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EXHIBIT 1.1
DISCOVER CARD MASTER TRUST I
Credit Card Pass-Through Certificates
Underwriting Agreement
(Standard Terms)
[-------------]
XXXXXX XXXXXXX & CO. INCORPORATED
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Discover Bank (formerly Greenwood Trust Company) ("Discover"), as
originator of Discover Card Master Trust I (the "Trust"), proposes, subject to
the terms and conditions stated herein, to cause to be issued and sold from time
to time Credit Card Pass-Through Certificates (the "Certificates") in one or
more series (each, a "Series"). The Certificates of each Series will consist of
one or more Classes (each, a "Class") of Certificates of such Series. Each
Certificate will evidence a fractional, undivided percentage interest or
beneficial interest in the Trust. The Certificates will be issued by the Trust
pursuant to a Pooling and Servicing Agreement, dated as of October 1, 1993, as
amended, and as supplemented by a Series Supplement relating to the specific
Series of Certificates issued thereunder (the Pooling and Servicing Agreement,
as so supplemented, the "Pooling and Servicing Agreement"), between Discover as
Master Servicer, Servicer and Seller and U.S. Bank National Association
(formerly First Bank National Association, successor trustee to Bank of America
Illinois, formerly Continental Bank, National Association), as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Pooling and Servicing Agreement.
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Each offering of each Class of each Series of Certificates to which
this Agreement applies (the "Securities") made pursuant to the Registration
Statement (as defined herein) will be made through you or through you and other
underwriters for whom you are acting as representatives or through an
underwriting syndicate managed by you. Whenever Discover determines to make such
an offering of Securities to which this Agreement shall apply, Discover and one
or more Underwriters (as defined herein) will enter into an agreement (the
"Terms Agreement") providing for the sale of the Securities to, and the purchase
and offering thereof by, (i) you, (ii) you and such other underwriters who
execute the Terms Agreement and agree thereby to become obligated to purchase
the Securities from Discover, or (iii) you and such other underwriters, if any,
selected by you as have authorized you to enter into such Terms Agreement on
their behalf (in each case, the "Underwriters"). Such Terms Agreement shall
specify the initial principal amount of the Securities to be issued and their
terms not otherwise specified in this Agreement, the price at which such
Securities are to be purchased by the Underwriters from Discover, the aggregate
amount of Securities to be purchased by you and any other Underwriter that is a
party to such Terms Agreement and the initial public offering price or the
method by which the price at which such Securities are to be sold will be
determined. The Terms Agreement ("Terms Agreement"), which shall be
substantially in the form attached hereto, may take the form of an exchange of
any standard form of written communication between or among the Underwriters and
Discover. Each such offering of the Securities for which a Terms Agreement is
entered into will be governed by this Agreement, as supplemented by the
applicable Terms Agreement, and this Agreement and such Terms Agreement shall
inure to the benefit of and be binding upon the Underwriters participating in
the offering of such Securities.
1. Discover represents and warrants to, and agrees with you, as
of the date hereof, and to each Underwriter named in the Terms Agreement as of
the date thereof, that:
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(a) A registration statement on Form S-3 (Registration
Statement No. [________]) including a prospectus and such amendments thereto as
may have been required to the date hereof, relating to the Certificates and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"), in the form heretofore delivered
to you has been filed with the Securities and Exchange Commission (the
"Commission") (which may have included one or more preliminary prospectuses and
prospectus supplements (each, a "Preliminary Prospectus") meeting the
requirements of Rule 430 of the Act) and such registration statement, as
amended, has become effective; such registration statement, as amended, and the
prospectus and prospectus supplement relating to the sale of the Securities
offered thereby constituting a part thereof, as from time to time amended or
supplemented (including any prospectus and prospectus supplement filed with the
Commission pursuant to Rule 424(b) of the Act) are respectively referred to
herein as the "Registration Statement," the "Basic Prospectus" and the
"Prospectus Supplement" and the Basic Prospectus together with the Prospectus
Supplement relating to the Securities is hereinafter referred to as the
"Prospectus"; the conditions of Rule 415 under the Act have been satisfied with
respect to the Registration Statement; and no other amendment to the
Registration Statement will be filed which shall be reasonably disapproved by
you promptly after reasonable notice thereof.
(b) There is no request by the Commission for any further
amendment of the Registration Statement or the Prospectus or for any additional
information; the Commission has not issued any stop order suspending the
effectiveness of the Registration Statement and Discover is not aware of any
proceeding for that purpose having been instituted or threatened; and there has
been no notification with respect to the suspension of the qualification for
sale of the Certificates for sale in any jurisdiction or any proceeding for such
purpose having been instituted or threatened.
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(c) As of the date of the Terms Agreement, when the
Registration Statement became effective, when the Prospectus Supplement is first
filed pursuant to Rule 424(b) under the Act, when any other amendment to the
Registration Statement becomes effective, and when any supplement to the
Prospectus Supplement is filed with the Commission, and at the Time of Delivery
(as defined in Section 4), the Registration Statement and the Prospectus (i)
conformed, and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and (ii) will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
Discover by an Underwriter through you expressly for use therein.
(d) Upon payment therefor as provided herein and in the
Terms Agreement, the Securities will have been duly and validly authorized and
(assuming their due authentication by the Trustee) will have been duly and
validly issued and will conform in all material respects to the description
thereof in the Prospectus and will be entitled to the benefits of the Pooling
and Servicing Agreement.
(e) The issue and sale of the Securities and the
compliance by Discover with all of the provisions of the Securities, the Pooling
and Servicing Agreement, this Agreement and the Terms Agreement have been or
will have been duly authorized by Discover by all necessary corporate action;
and will not conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling and Servicing
Agreement, result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Discover or NOVUS Credit
Services Inc. ("NOVUS"), material to
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Discover and NOVUS (whether or not consolidated) considered as a whole, pursuant
to the terms of, any indenture, loan agreement or other agreement or instrument
for borrowed money to which Discover or NOVUS is a party or by which Discover or
NOVUS may be bound or to which any of the property or assets of Discover or
NOVUS, material to Discover and NOVUS (whether or not consolidated) considered
as a whole, is subject, nor will such action result in any material violation of
the provisions of the Certificate of Incorporation or By-Laws of Discover or, to
the best of Discover's knowledge, any statute or any order, rule or regulation
applicable to Discover of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over Discover, and no
consent, approval, authorization or other order of, or filing with, any court or
any such regulatory authority or other governmental body is required for the
issue and sale of the Securities except as may be required under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and securities
laws of the various states and other jurisdictions which are applicable to the
issue and sale of the Securities and except for the filing of any financing or
continuation statement required to perfect or continue the Trust's interest in
the Receivables.
(f) The Principal Receivables conveyed by Discover to the
Trust under the Pooling and Servicing Agreement had an aggregate outstanding
balance determined as of the date stated in the Terms Agreement of not less than
the amount set forth in the Terms Agreement; and
(g) The Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Trust is not required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
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2. Subject to the terms and conditions herein set forth, Discover
agrees to cause to be issued and sold to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from Discover,
at the purchase price specified in the Terms Agreement, the principal amount of
Securities set forth in the Terms Agreement.
3. (a) From time to time, after the Registration Statement
becomes effective, the several Underwriters propose to offer the Securities for
sale upon the terms and conditions set forth in the Prospectus.
(b) Each Underwriter severally represents and agrees that
it will not offer or sell or deliver any of the Securities in any jurisdiction
except under circumstances that will result in compliance with the applicable
laws thereof, and without limiting the foregoing, each Underwriter severally
represents and agrees that (i) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom; (ii) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
or who is a person to whom the document may otherwise lawfully be issued or
passed on; (iii) if it is an authorized person under Chapter III of Part I of
the Financial Services Xxx 0000, it has only promoted and will only promote (as
that term is defined in Regulation 1.02 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the
scheme described in the Prospectus Supplement if that person is of a kind
described either in Section 76(2) of the Financial Services Xxx 0000 or in
Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes)
Regulation 1991; and (iv) it is a person of a kind described
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in Article 11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996.
(c) Each Underwriter, severally, represents that it will
not, at any time that such Underwriter is acting as an "underwriter" (as defined
in Section 2(11) of the Act) with respect to the Securities, transfer, deposit
or otherwise convey any Securities into a trust or other type of special purpose
vehicle that issues securities or other instruments backed in whole or in part
by, or that represents interests in, such Securities without the prior written
consent of Discover.
4. Securities to be purchased by each Underwriter hereunder and
under the Terms Agreement shall be delivered by or on behalf of Discover to you
for the account of such Underwriter, against payment by such Underwriter or on
its behalf of the purchase price thereof in immediately available funds. Unless
otherwise specified in the Terms Agreement, such delivery shall occur at the
office of Xxxxxx & Xxxxxxx, Chicago, Illinois or such other place as you and
Discover may agree upon in writing. The time and date of such delivery shall be
set forth in the Terms Agreement or at such other time and date as you and
Discover may agree upon in writing, such time and date being herein called the
"Time of Delivery." Unless otherwise specified in the Terms Agreement, the
Securities shall be represented by definitive certificates, registered in the
name of Cede & Co., as nominee for The Depository Trust Company. Such definitive
certificates will be made available for inspection at least twenty-four hours
prior to the Time of Delivery at the office of the Trustee, 000 Xxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
5. Discover agrees with each of the Underwriters:
(a) Immediately following the execution of each Terms
Agreement, Discover will prepare a Prospectus Supplement setting forth the
amount of Securities covered
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thereby and the terms thereof not otherwise specified in the Basic Prospectus,
the price at which such Securities are to be purchased by the Underwriters from
Discover, either the initial public offering price or the method by which the
price at which such Securities are to be sold will be determined, the selling
concessions and allowances, if any, and such other information as Discover deems
appropriate in connection with the offering of such Securities, and Discover
will not make any further amendment or any supplement to the Registration
Statement or Prospectus without first having furnished you with a copy of the
proposed form thereof and given you a reasonable opportunity to review the same;
to advise you promptly after it receives notice of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of the Prospectus, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, or
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of such Prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may reasonably request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith Discover
shall
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not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the
Prospectus in such quantities as you may from time to time reasonably request,
and if at any time the delivery of a Prospectus is required by law in connection
with the offering or sale of the Securities, and if at such time any event shall
have occurred as a result of which the Prospectus would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus in order
to comply with the Act, to notify you and to prepare and furnish without charge
to each Underwriter and to any dealer in the Securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance and in case any Underwriter is required to deliver a
Prospectus in connection with sales of any Securities at any time nine months or
more after the effective date of the Registration Statement, upon your request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To cause the Trust to make generally available to
holders of the Securities, in accordance with Rule 158 under the Act or
otherwise, as soon as practicable, but in any event not later than forty-five
days after the end of the fourth full fiscal quarter (ninety days in the case of
the last fiscal quarter in any fiscal year) following the fiscal quarter ending
after the effective date of the Registration Statement, an earning statement of
the Trust (which need not be
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audited) complying with Section 11(a) of the Act and covering a period of at
least twelve consecutive months beginning after the effective date of such
Registration Statement;
(e) To pay or cause to be paid all expenses incident to
the performance of its obligations hereunder, including the cost of all
qualifications of the Securities under state securities laws (including
reasonable fees of counsel to the Underwriters in connection with such
qualifications and in connection with legal investment surveys) and the cost of
printing this Agreement and any blue sky and legal investment memoranda.
Discover agrees with each of the Underwriters during the period
beginning from the date of the Terms Agreement and continuing to and including
the earlier of (i) the termination of trading restrictions on the Securities, of
which termination you agree to give Discover prompt notice confirmed in writing,
and (ii) the Time of Delivery, not to offer, sell, contract to sell or otherwise
dispose of any securities of Discover or any other affiliate thereof or any
other trust for which Discover or any other affiliate thereof is depositor,
which represent participation interests in Discover Card receivables, without
your prior written consent, which consent shall not be unreasonably withheld.
6. The obligations of the several Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of Discover herein are, at and as of the Time of
Delivery, true and correct, the condition that Discover shall have performed all
of its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) All actions required to be taken and all filings
required to be made by Discover under the Act prior to the Time of Delivery for
the Securities shall have been duly taken or made; and prior to the applicable
Time of Delivery, no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no
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proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Commission's satisfaction.
(b) All corporate proceedings and related matters in
connection with the organization of Discover, the validity of the Pooling and
Servicing Agreement and the registration, authorization, issue, sale and
delivery of the Securities shall have been satisfactory to counsel to the
Underwriters, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this subdivision (b).
(c) Counsel to Discover (which for purposes of the
opinions described in clauses (i)-(iii) and the opinions as to the due
authorization, execution and delivery of the Pooling and Servicing Agreement and
the due authorization, execution, issuance and delivery of the Securities in
clause (iv) may be in-house counsel to Discover) shall have furnished to you
their written opinion, dated the Time of Delivery, in form and substance
satisfactory to you in your reasonable judgment, to the effect that:
(i) Discover is validly existing as a banking corporation
in good standing under the laws of the State of Delaware;
(ii) This Agreement and the Terms Agreement have been duly
authorized, executed and delivered on the part of Discover;
(iii) The compliance by Discover with all of the provisions
of this Agreement, the Terms Agreement and the Pooling and Servicing Agreement
will not conflict with or result in any breach which would constitute a material
default under, or, except to the extent contemplated in the Pooling and
Servicing Agreement, result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Discover or NOVUS,
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material to Discover and NOVUS (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan agreement or other
agreement or instrument for borrowed money known to such counsel to which
Discover or NOVUS is a party or by which Discover or NOVUS may be bound or to
which any of the property or assets of Discover or NOVUS, material to Discover
and NOVUS (whether or not consolidated) considered as a whole, is subject, nor
will such action result in any material violation of the provisions of the
Certificate of Incorporation or the By-Laws of Discover, or to the best
knowledge of such counsel, any statute or any order, rule or regulation
applicable to Discover of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over Discover other
than the Act, the Exchange Act, the Trust Indenture Act and the Investment
Company Act and the rules and regulations under each of such acts and other than
the securities laws of the various states or other jurisdictions which are
applicable to the issue and sale of the Securities and other state laws relating
to the perfection of security interests; and, to the best knowledge of such
counsel, no consent, approval, authorization or other order of, or filing with,
any court or any such regulatory authority or other governmental body is
required for the issue and sale of the Securities except as may be required
under the Act, the Exchange Act, the Trust Indenture Act and the Investment
Company Act and securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Securities and except for the
filing of any financing or continuation statement required to perfect or
continue the Trust's interest in the Receivables;
(iv) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered on the part of Discover and as to Discover is
a valid and binding instrument enforceable in accordance with its terms except
as the foregoing may be limited by insolvency, bankruptcy, reorganization,
moratorium or other laws relating to or affecting the enforcement of creditors'
rights or by general equity principles; the Pooling and Servicing
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Agreement is not required to be qualified under the Trust Indenture Act; the
Trust is not required to be registered under the Investment Company Act; and the
Securities have been duly authorized and (assuming their due authentication by
the Trustee) have been duly executed, issued and delivered and constitute valid
and binding obligations of the Trust in accordance with their terms, entitled to
the benefits of the Pooling and Servicing Agreement, except as the foregoing may
be limited by insolvency, bankruptcy, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general equity
principles; and
(v) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by Discover prior to the Time of
Delivery (other than financial, statistical and accounting data therein as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder.
In rendering such opinion, counsel may rely to the extent they deem
appropriate upon certificates of officers or other executives of Discover and
their affiliates and of public officials as to factual matters and upon opinions
of other counsel. Such counsel shall also state that nothing has come to their
attention which has caused them to believe that the Registration Statement as of
its effective date or the Prospectus as of the date thereof and as of the
applicable Time of Delivery (other than financial, statistical and accounting
data therein, as to which such counsel need express no belief) contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.
(d) At the Time of Delivery, Deloitte & Touche LLP shall
have furnished to you a letter or letters, dated the respective date of delivery
thereof, in form and substance satisfactory to you;
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(e) (i) Discover and its affiliates (whether or not
consolidated) considered as a whole, shall not have sustained, since the date of
the latest audited financial statement previously delivered to you, any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree and (ii) since the date of the
Terms Agreement there shall not have been any material change in the capital
stock accounts or long-term debt of Discover or any material adverse change in
the general affairs, financial position, shareholders' equity or results of
operations of Discover and its affiliates (whether or not consolidated)
considered as a whole, the effect of which in any such case described in clause
(i) or (ii), in your judgment renders it inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(f) Subsequent to the date of the Terms Agreement none of
(i) the United States shall have become engaged in the outbreak or escalation of
hostilities involving the United States or there has been a declaration by the
United States of a national emergency or a declaration of war, (ii) a banking
moratorium shall have been declared by either Federal or New York State
authorities, or (iii) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established by such Exchange, any of which events, in your judgment, renders it
inadvisable to proceed with the public offering or the delivery of the
Securities;
(g) At or prior to the Time of Delivery, the Certificates
shall be assigned the ratings by Xxxxx'x Investors Service, Inc. ("Moody's") and
by Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx Companies Inc.
("Standard & Poor's") set forth in the Terms Agreement;
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(h) Discover shall have furnished or caused to be
furnished to you at the Time of Delivery certificates satisfactory to you as to
the accuracy at and as of such Time of Delivery of the representations and
warranties of Discover herein and as to the performance by Discover of all its
obligations hereunder to be performed at or prior to the Time of Delivery and
Discover shall have also furnished you similar certificates satisfactory to you
as to the matters set forth in subdivision (a) of this Section 6.
(i) The Underwriters shall be entitled to rely on the
opinions of an outside counsel acceptable to the Underwriters as special counsel
to Discover as delivered to Moody's and Standard & Poor's in connection with the
rating of the Securities.
7. (a) Discover will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto furnished
by Discover, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or (in the case
of the Registration Statement or the Prospectus, or any amendment or supplement
thereto) necessary to make the statements therein not misleading or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim; provided, however, that
Discover shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
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Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to Discover by any Underwriter through you expressly for use therein;
and provided, further, that Discover shall not be liable to any Underwriter or
any person controlling such Underwriter under the indemnity agreement in this
subdivision (a) with respect to the Preliminary Prospectus or the Prospectus, as
the case may be, to the extent that any such loss, claim, damage or liability of
such Underwriter or controlling person results solely from the fact that such
Underwriter sold Securities to a person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus or
of the Prospectus as then amended or supplemented if Discover had previously
furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless
Discover against any losses, claims, damages or liabilities to which Discover
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or (in the case of the Registration Statement or the
Prospectus, or any amendment or supplement thereto) necessary to make the
statements therein not misleading or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to Discover by such Underwriter
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through you expressly for use therein; and will reimburse Discover for any legal
or other expenses reasonably incurred by Discover in connection with
investigating or defending any such action or claim.
(c) Within a reasonable period after receipt by an
indemnified party under subdivision (a) or (b) above of notice of the
commencement of any action with respect to which indemnification is sought under
such subdivision or contribution may be sought under subdivision (d) below, such
indemnified party shall notify the indemnifying party in writing of the
commencement thereof. In case any such action shall be brought against any
indemnified party, the indemnifying party shall be entitled to participate
therein, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 7
is unavailable to an indemnified party under subdivision (a) or (b) above in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) (i) in such
proportion as is appropriate to reflect the relative benefits received by
Discover on the one hand and the Underwriters on the other from the offering of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of Discover
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on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by Discover on the one
hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by Discover bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the cover
page of the Prospectus Supplement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by Discover on the one hand and the Underwriters
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission of Discover on
the one hand and the Underwriters, directly or through you, on the other hand.
With respect to any Underwriter, such relative fault shall also be determined by
reference to the extent (if any) to which such losses, claims, damages or
liabilities (or actions in respect thereof) with respect to any Preliminary
Prospectus result from the fact that such Underwriter sold the Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as then
amended or supplemented if Discover had previously furnished copies thereof to
such Underwriter. Discover and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subdivision (d) were determined
by per capita allocation among the indemnifying parties (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subdivision (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to
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above in this subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subdivision (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this subdivision (d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of Discover under this Section 7
shall be in addition to any liability which Discover may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 7 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of Discover and to each
person, if any, who controls Discover within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder and under the
Terms Agreement, you may in your discretion arrange for yourselves or another
party or other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Securities, then Discover shall be entitled
to a further period of thirty-six hours within which to procure another party or
other
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parties to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify Discover that you have so arranged for
the purchase of such Securities, or Discover notifies you that it has so
arranged for the purchase of such Securities, you or Discover shall have the
right to postpone the Time of Delivery for such Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and Discover agrees to
file promptly any amendments or supplements to the Registration Statement or the
Prospectus which may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and Discover as provided in subdivision (a) above, the aggregate principal
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then Discover shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities which such Underwriter agreed to purchase
hereunder and under the Terms Agreement and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of the Securities which such Underwriter agreed to purchase
hereunder and under the Terms Agreement) of the Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and Discover as provided in
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subdivision (a) above, the aggregate principal amount of Securities which
remains unpurchased exceeds one-eleventh of the aggregate principal amount of
all the Securities, as referred to in subdivision (b) above, or if Discover
shall not exercise the right described in subdivision (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then the Terms Agreement relating to the Securities shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or Discover, except for the expenses to be borne by Discover as
provided in Section 5(e) hereof and the indemnity and contribution agreements in
Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
9. The respective indemnities, agreements, representations,
warranties and other statements of Discover and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or Discover or
any officer or director or controlling person of Discover, and shall survive
delivery of and payment for the Securities. Anything herein to the contrary
notwithstanding, the indemnity agreement of Discover in subdivisions (a) and (e)
of Section 7 hereof, the representations and warranties in subdivisions (b) and
(c) of Section 1 hereof and any representation or warranty as to the accuracy of
the Registration Statement or the Prospectus as amended or supplemented
contained in any certificate furnished by Discover pursuant to subdivision (i)
of Section 6 hereof, insofar as they may constitute a basis for indemnification
for liabilities (other than payment by Discover of expenses incurred or paid in
the successful defense of any action, suit or proceeding) arising under the Act,
shall not extend to the extent of any interest therein of an Underwriter or a
controlling person of an Underwriter if a director, officer or controlling
person of Discover when
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the Registration Statement becomes effective or a person who, with his consent,
is named in the Registration Statement as being about to become a director of
Discover, is a controlling person of such Underwriter, except in each case to
the extent that an interest of such character shall have been determined by a
court of appropriate jurisdiction as not against public policy as expressed in
the Act. Unless in the opinion of counsel for Discover the matter has been
settled by controlling precedent, Discover will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question whether such interest is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
10. If the Terms Agreement shall be terminated pursuant to Section
8 hereof, Discover shall not then be under any liability to any Underwriter with
respect to the Securities subject to such Terms Agreement except as provided in
Section 5(e) and Section 7 hereof; but, if for any other reason the Securities
are not delivered by or on behalf of Discover as provided herein, Discover will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Securities, but Discover shall not then be under any further
liability to any Underwriter with respect to the Securities except as provided
in Section 5(e) and Section 7 hereof.
11. In all dealings hereunder, you shall act on behalf of each of
the Underwriters and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you, or by Xxxxxx Xxxxxxx & Co. Incorporated on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or sent by
registered mail to you jointly in care of Xxxxxx Xxxxxxx & Co.
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Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Finance
Group and if to Discover shall be sufficient in all respects if delivered or
sent by registered mail to Discover at 00 Xxxx'x Xxx, Xxx Xxxxxx, Xxxxxxxx
00000, Attention: President.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, Discover and, to the extent provided in Section 7
and Section 9 hereof, the officers and directors of Discover and each person who
controls Discover or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement.
14. This Agreement shall be construed in accordance with the laws
of the State of New York. "Business day" as used herein shall mean any day when
the Commission's office in Washington, D.C. is normally open for business.
15. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your under-standing, please sign
and return two counterparts hereof and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and Discover.
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Very truly yours,
DISCOVER BANK
By: _________________________
Accepted as of the date hereof:
XXXXXX XXXXXXX & CO. INCORPORATED
By: _________________________
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