Terms Agreement
Exhibit 1.2
DISCOVER CARD MASTER TRUST I
CREDIT CARD PASS-THROUGH CERTIFICATES
TERMS AGREEMENT
Dated: November 18, 2004
To: Discover Bank, as Seller under the Amended and Restated Pooling and Servicing Agreement, dated as of November 3, 2004.
Re: Underwriting Agreement dated December 19, 2003
Title of Securities:
Subseries 1:
Discover Card Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 1 Credit Card Pass-Through Certificates.
Discover Card Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 1 Credit Card Pass-Through Certificates.
Subseries 2:
Discover Card Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 2 Credit Card Pass-Through Certificates.
Discover Card Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 2 Credit Card Pass-Through Certificates.
Initial Principal Amount of Certificates: $1,842,106,000
Series and Class Designation Schedule:
Subseries 1:
Discover Card Master Trust I, Series 2004-2 $1,250,000,000 Floating Rate Class A, Subseries 1 Credit Card Pass-Through Certificates.
Discover Card Master Trust I, Series 2004-2 $65,790,000 Floating Rate Class B, Subseries 1 Credit Card Pass-Through Certificates.
Subseries 2:
Discover Card Master Trust I, Series 2004-2 $500,000,000 Floating Rate Class A, Subseries 2 Credit Card Pass-Through Certificates.
Discover Card Master Trust I, Series 2004-2 $26,316,000 Floating Rate Class B, Subseries 2 Credit Card Pass-Through Certificates.
Series Cut-Off Date: December 1, 2004
| Moody's Investors | Standard & Poor's | |||
| Certificate Rating: | Service, Inc. | Ratings Services | ||
Class A, Subseries 1 | Aaa | AAA | ||
Class B, Subseries 1 | A2 | A | ||
Class A, Subseries 2 | Aaa | AAA | ||
Class B, Subseries 2 | A2 | A |
Aggregate outstanding balance of Receivables as of November 1, 2004: $33,773,093,267.33
Date of Series Supplement: December 2, 2004
Certificate Rate:
Class A, Subseries 1: | One-month LIBOR plus 0.02% per annum; provided that for the first interest accrual period, the Certificate Rate will be the average of one-month LIBOR and two-month LIBOR plus 0.02% per annum; | |
Class B, Subseries 1: | One-month LIBOR plus 0.16% per annum; provided that for the first interest accrual period, the Certificate Rate will be the average of one-month LIBOR and two-month LIBOR plus 0.16% per annum; | |
Class A, Subseries 2: | One-month LIBOR plus 0.07% per annum; provided that for the first interest accrual period, the Certificate Rate will be the average of one-month LIBOR and two-month LIBOR plus 0.07% per annum; and | |
Class B, Subseries 2: | One-month LIBOR plus 0.24% per annum; provided that for the first interest accrual period, the Certificate Rate will be the average of one-month LIBOR and two-month LIBOR plus 0.24% per annum. |
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; 99.775% 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; and 99.750% of the aggregate principal amount of the Class B, Subseries 2 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 A, Subseries 2 Certificates; and 100% of the aggregate principal amount of the Class B, Subseries 2 Certificates.
Time of Delivery: 9:00 A.M., Chicago, Illinois Time, on December 2, 2004, 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 2004-2 Certificates. This Terms Agreement may be amended only by written agreement of the parties hereto.
| Very truly yours, | ||||
| MORGAN STANLEY & CO. INCORPORATED As Representative of the Underwriters named in Schedule I hereto | ||||
| By: /s/ Peter Chai | ||||
| Accepted: | ||||
| DISCOVER BANK | ||||
By: /s/ Michael F. Rickert | ||||
SCHEDULE I
UNDERWRITERS
Subseries 1:
$1,250,000,000 Floating Rate Class A, Subseries 1 Credit Card Pass-Through Certificates, Series 2004-2
| Principal Amount | ||||
Morgan Stanley & Co. Incorporated | $ | 937,500,000 | ||
Deutsche Bank Securities Inc. | $ | 87,500,000 | ||
RBC Capital Markets Corporation | $ | 75,000,000 | ||
ABN AMRO Incorporated | $ | 50,000,000 | ||
Calyon Securities (USA) Inc. | $ | 50,000,000 | ||
Scotia Capital (USA) Inc. | $ | 50,000,000 | ||
Total | $ | 1,250,000,000 | ||
$65,790,000 Floating Rate Class B, Subseries 1 Credit Card Pass-Through Certificates, Series 2004-2
| Principal Amount | ||||
Morgan Stanley & Co. Incorporated | $ | 49,342,500 | ||
Deutsche Bank Securities Inc. | $ | 4,605,300 | ||
RBC Capital Markets Corporation | $ | 3,947,400 | ||
ABN AMRO Incorporated | $ | 2,631,600 | ||
Calyon Securities (USA) Inc. | $ | 2,631,600 | ||
Scotia Capital (USA) Inc. | $ | 2,631,600 | ||
Total | $ | 65,790,000 | ||
Subseries 2:
$500,000,000 Floating Rate Class A, Subseries 2 Credit Card Pass-Through Certificates, Series 2004-2
| Principal Amount | ||||
Morgan Stanley & Co. Incorporated | $ | 375,000,000 | ||
Deutsche Bank Securities Inc. | $ | 35,000,000 | ||
RBC Capital Markets Corporation | $ | 30,000,000 | ||
ABN AMRO Incorporated | $ | 20,000,000 | ||
Calyon Securities (USA) Inc. | $ | 20,000,000 | ||
Scotia Capital (USA) Inc. | $ | 20,000,000 | ||
Total | $ | 500,000,000 | ||
$26,316,000 Floating Rate Class B, Subseries 2 Credit Card Pass-Through Certificates, Series 2004-2
| Principal Amount | ||||
Morgan Stanley & Co. Incorporated | $ | 19,737,000 | ||
Deutsche Bank Securities Inc. | $ | 1,842,120 | ||
RBC Capital Markets Corporation | $ | 1,578,960 | ||
ABN AMRO Incorporated | $ | 1,052,640 | ||
Calyon Securities (USA) Inc. | $ | 1,052,640 | ||
Scotia Capital (USA) Inc. | $ | 1,052,640 | ||
Total | $ | 26,316,000 | ||
