Appointment as Trustee
|
|
|
24
|
|
|
Section 6.09.
|
|
Resignation and Removal; Appointment of Successor Trustee
|
|
|
24
|
|
|
Section 6.10.
|
|
Acceptance of Appointment by Successor Trustee
|
|
|
25
|
|
|
Section 6.11.
|
|
Merger, Conversion, Consolidation or Succession to Business of Trustee
|
|
|
26
|
|
|
Section 6.12.
|
|
Appointment of Authenticating Agent
|
|
|
26
|
|
|
|
|
ARTICLE 7
C
ONCERNING
T
HE
S
ECURITYHOLDERS
|
|
|
|
|
|
|
Section 7.01.
|
|
Evidence of Action Taken by Securityholders
|
|
|
27
|
|
|
Section 7.02.
|
|
Proof of Execution of Instruments and of Holding of Securities
|
|
|
27
|
|
|
Section 7.03.
|
|
Holders to be Treated as Owners
|
|
|
28
|
|
|
Section 7.04.
|
|
Securities Owned by Issuer Deemed Not Outstanding
|
|
|
28
|
|
|
Section 7.05.
|
|
Right of Revocation of Action Taken
|
|
|
28
|
|
|
|
|
ARTICLE 8
S
UPPLEMENTAL
I
NDENTURES
|
|
|
|
|
|
|
Section 8.01.
|
|
Supplemental Indentures Without Consent of Securityholders
|
|
|
29
|
|
|
Section 8.02.
|
|
Supplemental Indentures With Consent of Securityholders
|
|
|
29
|
|
|
Section 8.03.
|
|
Effect of Supplemental Indenture
|
|
|
30
|
|
|
Section 8.04.
|
|
Documents to Be Given to Trustee
|
|
|
31
|
|
|
Section 8.05.
|
|
Notation on Securities in Respect of Supplemental Indentures
|
|
|
31
|
|
|
Section 8.06.
|
|
Effect on Senior Indebtedness
|
|
|
31
|
|
|
|
|
ARTICLE 9
C
ONSOLIDATION
, M
ERGER
, S
ALE
O
R
C
ONVEYANCE
|
|
|
|
|
|
|
Section 9.01.
|
|
Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions
|
|
|
31
|
|
|
Section 9.02.
|
|
Successor Corporation Substituted
|
|
|
31
|
|
|
Section 9.03.
|
|
Opinion of Counsel Delivered to Trustee
|
|
|
31
|
|
|
|
|
ARTICLE 10
S
ATISFACTION
A
ND
D
ISCHARGE
O
F
I
NDENTURE
; U
NCLAIMED
M
ONEYS
|
|
|
|
|
|
|
Section 10.01.
|
|
Satisfaction and Discharge of Indenture
|
|
|
32
|
|
|
Section 10.02.
|
|
Application by Trustee of Funds Deposited for Payment of Securities
|
|
|
34
|
|
|
Section 10.03.
|
|
Repayment of Moneys Held by Paying Agent
|
|
|
34
|
|
ii
|
|
|
|
|
|
|
|
|
Section 10.04.
|
|
Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years
|
|
|
34
|
|
|
Section 10.05.
|
|
Indemnity for U.S. Government Obligations
|
|
|
35
|
|
|
|
|
ARTICLE 11
M
ISCELLANEOUS
P
ROVISIONS
|
|
|
|
|
|
|
Section 11.01.
|
|
Incorporators, Stockholders, Officers And Directors Of Issuer Exempt From Individual Liability
|
|
|
35
|
|
|
Section 11.02.
|
|
Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities and Coupons
|
|
|
35
|
|
|
Section 11.03.
|
|
Successors and Assigns of Issuer Bound by Indenture
|
|
|
35
|
|
|
Section 11.04.
|
|
Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons
|
|
|
35
|
|
|
Section 11.05.
|
|
Officer’s Certificates and Opinions of Counsel; Statements to be Contained Therein
|
|
|
36
|
|
|
Section 11.06.
|
|
Payments Due on Saturdays, Sundays or Holidays
|
|
|
36
|
|
|
Section 11.07.
|
|
Conflict of any Provision of Indenture with Trust Indenture Act of 1939
|
|
|
36
|
|
|
Section 11.08.
|
|
NEW YORK LAW TO GOVERN
|
|
|
36
|
|
|
Section 11.09.
|
|
Counterparts
|
|
|
37
|
|
|
Section 11.10.
|
|
Effect Of Headings
|
|
|
37
|
|
|
Section 11.11.
|
|
Securities in a Foreign Currency
|
|
|
37
|
|
|
Section 11.12.
|
|
Judgment Currency
|
|
|
37
|
|
|
|
|
ARTICLE 12
R
EDEMPTION
O
F
S
ECURITIES
A
ND
S
INKING
F
UNDS
|
|
|
|
|
|
|
Section 12.01.
|
|
Applicability of Article
|
|
|
38
|
|
|
Section 12.02.
|
|
Notice of Redemption; Partial Redemptions
|
|
|
38
|
|
|
Section 12.03.
|
|
Payment of Securities Called for Redemption
|
|
|
39
|
|
|
Section 12.04.
|
|
Exclusion of Certain Securities from Eligibility for Selection for Redemption
|
|
|
39
|
|
|
Section 12.05.
|
|
Mandatory and Optional Sinking Funds
|
|
|
39
|
|
|
|
|
ARTICLE 13
S
UBORDINATION
O
F
S
ECURITIES
|
|
|
|
|
|
|
Section 13.01.
|
|
Agreement to Subordinate
|
|
|
41
|
|
|
Section 13.02.
|
|
Default on Senior Indebtedness
|
|
|
41
|
|
|
Section 13.03.
|
|
Liquidation; Dissolution; Bankruptcy
|
|
|
42
|
|
|
Section 13.04.
|
|
Subrogation
|
|
|
43
|
|
|
Section 13.05.
|
|
Trustee to Effectuate Subordination
|
|
|
43
|
|
|
Section 13.06.
|
|
Notice by the Issuer
|
|
|
43
|
|
|
Section 13.07.
|
|
Rights of the Trustee; Holders of Senior Indebtedness
|
|
|
44
|
|
|
Section 13.08.
|
|
Subordination May Not Be Impaired
|
|
|
44
|
|
iii
THIS SUBORDINATED INDENTURE, dated as of September 8, 2015 between DISCOVER FINANCIAL
SERVICES, a Delaware corporation (the “
Issuer
”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as trustee (the “
Trustee
”),
W I T N E S S E T H:
WHEREAS,
the Issuer has duly authorized the issue from time to time of its unsecured, subordinated, debentures, notes or other evidences of indebtedness to be issued in one or more series (the “
Securities
”) up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized
the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE: In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities and of the coupons, if any, appertaining thereto as follows:
ARTICLE 1
D
EFINITIONS
Section 1.01. Certain Terms Defined
. The following terms (except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act of 1933 (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting principles as are generally accepted at the time of any computation.
The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Section
include the plural as well as the singular.
“
Additional Provisions
” shall have the meaning set forth in
Section 13.01.
“
Authenticating Agent
” shall have the meaning set forth in Section 6.12.
“
Authorized Newspaper
” means a newspaper (which, in the case of The City of New York, will, if practicable, be
The Wall
Street Journal
(Eastern Edition), in the case of the United Kingdom, will, if practicable, be the
Financial Times
(London Edition) and, in the case of Luxembourg, will, if practicable, be the
Luxemburger Wort
) published in an
official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in The City of New York, the United Kingdom or in Luxembourg, as applicable. If it
shall be impractical in the opinion of the Trustee to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.
“
Board of Directors
” means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.
“
Board Resolution
” means a copy of one or
more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted or consented to by the Board of Directors and to be in full force and effect, and delivered to the Trustee.
“
Business Day
” means, with respect to any Security, unless otherwise specified
pursuant to Section 2.03, a day that in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the form of such Security, is not a day on which banking institutions are authorized or required by law
or regulation to close.
“
Commission
” means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
“
Corporate Trust Office
” means the office of the Trustee at which this Indenture
shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located in the borough of Manhattan, The City of New York.
“
Coupon
” means any interest coupon appertaining to a Security.
“
covenant defeasance
” shall have the meaning set forth in Section 10.01(c).
“
Default
” shall have the meaning set forth in Section 5.06.
“
Depositary
” means, with respect to the Securities of any series issuable or issued in the form of one or more Registered
Global Securities, the Person designated as Depositary by the Issuer pursuant to Section 2.03 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter
“
Depositary
” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “
Depositary
” as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Registered Global Securities of that series.
“
Discover Bank
” means Discover Bank
or any subsidiary succeeding to any substantial part of the business now conducted by Discover Bank.
“
Dollar
” means the
coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“
Event of Default
” means any event or condition specified as such in Section 5.01.
“
Foreign Currency
” means a currency issued by the government of a country other than the United States (or any currency unit
comprised of any such currencies).
“
Holder
,” “
Holder of Securities
,” “
Securityholder
”
or other similar terms mean (a) in the case of any Registered Security, the Person in whose name such Security is registered in the security register kept by the Issuer for that purpose in accordance with the terms hereof, and (b) in the
case of any Unregistered Security, the bearer of such Security, or any Coupon appertaining thereto, as the case may be.
“
Indenture
” means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as
so amended or supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.
“
Interest
” means, when used with respect to non-interest bearing Securities, interest payable after maturity.
“
Issuer
” means (except as otherwise provided in Article Six) Discover Financial Services, a Delaware corporation and, subject
to Article Nine, its successors and assigns.
“
Issuer Order
” means a written statement, request or order of the Issuer
signed in its name by any one of the following: the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the General Counsel, the Treasurer, any Assistant
Treasurer or any other person authorized by the Board of Directors to execute any such written statement, request or order.
“
Judgment Currency
” shall have the meaning set forth in Section 11.12.
2
“
Officer’s Certificate
” means a certificate (i) signed by any one of
the following: the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the General Counsel, the Treasurer, any Assistant Treasurer or any other person authorized
by the Board of Directors to execute any such certificate and (ii) delivered to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in
Section 11.05.
“
Opinion of Counsel
” means an opinion in writing signed by the General Counsel of the Issuer or by
such other legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for
in Section 11.05.
“
original issue date
” of any Security (or portion thereof) means the earlier of (a) the date
of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
“
Original Issue Discount Security
” means any Security that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.
“
Outstanding
” when used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any
particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities
theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof,
for the payment or redemption of which moneys or U.S. Government Obligations (as provided for in Section 10.01) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or
shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such Securities, or portions thereof, are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution for which other Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and
binding obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of Outstanding Securities of any
or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.
“
Periodic Offering
” means an offering of Securities of a series from time to time, the specific terms of which Securities,
including, without limitation, the rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Issuer or its agents upon the issuance
of such Securities.
“
Person
” means any individual, corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“
principal
”
whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any.”
“
record date
” shall have the meaning set forth in Section 2.07.
“
Redemption Notice Period
” shall have the meaning set forth in Section 12.02.
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“
Registered Global Security
” means a Security evidencing all or a part of a
series of Registered Securities, issued to the Depositary for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04.
“
Registered Security
” means any Security registered on the Security register of the Issuer.
“
Required Currency
” shall have the meaning set forth in Section 11.12.
“
Responsible Officer
” when used with respect to the Trustee means the chairman of the Board of Directors, any vice chairman
of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president (whether or not designated by numbers or words added before or
after the title “vice president”) the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any
other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of their
knowledge of and familiarity with the particular subject.
“
Security
” or “
Securities
” has the meaning
stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture.
“
Senior Indebtedness
” means, with respect to the Securities of any particular series issued and authenticated pursuant to the
terms of this Indenture, (a) all obligations of the Issuer in respect of borrowed and purchased money; (b) all obligations of the Issuer arising from off-balance sheet guarantees and direct credit substitutes; (c) all capital lease
obligations of the Issuer; (d) all obligations of the Issuer issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Issuer and all obligations of the Issuer under any conditional sale or title
retention agreement, but excluding trade accounts payable arising in the ordinary course of business; (e) all obligations, contingent or otherwise, of the Issuer in respect of any letters of credit, banker’s acceptances, security purchase
facilities or similar credit transactions; (f) all obligations of the Issuer associated with derivative products such as interest rate and foreign exchange contracts, commodity contracts and similar arrangements; (g) all obligations of the
type referred to in clauses (a) through (f) above of other Persons for the payment of which the Issuer is responsible or liable as obligor, guarantor or otherwise; and (h) all obligations of the type referred to in clauses (a)
through (g) above of other Persons secured by any lien on any property or asset of the Issuer, whether or not such obligation is assumed by the Issuer, in each case, whether outstanding on the date as of which this Indenture is dated, or
created, assumed or incurred after such date, except that Senior Indebtedness shall not include any Securities and any indebtedness or any guarantee that is by its terms subordinated to, or ranks equally with the subordinated debt Securities and the
issuance of which (x) has received the concurrence or approval of the staff of the Federal Reserve Bank of Chicago or the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of issuance prevent the
subordinated debt securities from qualifying for Tier 2 capital treatment (irrespective of any limits on the amount of the Issuer’s Tier 2 capital) under the applicable capital adequacy guidelines, regulations, policies or published
interpretations of the Board of Governors of the Federal Reserve System.
“
Subsidiary
” means any corporation, partnership
or other entity of which at the time of determination the Issuer owns or controls directly or indirectly more than 50% of the shares of the voting stock or equivalent interest.
“
Trustee
” means the Person identified as “
Trustee
” in the first paragraph hereof and, subject to the
provisions of Article 6, shall also include any successor trustee. “Trustee” shall also mean or include each Person who is then a trustee hereunder and if at any time there is more than one such Person, “
Trustee
” as
used with respect to the Securities of any series shall mean the trustee with respect to the Securities of such series.
“
Unregistered Security
” means any Security other than a Registered Security.
“
U.S. Government Obligations
” shall have the meaning set forth in Section 10.01(a).
“
Yield to Maturity
” means the yield to maturity on a series of Securities, calculated at the time of issuance of such series,
or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice.
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ARTICLE 2
S
ECURITIES
Section 2.01. Forms Generally
. The Securities of each series and the Coupons, if any, to be attached thereto shall be
substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to rather than set forth in a Board
Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by
this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities and Coupons, if any, as evidenced by their execution of such Securities and Coupons. The
definitive Securities and Coupons, if any, shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities and Coupons, if any, as evidenced by
their execution of such Securities and Coupons, if any.
Section 2.02. Form of Trustee’s Certificate of Authentication
.
The Trustee’s certificate of authentication on all Securities shall be in substantially the following form:
This is one of the
Securities referred to in the within-mentioned Subordinated Indenture.
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as Trustee
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By:
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Authorized Officer
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If at any time there shall be an Authenticating Agent appointed with respect to any series of
Securities, then the Trustee’s Certificate of Authentication to be borne by the Securities of each such series shall be substantially as follows:
This is one of the Securities referred to in the within-mentioned Subordinated Indenture.
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as Authenticating agent
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By:
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Authorized Officer
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Section 2.03. Amount Unlimited; Issuable in Series
. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series
and each such series shall be subordinated in right of payment to any Senior Indebtedness, as provided in Article 13 of this Indenture. There shall be established in or pursuant to one or more Board Resolutions (and to the extent established
pursuant to rather than set forth in a Board Resolution, in an Officer’s Certificate detailing such establishment) or established in one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series,
(a) the designation of the Securities of the series, which shall distinguish the Securities of the series from the Securities of all other
series;
(b) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03);
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(c) if other than Dollars, the coin or currency in which the Securities of the series are
denominated (including, but not limited to, any Foreign Currency);
(d) the date or dates on which the principal of the Securities of the
series is payable;
(e) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which
such interest shall accrue, on which such interest shall be payable and (in the case of Registered Securities) on which a record shall be taken for the determination of Holders to whom interest is payable and/or the method by which such rate or
rates or date or dates shall be determined;
(f) the place or places where the principal of and any interest on Securities of the series
shall be payable (if other than as provided in Section 3.02);
(g) the right, if any, of the Issuer to redeem Securities, in whole or
in part, at its option and the period or periods within which, the price or prices at which and any terms and conditions, including the Redemption Notice Period, upon which Securities of the series may be so redeemed, pursuant to any sinking fund or
otherwise;
(h) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any terms and conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(i) if other than denominations of $2,000 and any integral
multiple of $1,000, in excess thereof, the denominations in which Securities of the series shall be issuable;
(j) if other than the
principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;
(k) if other than the coin or currency in which the Securities of the series are denominated, the coin or currency in which payment of the
principal of or interest on the Securities of the series shall be payable;
(l) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder thereof, in a coin or currency other than that in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election
may be made;
(m) if the amount of payments of principal of and interest on the Securities of the series may be determined with reference
to an index based on a coin or currency other than that in which the Securities of the series are denominated, or with reference to any currencies, securities or baskets of securities, commodities or indices, the manner in which such amounts shall
be determined;
(n) if the Holders of the Securities of the series may convert or exchange the Securities of the series into or for
securities of the Issuer or of other entities or other property (or the cash value thereof), the specific terms of and period during which such conversion or exchange may be made;
(o) whether the Securities of the series will be issuable as Registered Securities (and if so, whether such Securities will be issuable as
Registered Global Securities) or Unregistered Securities (with or without Coupons), or any combination of the foregoing, any restrictions applicable to the offer, sale, transfer, exchange or delivery of Unregistered Securities or Registered
Securities or the payment of interest thereon and, if other than as provided in Section 2.08, the terms upon which Unregistered Securities of the series may be exchanged for Registered Securities of the series and vice versa;
(p) whether and under what circumstances the Issuer will pay additional amounts on the Securities of the series held by a Person who is not a
U.S. Person in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional amounts;
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(q) if the Securities of the series are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and terms of such certificates, documents or conditions;
(r) provisions specifying the relative degree, if any, to which such Securities of the series issued and authenticated pursuant to the terms
of this Indenture will be senior to or be subordinated in right of payment to other series of Securities or other Indebtedness of the Issuer, as the case may be, whether such other series of Securities or other Indebtedness is Outstanding or not;
(s) the specific subordination provisions applicable to such Security;
(t) any trustees, depositaries, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the
Securities of the series;
(u) any events of default or covenants with respect to the Securities of the series other than those provided
in this Indenture; and
(v) any other terms of the series.
All Securities of any one series and Coupons, if any, appertaining thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or pursuant to the Board Resolution or Officer’s Certificate referred to above or as set forth in any such indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board Resolution, such Officer’s Certificate or in any such indenture supplemental
hereto.
Notwithstanding Section 2.03(b) hereof and unless otherwise expressly provided with respect to a series of Securities, the
aggregate principal amount of a series of Securities may be increased and additional Securities of such series may be issued up to a maximum aggregate principal amount authorized with respect to such series as increased.
Section 2.04. Authentication and Delivery of Securities
. (a) The Issuer may deliver Securities of any series having attached
thereto appropriate Coupons, if any, executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver such Securities to or
upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The maturity
date, original issue date, interest rate and any other terms of the Securities of such series and Coupons, if any, appertaining thereto (including Redemption Notice Periods) shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in the case of subparagraphs 2.04(a)(ii), 2.04(a)(iii) and 2.04(a)(iv) below only at or
before the time of the first request of the Issuer to the Trustee to authenticate Securities of such series) and (subject to Section 6.01) shall be fully protected in relying upon, unless and until such documents have been superseded or
revoked:
(i) an Issuer Order requesting such authentication and setting forth delivery instructions if the Securities and
Coupons, if any, are not to be delivered to the Issuer, provided that, with respect to Securities of a series subject to a Periodic Offering, (a) such Issuer Order may be delivered by the Issuer to the Trustee prior to the delivery to the
Trustee of such Securities for authentication and delivery, (b) the Trustee shall authenticate and deliver Securities of such series for original issue from time to time, in an aggregate principal amount not exceeding the aggregate principal
amount established for such series, pursuant to an Issuer Order or pursuant to procedures acceptable to the Trustee as may be specified from time to time by an Issuer Order, (c) the maturity date or dates, original issue date or dates, interest
rate or rates and any other terms of Securities of such series (including Redemption Notice Periods) shall be determined by an Issuer Order or pursuant to such procedures and (d) if provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral or electronic instructions from the Issuer or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing;
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(ii) any Board Resolution, Officer’s Certificate and/or executed
supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and terms of the Securities and Coupons, if any, were established;
(iii) an Officer’s Certificate setting forth the form or forms and terms of the Securities and Coupons, if any, stating
that the form or forms and terms of the Securities and Coupons, if any, have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and
(iv) at the option of the Issuer, either an Opinion of Counsel, or a letter addressed to the Trustee permitting it to rely on
an Opinion of Counsel, substantially to the effect that:
(A) the forms of the Securities and Coupons, if any, have been
duly authorized and established in conformity with the provisions of this Indenture;
(B) in the case of an underwritten
offering, the terms of the Securities have been duly authorized and established in conformity with the provisions of this Indenture, and, in the case of an offering that is not underwritten, certain terms of the Securities have been established
pursuant to a Board Resolution, an Officer’s Certificate or a supplemental indenture in accordance with this Indenture, and when such other terms as are to be established pursuant to procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly authorized by the Issuer and will have been established in conformity with the provisions of this Indenture; and
(C) when the Securities and Coupons, if any, have been executed by the Issuer and authenticated by the Trustee in accordance
with the provisions of this Indenture and delivered to and duly paid for by the purchasers thereof, they will have been duly issued under this Indenture and will be valid and binding obligations of the Issuer, enforceable in accordance with their
respective terms, and will be entitled to the benefits of this Indenture.
In rendering such opinions, such counsel may qualify any
opinions as to enforceability by stating that such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Such counsel may rely, as to all matters governed by the laws of jurisdictions other than the State of New York and the federal law
of the United States, upon opinions of other counsel (copies of which shall be delivered to the Trustee), who shall be counsel reasonably satisfactory to the Trustee, in which case the opinion shall state that such counsel believes he and the
Trustee are entitled so to rely. Such counsel may also state that, insofar as such opinion involves factual matters, he has relied, to the extent he deems proper, upon certificates of officers of the Issuer and its subsidiaries and certificates of
public officials.
The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the
Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees
or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.03 that the Securities of a series are to be issued in the form of one or more
Registered Global Securities, then the Issuer shall execute and the Trustee shall, in accordance with this Section and the Issuer Order with respect to such series, authenticate and deliver one or more Registered Global Securities that
(i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such
Registered Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions and (iv) shall bear a legend substantially to
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the following effect: “Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”
Each Depositary designated pursuant to Section 2.03 must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation.
Section 2.05. Execution of Securities
. The Securities and, if applicable, each Coupon appertaining thereto shall be signed on
behalf of the Issuer by any one of the following: the Chief Executive Officer, the President, the Chief Financial Officer any Executive Vice President, Senior Vice President or Vice President, the General Counsel, the Treasurer, the General Counsel,
the Treasurer, any Assistant Treasurer or any other person authorized by the Board of Directors to execute Securities or, if applicable, Coupons, which Securities or Coupons may, but need not, be attested. Such signatures may be the manual or
facsimile signatures of the present or any future such officers. Minor errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by
the Trustee.
In case any officer of the Issuer who shall have signed any of the Securities or Coupons, if any, shall cease to be such
officer before the Security or Coupon so signed (or the Security to which the Coupon so signed appertains) shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security or Coupon nevertheless may be authenticated
and delivered or disposed of as though the person who signed such Security or Coupon had not ceased to be such officer of the Issuer; and any Security or Coupon may be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.
Section 2.06. Certificate of Authentication
. Only such Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. No Coupon shall be
entitled to the benefits of this Indenture or shall be valid and obligatory for any purpose until the certificate of authentication on the Security to which such Coupon appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this
Indenture.
Section 2.07. Denomination and Date of Securities; Payments of Interest
. The Securities of each series shall be
issuable as Registered Securities or Unregistered Securities in denominations established as contemplated by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple of $1,000 in excess thereof. The
Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the
execution and authentication thereof.
Each Registered Security shall be dated the date of its authentication. Each Unregistered Security
shall be dated as provided in the resolution or resolutions of the Board of Directors of the Issuer referred to in Section 2.03. The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the
dates, established as contemplated by Section 2.03.
The Person in whose name any Registered Security of any series is registered at
the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any
transfer or exchange of such Registered Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such
series, in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Registered Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Registered Securities not less than 15 days preceding such subsequent record
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date. The term “record date” as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Registered Securities of such series established as contemplated by Section 2.03, or, if no such date is so established, if such interest payment date is the first day of a calendar month, the fifteenth day
of the next preceding calendar month or, if such interest payment date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day.
Section 2.08. Registration, Transfer and Exchange
. The Issuer will keep at each office or agency to be maintained for the purpose
as provided in Section 3.02 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide for the registration of Registered Securities of such series and the
registration of transfer of Registered Securities of such series. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new
Registered Security or Registered Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered Securities) and Coupons (except for Coupons attached to any temporary
global Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may be exchanged for a Registered Security or Registered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of
such Registered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter provided. If the
Securities of any series are issued in both registered and unregistered form, except as otherwise specified pursuant to Section 2.03, at the option of the Holder thereof, Unregistered Securities of any series may be exchanged for Registered
Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.02, with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. At the option of the Holder thereof, if Unregistered Securities of any series, maturity date, interest rate and original issue date are issued in more than one authorized denomination, except as otherwise specified pursuant to
Section 2.03, such Unregistered Securities may be exchanged for Unregistered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at
the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02 or as specified pursuant to Section 2.03, with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges hereinafter provided. Unless otherwise specified pursuant to Section 2.03, Registered Securities of any series may not be
exchanged for Unregistered Securities of such series. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled
to receive. All Securities and Coupons surrendered upon any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the Trustee will deliver a certificate of disposition thereof to the
Issuer.
All Registered Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.
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The Issuer shall not be required to exchange or register a transfer of (a) any Securities of
any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption, in whole or in part, except, in
the case of any Security to be redeemed in part, the portion thereof not so to be redeemed or (c) any Securities if the Holder thereof has exercised any right to require the Issuer to repurchase such Securities, in whole or in part, except, in
the case of any Security to be repurchased in part, the portion thereof not so to be repurchased.
Notwithstanding any other provision of
this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as a
whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a series represented by one or
more Registered Global Securities notifies the Issuer that it is unwilling or unable to continue as Depositary for such Registered Securities or if at any time the Depositary for such Registered Securities shall no longer be eligible under
Section 2.04, the Issuer shall appoint a successor Depositary eligible under Section 2.04 with respect to such Registered Securities. If a successor Depositary eligible under Section 2.04 for such Registered Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer’s election pursuant to Section 2.03 that such Registered Securities be represented by one or more
Registered Global Securities shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such
Registered Securities in exchange for such Registered Global Security or Securities.
Subject to the procedures of the Depositary, the
Issuer may at any time and in its sole discretion determine that the Registered Securities of any series issued in the form of one or more Registered Global Securities shall no longer be represented by a Registered Global Security or Securities. In
such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities, in exchange for such Registered
Global Security or Securities.
If specified by the Issuer pursuant to Section 2.03 with respect to Securities represented by a
Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in exchange in whole or in part for Securities of the same series in definitive registered form on such terms as are
acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the
principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause Section 2.08(i) above.
Upon the exchange of a Registered Global Security for Securities in definitive registered form without coupons, in authorized denominations,
such Registered Global Security shall be cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities in definitive registered form without coupons issued in exchange for a Registered Global Security pursuant to this
Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the
Trustee or an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.
11
All Securities issued upon any transfer or exchange of Securities shall be valid obligations of
the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of Securities to the contrary, none of the Issuer, the Trustee or any agent of
the Issuer or the Trustee (any of which, other than the Issuer, shall rely on an Officer’s Certificate and an Opinion of Counsel) shall be required to exchange any Unregistered Security for a Registered Security if such exchange would result in
adverse Federal income tax consequences to the Issuer (such as, for example, the inability of the Issuer to deduct from its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then
applicable United States Federal income tax laws.
Section 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities
. In
case any temporary or definitive Security or any Coupon appertaining to any Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date, bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining to the Securities so mutilated, defaced, destroyed, lost or
stolen, or in exchange or substitution for the Security to which such mutilated, defaced, destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen.
In every case the applicant for a substitute Security or Coupon shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each
of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof and in the case of mutilation or defacement shall surrender
the Security and related Coupons to the Trustee or such agent.
At the expense of the holder, the Issuer may, in its discretion, replace
any Securities that become mutilated, destroyed, lost or stolen or are apparently destroyed, lost or stolen. The mutilated Securities must be delivered to the Trustee. At the expense of the holder, an indemnity that is satisfactory to the Trustee
may be required before a replacement Security will be issued. In case any Security or Coupon which has matured or is about to mature or has been called for redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the
Issuer may instead of issuing a substitute Security, pay or authorize the payment of the same or the relevant Coupon (without surrender thereof except in the case of a mutilated or defaced Security or Coupon), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to the provisions of this Section by virtue of the fact that any such
Security or Coupon is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities or Coupons of such series duly authenticated and delivered hereunder. All
Securities and Coupons shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen
Securities and Coupons and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities
without their surrender.
Section 2.10. Cancellation of Securities; Disposition Thereof
. All Securities and Coupons
surrendered for payment, redemption, registration of transfer or exchange, or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee or any agent of the
Trustee, shall be delivered to the Trustee or its agent for cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee or its agent shall dispose of cancelled Securities and Coupons held by it and deliver a certificate of disposition to the Issuer. If the Issuer or its agent shall acquire any of the Securities or Coupons, such
acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities or Coupons unless and until the same are delivered to the Trustee or its agent for cancellation.
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Section 2.11. Temporary Securities
. Pending the preparation of definitive Securities
for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary
Securities of any series shall be issuable as Registered Securities without coupons, or as Unregistered Securities with or without coupons attached thereto, of any authorized denomination, and substantially in the form of the definitive Securities
of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof.
Temporary Securities may contain such references to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Registered Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.02 and, in the case of Unregistered Securities, at any agency maintained by the Issuer for such
purpose as specified pursuant to Section 2.03, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having
authorized denominations and, in the case of Unregistered Securities, having attached thereto any appropriate Coupons. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series, unless otherwise established pursuant to Section 2.03. The provisions of this Section are subject to any restrictions or limitations on the issue and delivery of temporary Unregistered Securities of any
series that may be established pursuant to Section 2.03 (including any provision that Unregistered Securities of such series initially be issued in the form of a single global Unregistered Security to be delivered to a depositary or agency
located outside the United States and the procedures pursuant to which definitive or global Unregistered Securities of such series would be issued in exchange for such temporary global Unregistered Security).
ARTICLE 3
C
OVENANTS
O
F
T
HE
I
SSUER
Section 3.01. Payment of Principal and Interest
. The Issuer covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any additional amounts payable pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the Coupons, if any, appertaining thereto and in this Indenture. The interest on Securities with Coupons attached (together with any additional amounts payable pursuant to the
terms of such Securities) shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. If any temporary Unregistered Security provides that interest
thereon may be paid while such Security is in temporary form, the interest on any such temporary Unregistered Security (together with any additional amounts payable pursuant to the terms of such Security) shall be paid, as to the installments of
interest evidenced by Coupons attached thereto, if any, only upon presentation and surrender thereof, and, as to the other installments of interest, if any, only upon presentation of such Securities for notation thereon of the payment of such
interest, in each case subject to any restrictions that may be established pursuant to Section 2.03. The interest on Registered Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable
only to or upon the written order of the Holders thereof and, at the option of the Issuer, may be paid by wire transfer or by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they
appear on the registry books of the Issuer.
Section 3.02. Offices for Payments, etc
. So long as any Registered Securities are
authorized for issuance pursuant to this Indenture or are outstanding hereunder, the Issuer will maintain an office or agency where the Registered Securities of each series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable, pursuant to Section 2.03 and where the Registered Securities of each series may be presented for registration of transfer as in this Indenture provided.
The Issuer initially appoints the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York, as its agency for
the foregoing purposes and initially appoints the Trustee as Paying Agent for each
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series of Securities. The Issuer may subsequently appoint a different office or agency of the Issuer in the Borough of Manhattan, The City of New York. The Issuer further initially appoints the
Trustee at said Corporate Trust Office as Security registrar for each series of Securities. The Issuer will have the right to remove and replace from time to time the Security registrar for any series of Securities; provided that no such removal or
replacement will be effective until a successor Security registrar with respect to such series of Securities has been appointed by the Issuer and has accepted such appointment.
The Issuer will maintain one or more offices or agencies in a city or cities located outside the United States (including any city in which
such an agency is required to be maintained under the rules of any stock exchange on which the Securities of such series are listed) where the Unregistered Securities, if any, of each series and Coupons, if any, appertaining thereto may be presented
for payment. No payment on any Unregistered Security or Coupon will be made upon presentation of such Unregistered Security or Coupon at an agency of the Issuer within the United States nor will any payment be made by transfer to an account in, or
by mail to an address in, the United States unless pursuant to applicable United States laws and regulations then in effect such payment can be made without adverse tax consequences to the Issuer. Notwithstanding the foregoing, payments in Dollars
of Unregistered Securities of any series and Coupons appertaining thereto which are payable in Dollars may be made at an agency of the Issuer maintained in the Borough of Manhattan, The City of New York if such payment in Dollars at each agency
maintained by the Issuer outside the United States for payment on such Unregistered Securities is illegal or effectively precluded by exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the
Issuer in respect of the Securities of any series, the Coupons appertaining thereto or this Indenture may be served.
The Issuer will give
to the Trustee written notice of the location of each such office or agency and of any change of location thereof. In case the Issuer shall fail to give such notice of the location or of any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at a separate Agent for notices and demands.
The Issuer may from time to
time designate one or more additional offices or agencies where the Securities of a series and any Coupons appertaining thereto may be presented for payment, where the Securities of that series may be presented for exchange as provided in this
Indenture and pursuant to Section 2.03 and where the Registered Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from time to time rescind any such designation, as the
Issuer may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
Section 3.03. Appointment to Fill a Vacancy in Office of
Trustee
. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.09, a Trustee, so that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
Section 3.04. Paying Agents
. Whenever the Issuer shall appoint a paying agent other than the Trustee
with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series, or Coupons appertaining thereto, if any, or of the Trustee,
(b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make
any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and
(c) that it will
pay any such sums so held in trust by it to the Trustee upon the Trustee’s written request at any time during the continuance of the failure referred to in clause 3.04(b) above.
14
The Issuer will, on or prior to each due date of the principal of or interest on the Securities
of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the Securities of any series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series or the Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary
notwithstanding, but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.03 and 10.04.
Section 3.05. Written Statement to Trustee
. The Issuer will furnish to the
Trustee on or before March 31 in each year (beginning with March 31, 2016) a brief certificate (which need not comply with Section 11.05) from the principal executive, financial or accounting officer of the Issuer stating that in the
course of the performance by the signer of his duties as an officer of the Issuer he would normally have knowledge of any default or non-compliance by the Issuer in the performance of any covenants or conditions contained in this Indenture, stating
whether or not he has knowledge of any such default or non-compliance and, if so, specifying each such default or non-compliance of which the signer has knowledge and the nature thereof.
Section 3.06. Luxembourg Publications
. In the event of the publication of any notice pursuant to Section 5.11, 6.09(a), 6.10,
8.02, 10.04, 12.02 or 12.05, the party making such publication in the Borough of Manhattan, The City of New York and London shall also, to the extent that notice is required to be given to Holders of Securities of any series by applicable Luxembourg
law or stock exchange regulation, as evidenced by and subject to receipt of an Officer’s Certificate delivered to such party, make a similar publication in Luxembourg.
ARTICLE 4
S
ECURITYHOLDERS
L
ISTS
A
ND
R
EPORTS
B
Y
T
HE
I
SSUER
A
ND
T
HE
T
RUSTEE
Section 4.01. Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders
. If and so long as the Trustee
shall not be the Security registrar for the Securities of any series, the Issuer and any other obligor on the Securities will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than 15 days after each record date for the payment of interest on such
Registered Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Registered Securities in each year, and (b) at such other times as the Trustee may
request in writing, within thirty days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished.
Section 4.02. Preservation and Disclosure of Securityholders Lists
. This Section intentionally left blank.
Section 4.03. Reports by the Issuer
. The Issuer covenants to file with the Trustee copies of the annual reports and of the
information, documents, and other reports that the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 or pursuant to Section 314 of the Trust Indenture Act
of 1939; provided that any such annual reports, information, documents or other reports need not be filed with the Trustee until the 15
th
day after the same are actually filed with the Commission.
15
Section 4.04. Reports by the Trustee
. Any Trustee’s report required under
Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before January 15 in each year beginning January 15, 2016, as provided in Section 313(c) of the Trust Indenture Act of 1939, so long as any Securities
are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee no more than 60 days prior thereto.
ARTICLE 5
R
EMEDIES
O
F
T
HE
T
RUSTEE
A
ND
S
ECURITYHOLDERS
O
N
E
VENT
O
F
D
EFAULT
Section 5.01. Event of Default Defined; Acceleration of Maturity; Waiver of Default
. “
Event of Default
” with
respect to Securities of any series (unless otherwise specified with respect to such series of Securities in the supplemental indenture, Board Resolution or other instrument authorizing such series of Securities) wherever used herein, means each one
of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental body):
(a) a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Issuer in an involuntary proceeding under any applicable United States bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or for all or any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(b) the Issuer shall commence a voluntary proceeding under any applicable United
States bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or for all or any substantial part of its property, or make any general assignment for the benefit of creditors;
(c) the Issuer shall have taken any corporate action in furtherance of any of the matters referred to in subsection (b) above; or
(d) any other Event of Default provided with respect to Securities of such series in the supplemental indenture, Board Resolution or other
instrument authorizing such series.
Unless otherwise provided as contemplated by Section 2.03 with respect to any series of
Securities, if an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then, and in every such case, the principal amount (or, if any of the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all of the Securities of that series shall become and be immediately due and payable without any declaration or other action on the part
of the Trustee or any Holder.
The foregoing provisions, however, are subject to the condition that if, at any time after the principal
(or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of any series shall have been so declared due and payable, and before any judgment or decree for
the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series and
the principal of any and all Securities of each such series which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of each such series (or at the respective rates of interest or Yields to
Maturity of all the Securities, as the case may be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, its agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of the Trustee’s negligence or willful misconduct, and if any and all Events of Default under the Indenture,
other than the
non-payment
of the principal of
16
Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein and in every such case the Holders of a majority in aggregate
principal amount of all the Securities of each such series, then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to each such series and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all
purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together
with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section 5.02. Collection of Indebtedness by Trustee; Trustee may Prove Debt
. The Issuer covenants that (a) in case default
shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default
shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration
or otherwise—then upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series, and
such Coupons, for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or willful misconduct.
Until such demand is made by the Trustee, the Issuer
may pay the principal of and interest on the Securities of any series to the Holders, whether or not the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Securities, wherever situated the moneys adjudged or decreed to be
payable.
In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11
of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities, or to the creditors or property of the Issuer
or such other obligor, the Trustee, irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant
to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(i)
to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series)
owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by
17
the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor
upon the Securities, or to the creditors or property of the Issuer or such other obligor,
(ii) unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings, and
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except
as a result of its negligence or willful misconduct.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or
consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series or Coupons appertaining to
such Securities, may be enforced by the Trustee without the possession of any of the Securities of such series or Coupons appertaining to such Securities or the production thereof on any trial or other proceedings relative thereto, and any such
action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities or Coupons appertaining to such Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which
the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities or Coupons appertaining to such Securities in respect to which such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such proceedings.
Section 5.03. Application of Proceeds
.
Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or
interest, upon presentation of the several Securities and Coupons appertaining to such Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced
principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series in respect of which moneys have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith;
SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have
become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
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THIRD: In case the principal of the Securities of such series in respect of which moneys have
been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the
extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such
series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or Yield to Maturity, without preference or priority of
principal over interest or Yield to Maturity, or of interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series,
ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the
remainder, if any, to the Issuer or any other Person lawfully entitled thereto.
Section 5.04. Suits for Enforcement
. In case
a Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.05. Restoration of Rights on Abandonment of Proceedings
. In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such proceedings had been taken.
Section 5.06. Limitations on Suits by Securityholders
. No Holder of any Security of any series or of any Coupon appertaining
thereto shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment
of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to a Responsible Officer of the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, stating that such notice is a “
Notice of Default
,” and identifying the Issuer and the series of Securities to which the notice applies and unless also the Holders of not less than 25% in aggregate
principal amount of the Securities of the affected series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any
such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being expressly covenanted by the taker and Holder of every
Security or Coupon with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series or Coupons appertaining to such Securities shall have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities or Coupons appertaining to such Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series and Coupons appertaining to such Securities. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
“Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) unless it is specifically deleted or modified in the supplemental indenture, if any, under which such series of Securities is issued: (a) default in the payment of any installment of interest upon any of the
Securities of such series as and when the same shall become due and payable,
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and continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal on any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or (c) failure on the part of the Issuer duly to observe or perform any other of the covenants or agreements on the part of the Issuer in the
Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in the performance or breach of which is elsewhere in this Section or in Section 5.01 specifically dealt with) or contained in
this Indenture for a period of 60 days after the date on which written notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Issuer remedy the same, shall have been given by
registered or certified mail, return receipt requested, to the Issuer by the Trustee, or to the Issuer and the Trustee by the holders of at least 25% in aggregate principal amount of the Outstanding Securities of all series affected thereby; or
(d) an Event of Default with respect to such series specified in Section 5.01; or (e) any other Default provided in the supplemental indenture under which such series of Securities is issued or in the form of Security for such series.
Section 5.07. Unconditional Right of Securityholders to Institute Certain Suits
. Notwithstanding any other provision in this
Indenture and any provision of any Security, the right of any Holder of any Security or Coupon to receive payment of the principal of and interest on such Security or Coupon on or after the respective due dates expressed in such Security or Coupon,
or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 5.08. Powers and Remedies Cumulative; Delay or Omission not Waiver of Default
. Except as provided in Section 5.06, no
right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities or Coupons is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or Coupons to
exercise any right or power accruing upon any Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Default or an acquiescence therein; and, subject to Section 5.06,
every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities or Coupons may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities or
Coupons.
Section 5.09. Control by Holders of Securities
. The Holders of a majority in aggregate principal amount of the
Securities of a series at the time Outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to
the Securities of such series by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 6.01) the
Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith
shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being
understood that (subject to Section 6.01) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is
not inconsistent with such direction or directions by Securityholders.
Section 5.10. Waiver of Past Defaults
. Except as
otherwise provided in this Section 5.10, the Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding may, on behalf of the Holders of all such Securities of such series, waive any past or
continuing Default, including any Event of Default described in Section 5.01, and its consequences; provided, however that any such waiver with respect to an Event of Default described in Section 5.01 must occur prior to the acceleration
of the maturity of the affected series of
20
Securities as provided in Section 5.01. In the case of any such waiver, the Issuer, the Trustee and the Holders of all such Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Upon
any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Defaults or Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of
this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.
Notwithstanding the foregoing in this Section 5.10, a default in the payment of principal or interest or a default in respect of a
covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security affected, and the consequences of such defaults, may not be waived.
Section 5.11. Trustee to Give Notice of Default; But May Withhold in Certain Circumstances
. The Trustee shall, within 90 days
after the occurrence of a default with respect to the Securities of any series, give notice of all defaults with respect to that series known to the Trustee (i) if any Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, (A) by mail to such Holders who have filed their names and addresses with the Trustee within the two years preceding the notice at such addresses as were so furnished to the Trustee and (B) either through the customary
notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are owned if such Unregistered Securities are held only in global form or by publication at least once in an Authorized Newspaper
in the Borough of Manhattan, The City of New York, and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in an Authorized Newspaper in Luxembourg), and (ii) if any Registered Securities of
a series affected are then Outstanding, by mailing notice to the Holders of then Outstanding Registered Securities of each series affected at their addresses as they shall appear on the registry books, unless in each case such defaults shall have
been cured before the mailing or publication of such notice (the term “defaults” for the purpose of this Section being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, a Default
or an Event of Default); provided that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund installment on such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders of such series.
Section 5.12. Right of Court to Require Filing of Undertaking
to Pay Costs
. All parties to this Indenture agree, and each Holder of any Security or Coupon by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this
Section shall not apply (i) to any suit instituted by the Trustee, (ii) to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the
Securities of such series, or, in the case of any suit relating to or arising under clause 5.01(a) or (b), 10% in aggregate principal amount of all Securities then Outstanding, or (iii) to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of or interest on any Security on or after the due date expressed in such Security or any date fixed for redemption.
ARTICLE 6
C
ONCERNING
T
HE
T
RUSTEE
Section 6.01. Duties And Responsibilities of the Trustee; During Default; Prior to Default
. With respect to the Holders of any
series of Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the curing or waiving of all Events of Default which may have occurred with respect to
such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived) the Trustee
shall exercise with respect to such series of Securities such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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No provision of this Indenture shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event
of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the Securities of any series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case
of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.09 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it. The provisions of this Section 6.01 are in furtherance of and subject to Section 315 of the Trust Indenture Act of 1939.
Section 6.02. Certain Rights of the Trustee
. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to
Section 6.01:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution,
Officer’s Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned herein shall be
sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
22
(e) the Trustee shall not be liable for any action taken or omitted by it in good faith and
believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the
occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than 25% in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder;
(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and
(i) The Trustee shall not be deemed to have notice of any Default or Event of Default unless (i) written notice of any event which is in
fact such a default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture or (ii) a Responsible Officer of the Trustee has actual
knowledge of any such Default or Event of Default .
Section 6.03. Trustee Not Responsible for Recitals, Disposition of Securities
or Application of Proceeds Thereof
. The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities or Coupons. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities
or of the proceeds thereof.
Section 6.04. Trustee and Agents May Hold Securities or Coupons; Collections, etc
. The Trustee or
any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent.
Section 6.05. Moneys Held by Trustee
. Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder.
Section 6.06. Compensation and Indemnification of Trustee and its Prior Claim
. The Issuer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay
or reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of all agents and other Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct. The
Issuer also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including the costs and expenses of defending itself
23
against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall
be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities or Coupons, and the Securities are hereby
subordinated to such senior claim.
Section 6.07. Right of Trustee to Rely on Officer’s Certificate, etc
. Subject to
Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s
Certificate delivered to the Trustee, and such certificate, in the absence of negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
Section 6.08. Persons Eligible for Appointment as Trustee
. The Trustee for each series
of Securities hereunder shall at all times be a corporation or national banking association organized and doing business under the laws of the United States of America or of any State or the District of Columbia having a combined capital and surplus
of at least $5,000,000, and which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by Federal, State or District of Columbia authority. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.09.
The provisions of this Section 6.08 are in furtherance of and subject to Section 310(a) of the
Trust Indenture Act of 1939.
Section 6.09. Resignation and Removal; Appointment of Successor Trustee
. (a) The Trustee,
or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and (i) if any Unregistered Securities of a series affected are
then Outstanding, by giving notice of such resignation to the Holders thereof (A) by mail to such Holders who have filed their names and addresses with the Trustee within the two years preceding the notice at such addresses as were so furnished
to the Trustee and (B) either through the customary notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are owned if such Unregistered Securities are held only in global form or
by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in an Authorized Newspaper in
Luxembourg), and (ii) if any Registered Securities of a series affected are then Outstanding, by mailing notice of such resignation to the Holders of then Outstanding Registered Securities of each series affected at their addresses as they
shall appear on the registry books. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the
Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted
appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide
Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 5.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
24
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect
to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 6.08 and Section 310(a) of
the Trust Indenture Act of 1939 and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor
trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Securities of each
series at the time outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Issuer the evidence provided for in Section 7.01 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.09 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.10.
Section 6.10. Acceptance of Appointment by Successor Trustee
. Any successor trustee appointed as provided in Section 6.09
shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named
as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to Section 10.04, pay over to the
successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer
shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or
funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.06.
If a successor
trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect to the Securities of any series as to which the
predecessor trustee is not retiring shall continue to be vested in the predecessor trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts under
separate indentures.
25
No successor trustee with respect to any series of Securities shall accept appointment as
provided in this Section 6.10 unless at the time of such acceptance such successor trustee shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.08.
Upon acceptance of appointment by any successor trustee as provided in this Section 6.10, the Issuer shall give notice thereof
(i) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof, (A) by mail to such Holders who have filed their names and addresses with the Trustee within the two years preceding the notice at such
addresses as were so furnished to the Trustee and (B) either through the customary notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are owned if such Unregistered Securities
are held only in global form or by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in
an Authorized Newspaper in Luxembourg), and (ii) if any Registered Securities of a series affected are then Outstanding, by mailing notice to the Holders of then Outstanding Registered Securities of each series affected at their addresses as
they shall appear on the registry books. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 6.09. If
the Issuer fails to give such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Trustee
. Any Person into which the Trustee may be
merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided that such Person shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.08, without the
execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of any series
shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities
of any series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have
the full force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 6.12. Appointment of Authenticating Agent
. As long as any Securities of a series remain Outstanding, the Trustee may, by
an instrument in writing, appoint with the approval of the Issuer an authenticating agent (the “Authenticating Agent”) which shall be authorized to act on behalf of the Trustee to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to Section 2.09. Securities of each such series authenticated by such Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made in this Indenture to the authentication and delivery of Securities of any series by the Trustee or to the Trustee’s Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent for such series and a Certificate of Authentication executed on behalf of the Trustee by such Authenticating Agent. Such Authenticating Agent
shall at all times be a Person organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000
(determined as provided in Section 6.08 with respect to the Trustee) and subject to supervision or examination by Federal or State authority.
Any Person into which any Authenticating Agent may be merged or converted, or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any Person succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent with respect to all
series of Securities for which it served as Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent. Any Authenticating Agent may at any time, and if it shall cease
to be eligible shall, resign by giving written notice of resignation to the Trustee and to the Issuer.
26
Upon receiving such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.12 with respect to one or more series of Securities, the Trustee shall upon receipt of an Issuer Order appoint a successor Authenticating
Agent and the Issuer shall provide notice of such appointment to all Holders of Securities of such series in the manner and to the extent provided in Section 11.04. Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent for such series from time to
time reasonable compensation. The Authenticating Agent for the Securities of any series shall have no responsibility or liability for any action taken by it as such at the direction of the Trustee.
Sections 6.02, 6.03, 6.04, 6.06 and 7.03 shall be applicable to any Authenticating Agent.
ARTICLE 7
C
ONCERNING
T
HE
S
ECURITYHOLDERS
Section 7.01. Evidence of Action Taken by Securityholders
. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the Issuer, if made in
the manner provided in this Article.
Section 7.02. Proof of Execution of Instruments and of Holding of Securities
. Subject to
Sections 6.01 and 6.02, the execution of any instrument by a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument may be proved by the certificate of any notary public or other officer
of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the person executing such instruments acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute sufficient proof of the authority of the person executing the same. The fact of
the holding by any Holder of an Unregistered Security of any series, and the identifying number of such Security and the date of his holding the same, may be proved by the production of such Security or by a certificate executed by any trust
company, bank, banker or recognized securities dealer wherever situated satisfactory to the Trustee, if such certificate shall be deemed by the Trustee to be satisfactory. Each such certificate shall be dated and shall state that on the date thereof
a Security of such series bearing a specified identifying number was deposited with or exhibited to such trust company, bank, banker or recognized securities dealer by the Person named in such certificate. Any such certificate may be issued in
respect of one or more Unregistered Securities of one or more series specified therein. The holding by the Person named in any such certificate of any Unregistered Securities of any series specified therein shall be presumed to continue for a period
of one year from the date of such certificate unless at the time of any determination of such holding (1) another certificate bearing a later date issued in respect of the same Securities shall be produced, or (2) the Security of such
series specified in such certificate shall be produced by some other Person, or (3) the Security of such series specified in such certificate shall have ceased to be Outstanding. Subject to Sections 6.01 and 6.02, the fact and date of the
execution of any such instrument and the amount and numbers of Securities of any series held by the Person so executing such instrument and the amount and numbers of any Security or Securities for such series may also be proven in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee for such series or in any other manner which the Trustee for such series may deem sufficient.
27
(b) In the case of Registered Securities, the ownership of such Securities shall be proved by the
Security register or by a certificate of the Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Registered Securities of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any time or from time to time by notice to the Trustee, for any date or dates (in
the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, with respect to Registered Securities
of any series, only Holders of Registered Securities of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent.
Section 7.03. Holders to be Treated as Owners
. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and
treat the Person in whose name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary. The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Holder of any Unregistered Security and the Holder of any Coupon as the absolute owner of
such Unregistered Security or Coupon (whether or not such Unregistered Security or Coupon shall be overdue) for the purpose of receiving payment thereof or on account thereof and for all other purposes and neither the Issuer, the Trustee, nor any
agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such Person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge
the liability for moneys payable upon any such Unregistered Security or Coupon.
Section 7.04. Securities Owned by Issuer Deemed
Not Outstanding
. In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by
the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of
any of the above-described Persons; and, subject to Sections 6.01 and 6.02, the Trustee shall be entitled to accept such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not
listed therein are Outstanding for the purpose of any such determination.
Section 7.05. Right of Revocation of Action Taken
.
At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may
be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder of any Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in
regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.
28
ARTICLE 8
S
UPPLEMENTAL
I
NDENTURES
Section 8.01. Supplemental Indentures Without Consent of Securityholders
. The Issuer, when authorized by a resolution of its Board
of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a) to convey,
transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(b) to
evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer pursuant to Article 9;
(c) to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to
the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective
or inconsistent with any other provision contained herein or in any supplemental indenture, or to make any other provisions as the Issuer may deem necessary or desirable, provided that no such action shall adversely affect the interests of the
Holders of the Securities or Coupons;
(e) to establish the forms or terms of Securities of any series or of the Coupons appertaining to
such Securities as permitted by Sections 2.01 and 2.03; and
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Section 6.10.
The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall
not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of Section 8.02.
Section 8.02. Supplemental
Indentures With Consent of Securityholders
. With the consent (evidenced as provided in Article 7) of the Holders of not less than a majority in aggregate principal amount of the Securities of any series at the time Outstanding, the Issuer,
when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such
29
action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of such series or of
the Coupons appertaining to such Securities; provided, that no such supplemental indenture shall, without the consent of the Holders of each Security so affected (a) extend the final maturity of any Security; (b) reduce the principal
amount thereof; (c) reduce the rate or extend the time of payment of interest thereon; (d) reduce any amount payable on redemption thereof; (e) make the principal thereof (including any amount in respect of original issue discount),
or interest thereon payable in any coin or currency other than that provided in the Securities and Coupons or in accordance with the terms thereof; (f) alter the provisions of Section 11.11 or 11.12; (g) modify the provisions of this
Indenture relating to the subordination of the Securities in a manner adverse to the Holders of such Securities; (h) impair or affect the right of any Securityholder to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment at the option of the Securityholder, in each case without the consent of the Holder of each Security so affected, or (i) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of
which is required for any such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of Holders of Securities of such series, or of Coupons appertaining to such Securities,
with respect to such covenant or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order) certified by the secretary or an assistant secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the Holders of the Securities as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with the Issuer in the
execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated
to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall give notice thereof (i) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof, (A) by mail to such Holders who have filed their names and addresses with the Trustee within the two
years preceding the notice at such addresses as were so furnished to the Trustee and (B) either through the customary notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are
owned if such Unregistered Securities are held only in global form or by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and at least once in an Authorized Newspaper in London (and, if required
by Section 3.06, at least once in an Authorized Newspaper in Luxembourg), (ii) if any Registered Securities of a series affected are then Outstanding, by mailing notice thereof by first class mail to the Holders of then Outstanding
Registered Securities of each series affected at their addresses as they shall appear on the registry books, and in each case such notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to
give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.
Section 8.03. Effect of Supplemental Indenture
. Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of
Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be
and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
30
Section 8.04. Documents to Be Given to Trustee
. The Trustee, subject to the
provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
Section 8.05. Notation on Securities in Respect of Supplemental Indentures
. Securities of any series
authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture
or as to any action taken by Securityholders. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.
Section 8.06. Effect on Senior Indebtedness
. No supplemental indenture shall directly or indirectly modify or eliminate the
provisions of Article 13 in any manner which might terminate or impair the subordination of the Securities of any series to any Senior Indebtedness, or adversely affect the rights of any holder of Senior Indebtedness, without the prior written
consent of the holders of such Senior Indebtedness.
ARTICLE 9
C
ONSOLIDATION
, M
ERGER
, S
ALE
O
R
C
ONVEYANCE
Section 9.01. Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions
. The Issuer covenants
that it will not merge or consolidate with any other Person or sell, lease or convey all or substantially all of its assets to any other Person, unless (i) either the Issuer shall be the continuing corporation, or the successor corporation or
the Person which acquires by sale, lease or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall be a corporation organized under the laws of the United States of America or any State thereof or the District of
Columbia and shall expressly assume the due and punctual payment of the principal of and interest on all the Securities and Coupons, if any, according to their tenor, and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Issuer, by supplemental indenture, executed and delivered to the Trustee by such corporation, and (ii) the Issuer, such Person or such successor corporation, as the case may be,
shall not, immediately after such merger or consolidation, or such sale, lease or conveyance, be in default in the performance of any such covenant or condition.
Section 9.02. Successor Corporation Substituted
. In case of any such consolidation, merger, sale, lease or conveyance, and
following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Issuer, with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which together with any Coupons appertaining thereto theretofore shall not have been signed by the Issuer and
delivered to the Trustee; and, upon the order of such successor corporation, instead of the Issuer, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities together with any Coupons appertaining thereto which previously shall have been signed and delivered by the officers of the Issuer to the Trustee for authentication, and any Securities which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued together with any Coupons appertaining thereto shall in all respects have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance such changes in phrasing and form (but not in substance) may be made in
the Securities and Coupons thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.
Section 9.03. Opinion of Counsel Delivered to Trustee
. The Trustee, subject to the
provisions of Sections 6.01 and 6.02, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and any such assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
31
ARTICLE 10
S
ATISFACTION
A
ND
D
ISCHARGE
O
F
I
NDENTURE
; U
NCLAIMED
M
ONEYS
Section 10.01. Satisfaction and Discharge of Indenture
. (a) If at any time (i) the Issuer
shall have paid or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder and all unmatured Coupons appertaining thereto (other than Securities of such series and Coupons appertaining thereto which
have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09) as and when the same shall have become due and payable, (ii) the Issuer shall have delivered to the Trustee for cancellation all
Securities of any series theretofore authenticated and all unmatured Coupons appertaining thereto (other than any Securities of such series and Coupons appertaining thereto which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09) or (iii) in the case of any series of Securities where the exact amount (including the currency of payment) of principal of and interest due can be determined at the time of making the deposit
referred to in clause (B) below, (A) all the Securities of such series and all unmatured Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption (or, in the case of Securities that do not bear a fixed interest rate,
within the remaining term of the then current interest period) and (B) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or
any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments on which may only be made in Dollars, direct obligations of the United States of America, backed by its full faith and
credit (“
U.S. Government Obligations
”), maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or a combination thereof, sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest on all Securities of such series and Coupons appertaining thereto on each date that such
principal or interest is due and payable and (2) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; and if, in any such
case, the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer with respect to the Securities of such series, then this Indenture shall cease to be of further effect with respect to the Securities of such series
and the Coupons appertaining thereto (except as to (i) rights of registration of transfer and exchange of Securities of such Series and of Coupons appertaining thereto and the Issuer’s right of optional redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the
original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) the
rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and (vi) the obligations of the Issuer under
Section 3.02) and the Trustee, on demand of the Issuer accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and
discharging this Indenture as to such series; provided, that the rights of Holders of the Securities and Coupons to receive amounts in respect of principal of and interest on the Securities and Coupons held by them shall not be delayed longer than
required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series.
(b) The following provisions shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution,
Officer’s Certificate, form of Security for such series or indenture supplemental hereto provided pursuant to Section 2.03. In addition to discharge of the Indenture pursuant to the next preceding paragraph, in the case of any series of
Securities the exact amounts (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (i) below, the Issuer shall be deemed to have paid and
discharged the entire indebtedness on all the Securities of such a series and the Coupons appertaining thereto on the 91
st
day after the date of the deposit referred to in clause (i)
below, and the
32
provisions of this Indenture with respect to the Securities of such series and Coupons appertaining thereto shall no longer be in effect (except as to (1) rights of registration of transfer
and exchange of Securities of such series and of Coupons appertaining thereto and the Issuer’s right of optional redemption, if any, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (3) rights
of Holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, (4) the rights, obligations, duties and immunities of the Trustee hereunder, (5) the rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of them and (6) the obligations of the Issuer under Section 3.02) and the Trustee, at the expense of the Issuer, shall at the Issuer’s request, execute proper
instruments acknowledging the same, if
(i) with reference to this provision the Issuer has irrevocably deposited or caused
to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series and Coupons appertaining thereto (A) cash in an
amount, or (B) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability
of cash or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest
on all Securities of such series and Coupons appertaining thereto on each date that such principal or interest is due and payable and (2) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;
(ii) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Issuer is a party or by which it is bound;
(iii) the Issuer has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Issuer has received
from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date hereof, there has been a change in the applicable Federal income tax law, in either case to the effect that, and such opinion shall confirm that,
the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on
the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and
(iv) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with.
(c) The following
provisions shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate, form of Security for such series or indenture supplemental hereto provided pursuant to
Section 2.03. The Issuer shall be released from its obligations under Section 9.01 with respect to the Securities of any Series, and any Coupons appertaining thereto, Outstanding on and after the date the conditions set forth below are
satisfied (hereinafter, “covenant defeasance”). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities of any Series, the Issuer may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in such Sections, whether directly or indirectly by reason of any reference elsewhere herein to such Sections or by reason of any reference in such Sections to any other provision herein or in any other
document and such omission to comply shall not constitute an Event of Default under Section 5.01, but the remainder of this Indenture and such Securities and Coupons shall be unaffected thereby. The following shall be the conditions to
application of this subsection (c) of this Section 10.01:
(i) The Issuer has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Securities of such series and Coupons
appertaining thereto, (A) cash in an amount, or (B) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (C) a combination thereof, sufficient, in the opinion of a nationally recognized
33
firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest on all Securities of such series and
Coupons appertaining thereto and (2) any mandatory sinking fund payments on the day on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series.
(ii) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to
the Securities shall have occurred and be continuing on the date of such deposit or, insofar as subsection 5.01(b) is concerned, at any time during the period ending on the 91
st
day after the
date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
(iii) Such covenant defeasance shall not cause the Trustee to have a conflicting interest for purposes of the Trust Indenture
Act of 1939 with respect to any securities of the Issuer.
(iv) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Issuer is a party or by which it is bound.
(v) Such covenant defeasance shall not cause any Securities then listed on any registered national securities exchange under
the Securities Exchange Act of 1934, as amended, to be delisted.
(vi) The Issuer shall have delivered to the Trustee an
Officer’s Certificate and Opinion of Counsel to the effect that the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
(vii) The Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the covenant defeasance contemplated by this provision have been complied with.
Section 10.02. Application by Trustee of Funds Deposited for Payment of Securities
. Subject to Section 10.04, all moneys
deposited with the Trustee (or other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own paying agent), to the Holders
of the particular Securities of such series and of Coupons appertaining thereto for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such
money need not be segregated from other funds except to the extent required by law.
Section 10.03. Repayment of Moneys Held by
Paying Agent
. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys.
Section 10.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years
. Any moneys deposited with or paid to the
Trustee or any paying agent for the payment of the principal of or interest on any Security of any series or Coupons attached thereto and not applied but remaining unclaimed for two years after the date upon which such principal or interest shall
have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or
such paying agent, and the Holder of the Securities of such series and of any Coupons appertaining thereto shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before
being required to make any such repayment with respect to moneys deposited with it for any payment (a) in respect of Registered Securities of any series, shall at the expense of the Issuer, mail by first-class mail to Holders of such Securities
at their addresses as they shall appear on the Security register, and (b) in respect of Unregistered
34
Securities of any series, shall at the expense of the Issuer either give through the customary notice provisions of the clearing system or systems through which beneficial interests in such
Unregistered Securities are owned if such Unregistered Securities are held only in global form or cause to be published once, in an Authorized Newspaper in the Borough of Manhattan, The City of New York and once in an Authorized Newspaper in London
(and if required by Section 3.06, once in an Authorized Newspaper in Luxembourg), notice, that such moneys remain and that, after a date specified therein, which shall not be less than thirty days from the date of such mailing or publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
Section 10.05. Indemnity for
U.S. Government Obligations
. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal
or interest received in respect of such obligations.
ARTICLE 11
M
ISCELLANEOUS
P
ROVISIONS
Section 11.01. Incorporators, Stockholders, Officers And Directors Of Issuer Exempt From Individual Liability
. No recourse under
or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly or through the Issuer or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities and the Coupons appertaining thereto by the Holders thereof and as part of the consideration for the issue of the Securities and the
Coupons appertaining thereto.
Section 11.02. Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities
and Coupons
. Nothing in this Indenture, in the Securities or in the Coupons appertaining thereto, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and
the Holders of the Securities or Coupons, if any, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders of the Securities or Coupons, if any.
Section 11.03. Successors and Assigns of
Issuer Bound by Indenture
. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.
Section 11.04. Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons
. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities or Coupons to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Discover Financial Services, 2500 Lake Cook Road, Riverwoods, Illinois 60015, Attention: Treasurer, with a copy to the General
Counsel. Any notice, direction, request or demand by the Issuer or any Holder of Securities or Coupons to or upon the Trustee shall be deemed to have been sufficiently given or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the Trustee is filed by the Trustee with the Issuer) to U.S. Bank National Association, 100 Wall Street 16
th
Floor; New
York, NY 10005, Attention: Corporate Trust Administration.
Where this Indenture provides for notice to Holders of Registered Securities,
such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his last address as it appears in the Security register. In the case of
Securities in global form, delivery is electronic per the applicable procedures of the Depositary. In any case where notice to such Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver.
35
In case, by reason of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice to the Issuer when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be reasonably satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 11.05. Officer’s Certificates and Opinions of Counsel; Statements to be Contained
Therein
. Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon
the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants filed with and directed to the Trustee shall contain a statement that
such firm is independent.
Section 11.06. Payments Due on Saturdays, Sundays or Holidays
. If the date of maturity of interest
on or principal of the Securities of any series or any Coupons appertaining thereto or the date fixed for redemption or repayment of any such Security or Coupon shall not be a Business Day, then payment of interest or principal need not be made on
such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.
Section 11.07. Conflict of any Provision of Indenture with Trust Indenture Act of 1939
. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act
of 1939, such imposed duties or incorporated provision shall control.
Section 11.08. NEW YORK LAW TO GOVERN
. THIS INDENTURE
AND EACH SECURITY AND COUPON SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, EXCEPT AS MAY OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS OF
LAW.
36
Section 11.09. Counterparts
. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.
Section 11.10. Effect Of Headings
. The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.11. Securities in a Foreign Currency
. Unless otherwise specified in an
Officer’s Certificate delivered pursuant to Section 2.03 of this Indenture with respect to a particular series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in
aggregate principal amount of Securities of all series or all series affected by a particular action at the time Outstanding and, at such time, there are Outstanding Securities of any series which are denominated in a coin or currency other than
Dollars, then the principal amount of Securities of such series which shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate. For
purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York. If such Market Exchange Rate is not
available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations from
one or more major banks in The City of New York or in the country of issue of the currency in question, or such other quotations as the Trustee shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent
principal amount in respect of Securities of a series denominated in a currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Issuer and all Holders.
Section 11.12. Judgment Currency
. The Issuer agrees, to the fullest extent that it may effectively do so under applicable law,
that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest on the Securities of any series (the “Required Currency”) into a currency in which a
judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The
City of New York or a day on which banking institutions in The City of New York are authorized or required by law or executive order to close.
37
ARTICLE 12
R
EDEMPTION
O
F
S
ECURITIES
A
ND
S
INKING
F
UNDS
Section 12.01. Applicability of Article
. The provisions of this Article shall be applicable to the Securities of any series which
are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.03 for Securities of such series.
Section 12.02. Notice of Redemption; Partial Redemptions
. Notice of redemption to the Holders of Registered Securities of any
series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, or in the case of Securities in global form, notice shall be delivered per the
applicable procedures of the Depositary, to such Holders of Securities of such series at their last addresses as they shall appear upon the registry books at least 10 days and not more than 30 days prior to the date fixed for redemption,
or within such other redemption notice period as has been designated for any Securities of such series pursuant to Section 2.03 or 2.04 (the “
Redemption Notice Period
”). Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and addresses with the Trustee within two years preceding such notice of redemption, shall be given by mailing notice of such redemption, by first class mail, postage
prepaid, at least 10 and not more than 30 days prior to the date fixed for redemption or within any applicable Redemption Notice Period to such Holders at such addresses as were so furnished to the Trustee (and, in the case of any such notice
given by the Issuer, the Trustee shall make such information available to the Issuer for such purpose). Notice of redemption to all other Holders of Unregistered Securities shall be published in an Authorized Newspaper in the Borough of Manhattan,
The City of New York and in an Authorized Newspaper in London (and, if required by Section 3.06, in an Authorized Newspaper in Luxembourg), in each case, once in each of three successive calendar weeks, the first publication to be not less than
10 nor more than 30 days prior to the date fixed for redemption or within any applicable Redemption Notice Period; provided that notice to Holders of Unregistered Securities held only in global form may be made, at the option of the Issuer,
through the customary notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are owned. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify, the
principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price (or if not then ascertainable, the manner of calculation thereof), the place or places of payment, that payment
will be made upon presentation and surrender of such Securities and, in the case of Securities with Coupons attached thereto, of all Coupons appertaining thereto maturing after the date fixed for redemption, that such redemption is pursuant to the
mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer’s request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the
notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in
Section 3.04) an amount of money or other property sufficient to redeem on the redemption date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 60 days prior to the date fixed for redemption or at least 10 days prior to the first day of any applicable Redemption Notice Period an Officer’s Certificate stating the
aggregate principal amount of Securities to be redeemed. In case of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to the giving of any notice
of redemption to Holders pursuant to this Section, an Officer’s Certificate stating that such restriction has been complied with.
If
less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner as is consistent with applicable procedures of the Depositary for Securities held in global form and by lot for definitive Securities. Securities
of such Series to be redeemed in whole or in part. Securities may be redeemed in part in
38
multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such
series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.
Section 12.03. Payment of Securities Called for Redemption
. If notice of redemption has been given as above provided, the
Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void, and, except as provided in Sections 6.05 and 10.04, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, together with all Coupons, if any, appertaining thereto maturing after the date fixed for redemption, said Securities or the specified portions thereof shall be paid and redeemed by the
Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that payment of interest becoming due on or prior to the date fixed for redemption shall be payable in the case of
Securities with Coupons attached thereto, to the Holders of the Coupons for such interest upon surrender thereof, and in the case of Registered Securities, to the Holders of such Registered Securities registered as such on the relevant record date
subject to the terms and provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
If any Security with Coupons attached thereto is surrendered for redemption and is not accompanied by all appurtenant
Coupons maturing after the date fixed for redemption, the surrender of such missing Coupon or Coupons may be waived by the Issuer and the Trustee, if there be furnished to each of them such security or indemnity as they may require to save each of
them harmless.
Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented.
Section 12.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption
. Securities shall be excluded from
eligibility for selection for redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given
as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer.
Section 12.05. Mandatory and Optional Sinking Funds
. The minimum amount of
any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of the Securities of
any series is herein referred to as an “optional sinking fund payment.” The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date.”
In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10, (b) receive credit for
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optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the
Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment date or the
30
th
day next preceding the last day of any applicable Redemption Notice Period relating to a sinking fund payment date for any series, the Issuer will deliver to the Trustee an
Officer’s Certificate (which need not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of
Securities of such series and the basis for such credit, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to
such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer’s Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officer’s Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such 60
th
day or 30
th
day, if applicable, to deliver such Officer’s Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date,
the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency) or a lesser sum in Dollars (or the equivalent thereof in any Foreign Currency) if the Issuer shall
so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued
interest to the date fixed for redemption. If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the
equivalent thereof in any Foreign Currency) is available. The Trustee shall select, in the manner provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb
said cash, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities shall be excluded from eligibility for
redemption under this Section if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at least 60 days prior to the sinking fund payment date or at least 30 days prior to the
last day of any applicable Redemption Notice Period relating to a sinking fund payment date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in
such Officer’s Certificate as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the
Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 12.02 (and with the effect provided in Section 12.03) for the redemption of Securities of
such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together
with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which
are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such
series at maturity.
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On or before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall
otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 5
and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 5.10 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities.
ARTICLE 13
S
UBORDINATION
O
F
S
ECURITIES
Section 13.01. Agreement to Subordinate
. The Issuer, for itself, its successors and assigns, covenants and agrees, and each Holder
of Securities issued hereunder and under any indenture supplemental hereto or pursuant to a Board Resolution and Officers’ Certificate (“
Additional Provisions
”) by such Holder’s acceptance thereof likewise covenants and
agrees, that all Securities issued pursuant to this Indenture shall be subject to the provisions of this Article 13; and each Holder of a Security, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Issuer of the principal of, and any premium and interest, if any, on, or any other amounts
due on the Securities of each series issued hereunder and under any Additional Provisions shall, to the extent and in the manner set forth in this Article 13, be subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness with respect to such series, whether outstanding at the date of this Indenture or thereafter incurred.
No provision
of this Article 13 shall prevent the occurrence of any default or Event of Default hereunder.
Section 13.02. Default on
Senior Indebtedness
.
In the event, and during the continuation, of any default by the Issuer in the payment of principal, premium,
interest or any other amount due on any Senior Indebtedness with respect to Securities of any series, or in the event that the maturity of any Senior Indebtedness with respect to Securities of any series has been accelerated because of a default,
then, in either case, no payment shall be made by the Issuer with respect to the principal (including redemption and sinking fund payments) of, or any premium or interest on, the Securities of such series or to acquire any of the Securities (except
sinking fund payments made with respect to Securities acquired by the Issuer prior to such default).
In the event that, notwithstanding
the foregoing, any payment shall be received by the Trustee, by any Holder or by any paying agent (or, if the Issuer is acting as its own paying agent, money for any such payment is segregated and held in trust) when such payment is prohibited by
the preceding paragraph of this Section 13.02, before all Senior Indebtedness of the Issuer is paid in full, or provision is made for such payment in money in accordance with its terms, such payment shall be held in trust for the benefit of,
and shall be paid over or delivered to, the holders of such Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, ratably according to the aggregate amount remaining unpaid on account of the principal, premium, interest or any other payment due on the Senior Indebtedness held or represented by each, for application to the
payment of all Senior Indebtedness of the Issuer remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness, but only to the extent that the holders of such Senior Indebtedness (or
41
their representative or representatives or a trustee) notify the Trustee in writing within 90 days of such payment of the amounts then due and owing on such Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of such Senior Indebtedness.
Section 13.03.
Liquidation; Dissolution; Bankruptcy
. Upon any payment by the Issuer or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Issuer, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness with respect to the Securities of any series shall first be paid in full,
or payment thereof provided for in money in accordance with its terms, before any payment is made by the Issuer on account of the principal of, and premium or interest, if any, on, the Securities of such series; and upon any such dissolution,
winding-up, liquidation or reorganization, or in any such bankruptcy, insolvency, receivership or other proceeding, any payment by the Issuer, or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities,
which the Holders or the Trustee would be entitled to receive from the Issuer, except for the provisions of this Article 13, shall be paid by the Issuer or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under this Indenture if received by them or it, directly to the holders of such Senior Indebtedness (
pro rata
to such holders on the basis of the respective amounts
of such Senior Indebtedness held by such holders, as calculated by the Issuer) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may
have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money’s worth, after giving effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness, before any payment or distribution is made to the Holders of the Securities of such series or to the Trustee.
In the
event that, notwithstanding the foregoing, any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, prohibited by the foregoing shall be received by the Trustee, by any Holder or by any
paying agent (or, if the Issuer is acting as its own paying agent, money for any such payment is segregated and held in trust) before all such Senior Indebtedness is paid in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, ratably according to the aggregate amount remaining unpaid on account of the principal, premium, interest
or any other payment due on the Senior Indebtedness held or represented by each, as calculated by the Issuer, for application to the payment of all such Senior Indebtedness remaining unpaid to the extent necessary to pay such Senior Indebtedness in
full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article 13, the words “cash, property or securities” shall not be deemed to include shares of stock of the
Issuer as reorganized or readjusted, or securities of the Issuer or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 13 with
respect to the Securities of the relevant series to the payment of all Senior Indebtedness with respect to the Securities of such series that may at the time be outstanding;
provided
, that (i) such Senior Indebtedness is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Issuer with, or the merger of the Issuer into, another Person or the liquidation or dissolution of the Issuer following the conveyance, transfer or lease of its property as an entirety, or substantially as an entirety, to
another Person upon the terms and conditions provided for in Sections 9.01 and 9.02 of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 13.03 if such other Person
shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Sections 9.01 and 9.02 of this Indenture. Nothing in Section 13.02 or in this Section 13.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06 of this Indenture.
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Section 13.04. Subrogation
.
Subject to the payment in full of all Senior Indebtedness with respect to the Securities of any series, the rights of the Holders of the
Securities of such series shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities of the Issuer applicable to such Senior Indebtedness by virtue or such
subrogation until the principal of, and any premium and interest, if any, on, the Securities of such series shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of
any cash, property or securities to which the Holders or the Trustee would be entitled except for the provisions of this Article 13, and no payment over pursuant to the provisions of this Article 13 to or for the benefit of the holders of
such Senior Indebtedness by Holders of the Securities of such series or the Trustee, shall, as between the Issuer, its creditors other than holders of such Senior Indebtedness, and the Holders of the Securities of such series, be deemed to be a
payment by the Issuer to or on account of such Senior Indebtedness. It is understood that the provisions of this Article 13 are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities of each
series, on the one hand, and the holders of the Senior Indebtedness with respect to the Securities of such series on the other hand.
Nothing contained in this Article 13 or elsewhere in this Indenture, any Additional Provisions or in the Securities of any series is
intended to or shall impair, as between the Issuer, its creditors other than the holders of Senior Indebtedness with respect to the Securities of such series, and the Holders of the Securities of such series, the obligation of the Issuer, which is
absolute and unconditional, to pay to the Holders of the Securities of such series the principal of, and any premium and interest, if any, on, the Securities of such series as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders of the Securities of such series and creditors of the Issuer, other than the holders of such Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the Holder of any Security of such series from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 13 of the holders of such Senior Indebtedness in
respect of cash, property or securities of the Issuer, as the case may be, received upon the exercise of any such remedy.
Upon any
payment or distribution of assets of the Issuer referred to in this Article 13, the Trustee, subject to the provisions of Article 6 of this Indenture, and the Holders shall be entitled to conclusively rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of the Securities of any series, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness with respect to the Securities of
such series and other indebtedness of the Issuer, as the case may be, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 13.
Section 13.05. Trustee to Effectuate Subordination
.
Each Holder of Securities by such Holder’s acceptance thereof authorizes and directs the Trustee on such Holder’s behalf to take such
action as may be necessary or appropriate to effectuate the subordination provided in this Article 13 and appoints the Trustee such Holder’s attorney-in-fact for any and all such purposes.
Section 13.06. Notice by the Issuer
.
The Issuer shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Issuer that would prohibit the
making of any payment of monies to or by the Trustee in respect of the Securities of any series pursuant to the provisions of this Article 13. Notwithstanding the provisions of this Article 13 or any other provision of this Indenture or
any Additional Provisions, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities of any series pursuant to the
provisions of this Article 13, unless and until a Responsible Officer of the Trustee shall have received written notice thereof from the Issuer or a holder or holders of Senior Indebtedness with respect to the Securities of such series or from
any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Article 6 of this Indenture, shall be entitled in all respects to assume that no such facts exist;
provided
,
however
, that if the Trustee shall not have received the notice provided for in this Section 13.06 at least two Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of, any premium or interest on, any Security of such series), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and
to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date.
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The Trustee, subject to the provisions of Article 6 of this Indenture, shall be entitled to
conclusively rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness with respect to the Securities of any series (or a trustee on behalf of such holder), to establish that such notice
has been given by a holder of such Senior Indebtedness (or a trustee on behalf of any such holder or holders). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a
holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article 13, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 13, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Issuer referred to in this Article 13, the Trustee and the Holders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities of any series, for the
purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness with respect to the Securities of such series and other indebtedness of the Issuer, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 13.
Section 13.07. Rights of the Trustee; Holders of Senior Indebtedness
.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 13 in respect of any Senior
Indebtedness with respect to the Securities of any series at any time held by it, to the same extent as any other holder of such Senior Indebtedness, and nothing in this Indenture or any Additional Provisions shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in this Article 13, and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture or any Additional Provisions
against the Trustee. By virtue of this Article 13, the Trustee shall not be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Article 6 of this Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Holders of the Securities of such series, the Issuer or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled.
Nothing in this Article 13 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06.
Section 13.08. Subordination May Not Be Impaired
.
No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Issuer, or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the
generality of the foregoing paragraph, the holders of Senior Indebtedness with respect to the Securities of any series may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of Securities of such
series, without incurring responsibility to such Holders and without impairing or releasing the subordination provided in this Article 13 or the obligations hereunder of the Holders of
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the Securities of such series to the holders of such Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any Person liable in any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Issuer and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and attested, all as of September 8, 2015.
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DISCOVER FINANCIAL SERVICES
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as Issuer
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By:
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/s/ Timothy Schmidt
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Name:
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Timothy Schmidt
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Title:
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Assistant Treasurer
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U.S. BANK NATIONAL ASSOCIATION
as
Trustee
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By:
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/s/ K. Wendy Kumar
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Name:
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K. Wendy Kumar
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Title:
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Vice President
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