EXHIBIT 10.2
EXECUTION VERSION
AMENDMENT NO. 1, dated as of February 29, 2008, to the Credit Agreement referred to below, among DISCOVER FINANCIAL SERVICES, a Delaware corporation, DISCOVER BANK, a Delaware banking corporation, the SUBSIDIARY BORROWERS party from time to time thereto, the LENDERS party thereto and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
The Borrowers, the Lenders and the Administrative Agent are parties to a Credit Agreement dated as of June 6, 2007 (the “Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit to be made by or on behalf of said Lenders to the Borrowers in an aggregate principal amount not to exceed $2,500,000,000. The Borrowers, the Lenders and the Administrative Agent wish to amend the Credit Agreement in certain respects and, accordingly, the parties hereto hereby agree as follows:
Section 1.Definitions. Except as otherwise defined in this Amendment No. 1, terms defined in the Credit Agreement are used herein as defined therein.
Section 2.Amendments. Effective as of the date hereof as provided in Section 4 of this Amendment No. 1, the Credit Agreement is hereby amended as follows:
2.01. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit Agreement as amended hereby.
2.02.Financial Statements; Ratings Change and Other Information.
(a) Section 5.01(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(b) (i) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of DFS, its consolidated statement of financial condition and its related consolidated statement of income, changes in stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of DFS and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; and
(ii) within 90 days after the end of each fiscal year of DFS and within 45 days after the end of each of the first three fiscal quarters of each fiscal year of DFS, a statement of financial condition, income, stockholder’s equity and cash flows for Discover Bank as of the end of and for such fiscal year or as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, as applicable, presented in a
format consistent with that of DFS as required by Section 5.01(a) and Section 5.01(b), as applicable, but not to include any footnotes to the financial statements unless as otherwise required by Section 5.01(c) or Section 5.01(d), all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Discover Bank in accordance with GAAP consistently applied;”
(b) Section 5.01(c) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(c) within 45 days after the end of each calendar year of Discover Bank, its Reports of Condition and Income, as required under Section 1817(a)(1) of the FDIA and collected by the Federal Deposit Insurance Corporation (and it shall make its officers available to answer questions and discuss such Reports of Condition and Income with representatives of the Administrative Agent or any Lender);provided that, if (i) the assets of Discover Bank comprise less than 75% of the consolidated assets of DFS as shown on the quarterly or annual financial statements of DFS or (ii) Discover Bank is not required to deliver Reports of Condition and Income under the FDIA, then following such occurrence DFS shall furnish within 90 days after the end of each fiscal year of Discover Bank its audited statement of financial condition and related statements of income, changes in stockholders’ equity and cash flows on a stand-alone basis as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and results of operations of Discover Bank on a stand-alone basis in accordance with GAAP consistently applied;”
(c) Section 5.01(d) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(d) within 45 days after the end of each of the first three calendar quarters of each calendar year of Discover Bank, its Reports of Condition and Income, as required under Section 1817(a)(1) of the FDIA and collected by the Federal Deposit Insurance Corporation (and it shall make its officers available to answer questions and discuss such Reports of Condition and Income with representatives of the Administrative Agent or any Lender);provided that, if (i) the assets of Discover Bank comprise less than 75% of the consolidated assets of DFS as shown on the [quarterly or annual financial statements of DFS] or (ii) Discover Bank is not required to deliver Reports of Condition and Income under the FDIA, then following such occurrence DFS shall furnish within 45 days after end of each of the first three fiscal quarters of each fiscal year of Discover Bank its statement of financial condition and related statements of income, changes in stockholders’ equity and cash flows on a stand-alone basis as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified
by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Discover Bank on a stand-alone basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;”
(d) Section 5.01(g) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(g) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by DFS or any Subsidiary (other than a Securitization Entity) with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by DFS to its shareholders generally, as the case may be;”
2.03.Liens.
(a) Section 6.02(f) of the Credit Agreement is hereby amended by deleting the word “and” at the end of clause (f) thereof.
(b) Section 6.02 of the Credit Agreement is hereby amended by deleting the existing clause (g) and adding a new clause (g) to read in its entirety as follows:
“(g) Liens in favor of a Federal Reserve Bank to secure advances (or future advances) made (or to be made) to such Company or Subsidiary from such Federal Reserve Bank;”
(c) Section 6.02 of the Credit Agreement is hereby amended by adding a new clause (h) to read in its entirety as follows:
“(h) Liens in favor of a Federal Home Loan Bank to secure advances (or future advances) made (or to be made) to such Company or Subsidiary from such Federal Home Loan Bank;”
(d) Section 6.02 of the Credit Agreement is hereby amended by adding a new clause (i) to read in its entirety as follows:
(i) Liens securing mark to market obligations under Swap Agreements evidenced by Credit Support Annexes in a form promulgated by the International Swaps and Derivatives Association, Inc. (excluding, for the avoidance of doubt, any Liens over assets constituting “up front collateral” or securing any “Independent Amount” (as defined in the applicable Credit Support Annex) or its equivalent); and”
(e) Section 6.02 of the Credit Agreement is hereby amended by adding a new clause (j) to read in its entirety as follows:
“(j) other Liens securing obligations in an aggregate amount not to exceed $100,000,000 at any time outstanding.”
Section 3.Representations and Warranties. Each Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (i) the representations and warranties of such Borrower set forth in Article III of the Credit Agreement are, on the date hereof, true and complete as if made on the date hereof (and after giving effect to this Amendment No. 1) and as if each reference in said Article III to “this Agreement” includes reference to this Amendment No. 1 and (ii) both immediately before and after giving effect to the amendments under Section 2 hereof, no Default has occurred and is continuing.
Section 4.Conditions Precedent. The amendments to the Credit Agreement set forth in Section 2 of this Amendment No. 1 shall become effective, as of the date hereof, upon receipt by the Administrative Agent of one or more counterparts of this Amendment No. 1 duly executed and delivered by each of the Borrowers and the Required Lenders.
Section 5.Miscellaneous. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any of the parties hereto may execute this Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered as of the day and year first above written.
| DISCOVER FINANCIAL SERVICES | ||
| By | /S/ ROY A. GUTHRIE | |
| Name: Roy A. Guthrie | ||
| Title: CFO | ||
| U.S. Federal Tax Identification No.: 36-2517428 | ||
| DISCOVER BANK | ||
| By | /S/ MICHAEL F. RICKERT | |
| Name: Michael F. Rickert | ||
| Title: CFO | ||
| U.S. Federal Tax Identification No.: 51-0020270 | ||
JPMORGAN CHASE BANK, N.A., as Administrative Agent, | ||
| By | /S/ DWIGHT SEAGREN | |
| Name: Dwight Seagren | ||
| Title: Vice President | ||
| LENDERS |
| BNP Paribas | ||
| By: | /S/ MARGUERITE L. LEBON | |
| Name: Marguerite L. Lebon | ||
| Title: Vice President | ||
| By: | /S/ STELLA MCCAFFREY | |
| Name: Stella McCaffrey | ||
| Title: Director |
| PNC Bank, National Association | ||
| By: | /S/ EDWARD J. CHIDIAC | |
| Name: Edward J. Chidiac | ||
| Title: Managing Director | ||
| The Bank of Tokyo—Mitsubishi UFJ, Ltd., New York Branch | ||
| By: | /S/ CHIMIE T. PEMBA | |
| Name: Chimie T. Pemba | ||
| Title: Authorized Signatory | ||
| Barclays Bank PLC | ||
| By: | /S/ NICHOLAS A. BELL | |
| Name: Nicholas A. Bell | ||
| Title: Director | ||
| Wells Fargo Bank, N.A. | ||
| By: | /S/ MICHAEL J. GIESE | |
| Name: Michael J. Giese | ||
| Title: Senior Vice President | ||
| William Street Credit Corporation | ||
| By: | /S/ MARK WALTON | |
| Name: Mark Walton | ||
| Title: Assistant Vice President | ||
| Bank of America | ||
| By: | /S/ STEFANIE J. BROWN | |
| Name: Stefanie J. Brown | ||
| Title: Vice President | ||
Greenwich Capital Markets, Inc. as agent for The Royal Bank of Scotland | ||
| By: | /S/ FERGUS SMAIL | |
| Name: Fergus Smail | ||
| Title: Senior Vice President | ||
| UBS Loan Finance LLC | ||
| By: | /S/ DAVID B. JULIE | |
| Name: David B. Julie | ||
| Title: Associate Director | ||
| By: | /S/ MARY E. EVANS | |
| Name: Mary E. Evans | ||
| Title: Associate Director |
| Lehman Commercial Paper Inc. | ||
| By: | /S/ JANINE M. SHUGAN | |
| Name: Janine M. Shugan | ||
| Title: Authorized Signatory | ||
| Morgan Stanley Senior Funding, Inc. | ||
| By: | /S/ DARRAGH DEMPSEY | |
| Name: Darragh Dempsey | ||
| Title: Vice President | ||
| Royal Bank of Canada | ||
| By: | /S/ HOWARD LEE | |
| Name: Howard Lee | ||
| Title: Authorized Signatory | ||
| Wachovia Bank, National Association | ||
| By: | /S/ JOAN ANDERSON | |
| Name: Joan Anderson | ||
| Title: Director | ||
| HSBC Bank USA, N.A. | ||
| By: | /S/ VINCE CLARK | |
| Name: Vince Clark | ||
| Title: Senior Vice President | ||
| Deutsche Bank AG New York Branch | ||
| By: | /S/ VALERIE SHAPIRO | |
| Name: Valerie Shapiro | ||
| Title: Vice President | ||
| By: | /S/ MELISSA CURRY | |
| Name: Melissa Curry | ||
| Title: Vice President |
| JP Morgan Chase Bank N.A. | ||
| By: | /S/ DWIGHT SEAGREN | |
| Name: Dwight Seagren | ||
| Title: Vice President | ||
| Credit Suisse, Cayman Islands Branch | ||
| By: | /S/ JAY CHALL | |
| Name: Jay Chall | ||
| Title: Director | ||
| By: | /S/ PETRA JAEK | |
| Name: Petra Jaek | ||
| Title: Assistant Vice President |
| Merrill Lynch Bank USA | ||
| By: | /S/ LOUIS ADLER | |
| Name: Louis Adler | ||
| Title: First Vice President | ||
| Societe Generale | ||
| By: | /S/ EDITH HORNICK | |
| Name: Edith Hornick | ||
| Title: Managing Director | ||
| Citibank, N.A. | ||
| By: | /S/ ROBERT D. GOLDSTEIN | |
| Name: Robert D. Goldstein | ||
| Title: Managing Director | ||