DISCOVER CARD MASTER TRUST I CREDIT CARD PASS-THROUGH CERTIFICATES TERMS AGREEMENT Dated: July 21, 2006
Exhibit
1.2
DISCOVER CARD MASTER TRUST I
CREDIT CARD PASS-THROUGH CERTIFICATES
Dated: July 21, 2006
To: Discover Bank, as Seller under the Amended and Restated Pooling and Servicing Agreement, dated
as of November 3, 2004, as amended.
Re: Underwriting Agreement dated July 21, 2006
Title of Securities:
Subseries 1:
Discover Card Master Trust I, Series 2006-2 Floating Rate Class A,
Subseries 1 Credit Card Pass-Through Certificates;
Discover Card Master Trust I, Series 2006-2 Floating Rate Class B,
Subseries 1 Credit Card Pass-Through Certificates;
Subseries 2:
Discover Card Master Trust I, Series 2006-2 Floating Rate Class A,
Subseries 2 Credit Card Pass-Through Certificates; and
Discover Card Master Trust I, Series 2006-2 Floating Rate Class B,
Subseries 2 Credit Card Pass-Through Certificates.
Subseries 3:
Discover Card Master Trust I, Series 2006-2 Floating Rate Class A,
Subseries 3 Credit Card Pass-Through Certificates; and
Discover Card Master Trust I, Series 2006-2 Floating Rate Class B,
Subseries 3 Credit Card Pass-Through Certificates.
Initial Principal Amount of Certificates: $1,600,001,000
Series and Class Designation Schedule:
Subseries 1:
Discover Card Master Trust I, Series 2006-2 $600,000,000 Floating Rate Class A, Subseries 1
Credit Card Pass-Through Certificates;
Discover Card Master Trust I, Series 2006-2 $31,579,000 Floating Rate Class B, Subseries 1
Credit Card Pass-Through Certificates;
Subseries 2:
Discover Card Master Trust I, Series 2006-2 $600,000,000 Floating Rate Class A, Subseries 2
Credit Card Pass-Through Certificates; and
Discover Card Master Trust I, Series 2006-2 $31,579,000 Floating Rate Class B, Subseries 2
Credit Card Pass-Through Certificates
Subseries 3:
Discover Card Master Trust I, Series 2006-2 $320,000,000 Floating Rate Class A, Subseries 3
Credit Card Pass-Through Certificates; and
Discover Card Master Trust I, Series 2006-2 $16,843,000 Floating Rate Class B, Subseries 3
Credit Card Pass-Through Certificates
Series Cut-Off Date: July 1, 2006
| Moody's Investors | Standard & Poor's | |||
| Expected Certificate Rating: | Service, Inc. | Ratings Services | ||
| Class A, Subseries 1 Class B, Subseries 1 |
Aaa A2 |
AAA A |
||
| Class A, Subseries 2 Class B, Subseries 2 |
Aaa A2 |
AAA A |
||
| Class A, Subseries 3 Class B, Subseries 3 |
Aaa A2 |
AAA A |
Aggregate outstanding balance of Receivables in the Discover Card Master Trust I as of June 30,
2006: $31,059,971,042.70
Expected Date of Series Supplement: July 27, 2006.
Certificate Rate:
Class A, Subseries 1: One-month LIBOR per annum;
Class B, Subseries 1: One-month LIBOR plus 0.12% per annum;
Class B, Subseries 1: One-month LIBOR plus 0.12% per annum;
Class A, Subseries 2: One-month LIBOR plus 0.03% per annum;
Class B, Subseries 2: One-month LIBOR plus 0.16% per annum;
Class B, Subseries 2: One-month LIBOR plus 0.16% per annum;
Class A, Subseries 3: One-month LIBOR plus 0.08% per annum; and
Class B, Subseries 3: One-month LIBOR plus 0.26% per annum.
Class B, Subseries 3: One-month LIBOR plus 0.26% per annum.
Time of Sale:
2:00 p.m. New York City time on July 21, 2006.
Time of Sale Information:
(1) Series Term Sheet dated July 20, 2006 relating to the Discover Card Master Trust I,
Series 2006-2, attached as Annex 1 hereto, which incorporates by reference (a) the form of
Series Terms Sheet supplement for Series 2006-2, filed as a free writing prospectus, dated
July 20, 2006, (b) the static pool information regarding the historical performance of the
Receivables for the accounts contained on the internet website
xxxx://xxx.xxxxxxxxxxxxxxxxx.xxx/xxxxxxx and (c) the other reports and documents
incorporated by reference to the Series Term Sheet and (2) the Pricing Information Schedule.
If, subsequent to the Time of Sale, it is determined that such information included an
untrue statement of material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading and the Underwriters have terminated their old purchase contracts and entered
into new purchase contracts with purchasers of the Certificates, then “Time of Sale
Information” will also include any information that corrects such material misstatements or
omissions, together with any other information, to the extent it is made available to
purchasers at the time of entry into the last such new purchase contract such that “Time of
Sale Information” no longer includes an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (“Corrective Information”).
Underwriter Information
“Underwriter Information” shall mean the written information furnished to Discover Bank by
the Underwriters for use in the Prospectus and set forth in the “blood letter” from the
Underwriters to Discover Bank dated the Time of Delivery.
Pricing Information Schedule:
Bloomberg L.P. E-mail setting forth the aggregate principal amount of the Certificates to be
sold and the final pricing terms for each series of the Discover Card Master Trust I,
Series 2006-2 and attached as Annex 2 hereto. The Underwriters shall have delivered the
information set forth on the Pricing Information Schedule to potential investors in the
Securities prior to entering into a purchase contract with the investor for the purchase of
such Securities.
Terms of Sale:
The purchase price for the Certificates to the Underwriters will be
99.825% of the aggregate principal amount of the Class A, Subseries 1 Certificates;
99.800% of the aggregate principal amount of the Class B, Subseries 1 Certificates;
99.800% of the aggregate principal amount of the Class B, Subseries 1 Certificates;
99.775% of the aggregate principal amount of the Class A, Subseries 2 Certificates;
99.750% of the aggregate principal amount of the Class B, Subseries 2 Certificates;
99.750% of the aggregate principal amount of the Class B, Subseries 2 Certificates;
99.700% of the aggregate principal amount of the Class A, Subseries 3 Certificates; and
99.675% of the aggregate principal amount of the Class B, Subseries 3 Certificates.
99.675% of the aggregate principal amount of the Class B, Subseries 3 Certificates.
The Underwriters will offer the Certificates to the public at a price equal to
100% of the aggregate principal amount of the Class A, Subseries 1 Certificates;
100% of the aggregate principal amount of the Class B, Subseries 1 Certificates;
100% of the aggregate principal amount of the Class B, Subseries 1 Certificates;
100% of the aggregate principal amount of the Class A, Subseries 2 Certificates;
100% of the aggregate principal amount of the Class B, Subseries 2 Certificates;
100% of the aggregate principal amount of the Class B, Subseries 2 Certificates;
100% of the aggregate principal amount of the Class A, Subseries 3 Certificates; and
100% of the aggregate principal amount of the Class B, Subseries 3 Certificates.
100% of the aggregate principal amount of the Class B, Subseries 3 Certificates.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on July 27, 2006, or at such other
time as may be agreed upon in writing.
Notwithstanding anything in the Agreement or in this Terms Agreement to the contrary, the
Agreement and this Terms Agreement constitute the entire agreement and understanding among the
parties hereto with respect to the purchase and sale of the Series 2006-2 Certificates. This Terms
Agreement may be amended only by written agreement of the parties hereto.
| Very truly yours, XXXXXX XXXXXXX & CO. INCORPORATED As Representative of the Underwriters named in Schedule I hereto |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Managing Director | ||||
Accepted:
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| V.P., Chief Accounting Officer & Treasurer | ||||
SCHEDULE I
UNDERWRITERS
$600,000,000 Floating Rate Class A, Subseries 1 Credit Card Pass-Through Certificates, Series
2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 450,000,000 | ||
Deutsche Bank Securities Inc. |
$ | 54,000,000 | ||
RBC Capital Markets Corporation |
$ | 30,000,000 | ||
Wachovia Capital Markets LLC |
$ | 30,000,000 | ||
ABN AMRO Incorporated |
$ | 18,000,000 | ||
Scotia Capital (USA) Inc. |
$ | 18,000,000 | ||
$31,579,000 Floating Rate Class B, Subseries 1 Credit Card Pass-Through Certificates, Series 2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 23,684,250 | ||
Deutsche Bank Securities Inc. |
$ | 2,842,110 | ||
RBC Capital Markets Corporation |
$ | 1,578,950 | ||
Wachovia Capital Markets LLC |
$ | 1,578,950 | ||
ABN AMRO Incorporated |
$ | 947,370 | ||
Scotia Capital (USA) Inc. |
$ | 947,370 | ||
$600,000,000 Floating Rate Class A, Subseries 2 Credit Card Pass-Through Certificates, Series
2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 450,000,000 | ||
Deutsche Bank Securities Inc. |
$ | 54,000,000 | ||
RBC Capital Markets Corporation |
$ | 30,000,000 | ||
Wachovia Capital Markets LLC |
$ | 30,000,000 | ||
ABN AMRO Incorporated |
$ | 18,000,000 | ||
Scotia Capital (USA) Inc. |
$ | 18,000,000 | ||
$31,579,000 Floating Rate Class B, Subseries 2 Credit Card Pass-Through Certificates, Series 2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 23,684,250 | ||
Deutsche Bank Securities Inc. |
$ | 2,842,110 | ||
RBC Capital Markets Corporation |
$ | 1,578,950 | ||
Wachovia Capital Markets LLC |
$ | 1,578,950 | ||
ABN AMRO Incorporated |
$ | 947,370 | ||
Scotia Capital (USA) Inc. |
$ | 947,370 | ||
$320,000,000 Floating Rate Class A, Subseries 3 Credit Card Pass-Through Certificates, Series
2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 240,000,000 | ||
Deutsche Bank Securities Inc. |
$ | 28,800,000 | ||
RBC Capital Markets Corporation |
$ | 16,000,000 | ||
Wachovia Capital Markets LLC |
$ | 16,000,000 | ||
ABN AMRO Incorporated |
$ | 9,600,000 | ||
Scotia Capital (USA) Inc. |
$ | 9,600,000 | ||
$16,843,000 Floating Rate Class B, Subseries 3 Credit Card Pass-Through Certificates, Series 2006-2
| Principal Amount | ||||
Xxxxxx Xxxxxxx & Co. Incorporated |
$ | 12,632,250 | ||
Deutsche Bank Securities Inc. |
$ | 1,515,870 | ||
RBC Capital Markets Corporation |
$ | 842,150 | ||
Wachovia Capital Markets LLC |
$ | 842,150 | ||
ABN AMRO Incorporated |
$ | 505,290 | ||
Scotia Capital (USA) Inc. |
$ | 505,290 | ||
ANNEX 1
SERIES TERM SHEET
(filed as a Free Writing Prospectus pursuant to
Rule 433 on July 20, 2006)
(filed as a Free Writing Prospectus pursuant to
Rule 433 on July 20, 2006)
ANNEX 2
7/21 DCMT 06-2 $1.6bln
via MS. Co“s: DB, RBC, ABN, Scotia Setts: 7/27
| Class | Size $ (MM) | WAL | ExpFnl | LglFnl | M/S&P/FCH | BNCH | Gdnce | Spread | ||||||||||||
A1
|
600.00 | 2.97 | 7/09 | 0/00 | Xxx/XXX/XXX | 0xX | Xx | + 0 | ||||||||||||
B1
|
31.579 | 3.06 | 8/09 | 1/12 | A2/A/A+ | 1mL | 11-12 | +12 | ||||||||||||
A2
|
600.00 | 4.97 | 7/11 | 1/14 | Aaa/AAA/AAA | 1mL | 4a | + 3 | ||||||||||||
B2
|
31.579 | 5.05 | 8/11 | 1/14 | A2/A/A+ | 1mL | 16a | +16 | ||||||||||||
A3
|
320.000 | 6.97 | 7/13 | 1/16 | Aaa/AAA/AAA | 1mL | 8a | + 8 | ||||||||||||
B3
|
16.843 | 7.05 | 8/13 | 1/16 | A2/A/A+ | 1mL | 21a | +26 | ||||||||||||
