exv4w2



 




Exhibit 4.2


DISCOVER BANK




Master Servicer, Servicer and Seller




and




U.S. BANK NATIONAL ASSOCIATION




Trustee




on behalf of the Certificateholders



 


SERIES SUPPLEMENT




Dated as of January 18, 2005




to




AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT




Dated as of November 3, 2004


 



$1,500,000,000 Class A Certificates




$78,948,000 Class B Certificates



 


DISCOVER CARD MASTER TRUST I




SERIES 2005-1 CERTIFICATES




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	SERIES TERM SHEET
	 	 	1	 
	ANNEX
	 	 	1	 
	SECTION 1. Definitions
	 	 	1	 
	SECTION 2. Subordination
	 	 	28	 
	SECTION 3. Representations and Warranties of the Sellers
	 	 	29	 
	SECTION 4. Representations and Warranties of Discover Bank as Master Servicer and Servicer
	 	 	30	 
	SECTION 5. Representations and Warranties of Other Servicers
	 	 	30	 
	SECTION 6. Representations and Warranties of the Trustee
	 	 	30	 
	SECTION 7. Authentication of Certificates
	 	 	31	 
	SECTION 8. Establishment and Administration of Investor Accounts and the Credit Enhancement Account
	 	 	31	 
	SECTION 9. Allocations of Collections
	 	 	35	 
	SECTION 10. Payments
	 	 	51	 
	SECTION 11. Credit Enhancement
	 	 	54	 
	SECTION 12. Alternative Credit Support Election
	 	 	56	 
	SECTION 13. Calculation of Investor Losses
	 	 	57	 
	SECTION 14. Servicing Compensation
	 	 	57	 
	SECTION 15. Class Interest Rate Caps
	 	 	57	 
	SECTION 16. Class Interest Rate Swaps
	 	 	59	 
	SECTION 17. Investor Certificateholders’ Monthly Statement
	 	 	59	 
	SECTION 18. Master Servicer’s Monthly Certificate
	 	 	59	 
	SECTION 19. Notices
	 	 	60	 
	SECTION 20. Additional Amortization Events
	 	 	60	 
	SECTION 21. Early Accumulation Events; Additional Amortization Events
	 	 	60	 
	SECTION 22. Purchase of Investor Certificates and Series Termination
	 	 	61	 
	SECTION 23. Variable Accumulation Period
	 	 	62	 
	SECTION 24. Optional Accumulation Period Commencement
	 	 	62	 
	SECTION 25. Series Yield Factor
	 	 	63	 
	SECTION 26. Ratification of Pooling and Servicing Agreement
	 	 	63	 
	SECTION 27. Counterparts
	 	 	63	 
	SECTION 28. Governing Law
	 	 	63	 
	SECTION 29. Intention of Parties
	 	 	63	 
	SECTION 30. Amendment for Sale Accounting Purposes
	 	 	64	 






i









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 31. Election Under Delaware Asset-Backed Securities Facilitation Act
	 	 	64	 
	SECTION 32. Issuance of Additional Certificates
	 	 	64	 






ii









 





EXHIBITS




	 
	EXHIBIT A: Form of Investor Certificates

	EXHIBIT B: Form of Certificateholders’ Monthly Statement

	EXHIBIT C: Form of Master Servicer’s Monthly Certificate








iii









 








DISCOVER CARD MASTER TRUST I

SERIES 2005-1 CERTIFICATES




     This Series of Master Trust Certificates is established pursuant to Section 6.06 of that
certain Amended and Restated Pooling and Servicing Agreement, dated as of November 3, 2004, by and
between DISCOVER BANK, a Delaware banking corporation (“Discover Bank”), as Master Servicer,
Servicer and Seller and U.S. BANK NATIONAL ASSOCIATION (the “Trustee”), as Trustee (the “Pooling
and Servicing Agreement”). This SERIES TERM SHEET and the ANNEX attached hereto, by and among the
Master Servicer, the Servicers, the Sellers and the Trustee, constitute the SERIES SUPPLEMENT (the
“Series Supplement”). The Pooling and Servicing Agreement and this Series Supplement together
establish the Series of Master Trust Certificates to be known as the DISCOVER CARD MASTER TRUST I,
SERIES 2005-1 CERTIFICATES.



SERIES TERM SHEET




	 	 	 
	Date of Series Term Sheet
	 	January 18, 2005.
	 
	 	 
	Group
	 	One.
	 
	 	 
	Interchange Series
	 	Yes.
	 
	 	 
	Series Initial Investor Interest
	 	1,578,948,000
	 
	 	 
	Class Initial Investor Interest of each Class of Investor Certificates
	 	Class A - $1,500,000,000; plus the face amount of any Class A Certificates
issued in an increase of the Series Investor Interest pursuant to Section 32.
	 
	 	 	
Class B - $78,948,000; plus the face
amount of any Class B Certificates issued in an increase of the Series Investor Interest pursuant to Section 32.
	 
	 	 
	Class A Expected Final Payment Date
	 	The Distribution Date in March 2008.
	 
	 	 
	Class B Expected Final Payment Date
	 	The Distribution Date in April 2008.
	 
	 	 
	Type of Structure
	 	Bullet Maturity.
	 
	 	 
	Certificate Rates
	 	Class A – LIBOR + 0.01% per annum, calculated on the basis of the actual
number of days elapsed and a 360-day year.






1









 






	 	 	 
	 
	 	Class B – LIBOR + 0.15% per annum, calculated on the basis of the actual
number of days elapsed and a 360-day year.
	 
	 	 
	Subseries
	 	Not applicable.
	 
	 	 
	Monthly Amortization Rate
	 	Not applicable.
	 
	 	 
	Prepayment Calculation Table
	 	Not applicable.
	 
	 	 
	Prepayment Determination Date
	 	Not applicable.
	 
	 	 
	Class Cap Rate
	 	Not applicable.
	 
	 	 
	Class Maximum Rate
	 	Not applicable.
	 
	 	 
	Class Interest Rate Swap
	 	Not applicable.
	 
	 	 
	Interest Rate Swap Counterparty
	 	Not applicable.
	 
	 	 
	Swap Trust Rate
	 	Not applicable.
	 
	 	 
	Swap Counterparty Rate
	 	Not applicable.
	 
	 	 
	Monthly Swap Deposit
	 	Not applicable.
	 
	 	 
	LIBOR Determination Date
	 	The second LIBOR Business Day immediately preceding the commencement of an
Interest Accrual Period.
	 
	 	 
	Series Yield Factor
	 	Initially zero, but may be increased pursuant to Section 25.
	 
	 	 
	Series Cut-Off Date
	 	January 1, 2005.
	 
	 	 
	Series Closing Date
	 	January 18, 2005.
	 
	 	 
	Date from which Interest for first Interest Payment Date Shall Accrue
	 	Series Closing Date.
	 
	 	 
	 
	 	 
	Distribution Dates
	 	The 15th day of each
calendar month (or, if such day is not a Business Day, the next succeeding Business Day) commencing in February 2005.
	 
	 	 
	Interest Payment Dates
	 	Class A - The 15th day of each calendar month (or, if such day is not a
Business Day, the next succeeding Business Day), commencing in February 2005






2









 






	 	 	 
	 
	 	Class B - The 15th day of each
calendar month (or, if such day is not a Business Day, the next succeeding Business Day), commencing in February 2005.
	 
	 	 
	Statement Dates
	 	Each Distribution Date, commencing in February 2005.
	 
	 	 
	Principal Payment Date
	 	Not applicable.
	 
	 	 
	Interest Calculation Dates
	 	Not applicable.
	 
	 	 
	Accumulation Commencement Date
	 	Not applicable.
	 
	 	 
	Accumulation Period
	 	Unless an Amortization Event shall have occurred prior thereto, the period
commencing on the Principal Commencement Date and ending on the earliest to occur of (x) the payment in full of
the Series Invested Amount, (y) the Amortization Commencement Date, and (z) the Series Termination Date.
	 
	 	 
	Accumulation Amount
	 	(a) Through the Class A Expected Final Payment Date, (i) $125,000,000 or (ii)
if the Master Servicer elects to delay commencement of the Accumulation Period in accordance with Section 23 or if
an increase in the Series Investor Interest pursuant to Section 32 has occurred, the Class A Initial Investor Interest
divided by the number of Distribution Dates from the commencement of the Accumulation Period through and including
the Class A Expected Final Payment Date, and (b) thereafter, (i) $78,948,000 or (ii) if an increase in the Series
Investor Interest pursuant to Section 32 has occurred, the Class B Initial Investor Interest.






3









 






	 	 	 
	Principal Commencement Date
	 	The first day of the Due Period related to the April 2007 Distribution Date
(or such later Distribution Date as the Master Servicer may elect in accordance with Section 23).
	 
	 	 
	Revolving Period
	 	From the Series Cut-Off Date to but excluding the earlier to occur of (i) the Principal
Commencement Date, and (ii) the Amortization Commencement Date.
	 
	 	 
	Controlled Liquidation Period
	 	Not applicable.
	 
	 	 
	Early Accumulation Period
	 	Not applicable.
	 
	 	 
	Type of Credit Enhancement
	 	Cash collateral account.
	 
	 	 
	Stated Shared Credit Enhancement Amount
	 	There shall be no Shared Credit Enhancement.
	 
	 	 
	Stated Class A Credit Enhancement Amount
	 	There shall be no Class A Cash Collateral Credit Enhancement.
	 
	 	 
	Stated Class B Credit Enhancement Amount
	 	$118,421,100.
	 
	 	 
	Credit Enhancement Provider
	 	Collectively, the one or more lenders making a loan in order to provide
the initial funds on deposit in the Credit Enhancement Account, or any successor provider of the Credit Enhancement.
	 
	 	 
	Maximum Shared Credit Enhancement Amount
	 	There shall be no Shared Credit Enhancement.
	 
	 	 
	Maximum Class A Credit Enhancement Amount
	 	There shall be no Class A Cash Collateral Credit Enhancement.
	 
	 	 
	Maximum Class B Credit Enhancement Amount
	 	On any Distribution Date (a) prior to the making of an Effective Alternative Credit Support
Election, the greatest of (i) $15,789,480, (ii) an amount equal to 1% of the Series Initial
Investor Interest, and (iii) (x) if a Supplemental Credit Enhancement Event has not occurred, an amount
equal to 7.5% of the Series Investor Interest as of the last day of the related Due Period, or
(y) if a Supplemental Credit Enhancement Event has occurred, an amount equal to 8.0% of the Series
Investor Interest as of the last day of the related Due






4









 






	 	 	 
	 
	 	
Period or (b) subsequent to the making of an Effective Alternative Credit Support Election, the greatest of
(i) $15,789,480, (ii) an amount equal to 1% of the Series Initial Investor Interest, and (iii) an
amount equal to 12.5% of the Series Investor Interest as of the last day of the related Due Period;
provided, however, that if an Amortization Event with respect to the Series established hereby occurs, the
Maximum Class B Credit Enhancement Amount for each Distribution Date thereafter shall equal the Maximum Class B Credit
Enhancement Amount for the Distribution Date immediately preceding the occurrence of the Amortization Event; and provided,
further, that if a Credit Enhancement Drawing has been made, until such time as the Available
Class B Credit Enhancement Amount has been reinstated in an amount at least equal to the amount of such
Credit Enhancement Drawing, the Maximum Class B Credit Enhancement Amount shall be the Maximum Class B
Credit Enhancement Amount as of the date of such Credit Enhancement Drawing.
	 
	 	 
	Total Maximum Credit Enhancement Amount
	 	On any Distribution Date, the Maximum Class B Credit Enhancement Amount for such Distribution Date.
	 
	 	 
	Additional Credit Support Amount
	 	The lesser of (x)(i) prior to the occurrence of a Supplemental Credit Enhancement Event, 5% of the Series
Initial Investor Interest or (ii) following the occurrence of a Supplemental Credit Enhancement Event, 4.5% of the Series Initial
Investor Interest and (y) the difference between the Maximum Class B Credit Enhancement Amount
(after giving effect to an Alternative Credit Support Election) and the Available Class B Credit Enhancement Amount
(immediately before giving effect to the Alternative Credit Support Election).
	 
	 	 
	Supplemental Credit Enhancement Amount
	 	The lesser of (x)(i) prior to the occurrence of an Alternative Credit Support Election, 0.5% of the
Series Initial Investor Interest or (ii) zero following the occurrence of an






5









 






	 	 	 
	 
	 	Alternative Credit Support Election and (y) the difference between the  Maximum Class B Credit
Enhancement Amount (after giving effect to the occurrence of a Supplemental Credit Enhancement Event) and the Available Class B Credit Enhancement Amount (immediately before giving effect
to the occurrence of a Supplemental Credit Enhancement Event).
	 
	 	 
	Initial Subordinated Amount
	 	$197,368,500.
	 
	 	 
	Additional Subordinated Amount
	 	Prior to the occurrence of a Supplemental Credit Enhancement Event, 5% of the Series Initial
Investor Interest and following the occurrence of a Supplemental Credit Enhancement Event, 4.5% of the
Series Initial Investor Interest.
	 
	 	 
	Supplemental Subordinated Amount
	 	Prior to the effectiveness of an Alternative Credit Support Election, 0.5% of the Series
Initial Investor Interest and zero following the effectiveness of an Alternative Credit Support Election.
	 
	 	 
	Series Buffer Amount
	 	Zero.
	 
	 	 
	Interchange Subgroup Buffer Amount
	 	Zero.
	 
	 	 
	Group Buffer Amount
	 	Zero.
	 
	 	 
	Investor Servicing Fee Percentage
	 	2.0% per annum calculated on the basis of a 360-day year of twelve 30-day months.
	 
	 	 
	Supplemental Servicing Fee Percentage
	 	Zero.
	 
	 	 
	Amount of Additional Funds
	 	Initially, zero.
	 
	 	 
	Eligible for Reallocations to and from Other
Series in Group
	 	Yes.
	 
	 	 
	Series Termination Date
	 	The first Business Day following the Distribution Date in September 2010.
	 
	 	 
	Estimated Investment Shortfall
	 	On any date of determination, the positive difference, if any, between (i) the Certificate Rate
for the Class for whose benefit the amounts on deposit in the Series Principal Funding Account are held
as of such date of determination and (ii) the






6









 






	 	 	 
	 
	 	weighted average yield (expressed as a Money Market Yield) on the investments in the Series
Principal Funding Account as of such date of determination.
	 
	 	 
	Estimated Yield
	 	On any date of determination, the Portfolio Yield for the immediately preceding Due Period less 2.00%.
	 
	 	 
	Classes, if any, subject to Regulation S
restrictions
	 	Not applicable.
	 
	 	 
	Classes, if any, subject to ERISA restrictions
	 	Class B.
	 
	 	 
	Bearer Certificates
	 	Not applicable.
	 
	 	 
	Registered Certificates
	 	Class A and Class B Certificates.
	 
	 	 
	Class A Certificate
	 	Each certificate executed by the Sellers and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1.
	 
	 	 
	Class B Certificate
	 	Each certificate executed by the Sellers and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.
	 
	 	 
	Principal Paying Agent
	 	Class A – Not applicable.
	 
	 	 
	 
	 	Class B – Not applicable.
	 
	 	 
	Paying Agents
	 	Class A and Class B – the Corporate Trust Office of the Trustee.







7









 








     IN WITNESS WHEREOF, the Sellers, the Master Servicer, the Servicers and the Trustee have
caused this Series Supplement to be duly executed by their respective officers thereunto duly
authorized as of the date and year first above written.



	 	 	 
	

	 	DISCOVER BANK,

as Seller, Master Servicer and Servicer
	 
	 
	 	/s/
Michael F. Rickert
	

	 	 
	

	 	Michael F. Rickert
	

	 	Vice President, Chief Accounting Officer and
	

	 	Treasurer
	 
	 	 
	

	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee
	 
	 
	 	/s/ Patricia M. Child
	

	 	 
	

	 	Patricia M. Child
	

	 	Vice President






 









 






ANNEX




     In consideration of the mutual agreements herein contained, each party agrees as follows for
the benefit of the other parties and for the benefit of the Certificateholders:



SECTION 1. Definitions




     (a) Capitalized terms not otherwise defined in this Series Supplement (including the Series
Term Sheet) shall have the meanings ascribed to them in the Pooling and Servicing Agreement.
Capitalized terms that refer to a Series refer to the Series established hereby or a Subseries, if
any, established in the Series Term Sheet of this Series Supplement specifying that such Subseries
is to be treated as a separate Series herein and under the Pooling and Servicing Agreement and all
of the other Series Supplements of Discover Card Master Trust I. Capitalized terms that refer to a
Class refer to a Class of the Series or Subseries, if any, established hereby, as applicable,
unless the context otherwise clearly requires.



     (b) The following terms have the definitions set forth below with respect to the Series
established hereby, unless the context otherwise clearly requires:



     “Accumulation Amount,” if applicable, shall have the meaning set forth in the Series Term
Sheet; provided, however, that such amount may be adjusted pursuant to Section 23 or 24.



     “Accumulation Commencement Date,” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Accumulation Period,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Additional Credit Support Amount” shall have the meaning set forth in the Series Term Sheet.



     “Additional Subordinated Amount” shall have the meaning set forth in the Series Term Sheet.



     “Alternative Credit Support Election” shall mean an election made by the Sellers pursuant to
Section 12.



     “Amortization Commencement Date” shall mean the date on which an Amortization Event is deemed
to occur pursuant to Section 20 hereof.



     “Amortization Event” shall mean any event specified in Section 9.01 of the Pooling and
Servicing Agreement or in Section 20 hereof.



     “Amortization Period” shall mean the period from, and including, the Amortization Commencement
Date to, and including, the earlier of (i) the date of the final distribution to Investor
Certificateholders of the Series established hereby and (ii) the Series Termination Date. The
first Distribution Date of the Amortization Period shall be the Distribution Date in the calendar
month following the Amortization Commencement Date.



 









 





     “Available Class A Credit Enhancement Amount,” if applicable, shall have the meaning set forth
in the Series Term Sheet. Notwithstanding the foregoing, the Available Class A Credit Enhancement
Amount for any Distribution Date shall not exceed the Maximum Class A Credit Enhancement Amount for
such Distribution Date.



     “Available Class B Credit Enhancement Amount” shall mean, with respect to the first
Distribution Date, the Stated Class B Credit Enhancement Amount, and, thereafter, shall mean the
amount available to be drawn under the Credit Enhancement with respect to the Available Class B
Credit Enhancement Amount from time to time, which on any date of determination shall be equal to
the Available Class B Credit Enhancement Amount for the immediately preceding Distribution Date
minus the amount of all Credit Enhancement Drawings with respect to the Available Class B Credit
Enhancement Amount on or since such immediately preceding Distribution Date, plus the amount of all
payments made to the Trustee as administrator of the Credit Enhancement with respect to the
Available Class B Credit Enhancement Amount pursuant to Section 9 plus, following an Effective
Alternative Credit Support Election, the Additional Credit Support Amount and, plus, following a
Supplemental Credit Enhancement Event, the Supplemental Credit Enhancement Amount plus following an
increase in the Series Investor Interest pursuant to Section 32, the Increased Credit Enhancement
Amount; provided, however, that from and after the Fully Funded Date, if any, the Available Class B
Credit Enhancement Amount shall equal zero. Notwithstanding the foregoing, the Available Class B
Credit Enhancement Amount for any Distribution Date shall not exceed the Maximum Class B Credit
Enhancement Amount for such Distribution Date.



     “Available Shared Credit Enhancement Amount,” if applicable, shall mean, with respect to the
first Distribution Date, the Stated Shared Credit Enhancement Amount, and, thereafter, shall mean
the amount available to be drawn under the Credit Enhancement with respect to the Available Shared
Credit Enhancement Amount from time to time, which on any date of determination shall be equal to
the Available Shared Credit Enhancement Amount for the immediately preceding Distribution Date
minus the amount of all Credit Enhancement Drawings with respect to the Available Shared Credit
Enhancement Amount on or since such immediately preceding Distribution Date, and plus the amounts
of all payments made to the Trustee as administrator of the Credit Enhancement with respect to the
Available Shared Credit Enhancement Amount pursuant to Section 9. Notwithstanding the foregoing,
the Available Shared Credit Enhancement Amount for any Distribution Date shall not exceed the
Maximum Shared Credit Enhancement Amount for such Distribution Date.



     “Available Subordinated Amount,” if there is a Subordinate Class with respect to Class A,
shall mean, on a Distribution Date, the sum of




            (a) (i) with respect to the first Distribution Date, the Initial Subordinated Amount or
(ii) with respect to any other Distribution Date, the Available Subordinated Amount after
giving effect to all adjustments on the prior Distribution Date; and




            (b) the amount of Series Excess Servicing;



2









 




as such amount may be (x) reduced pursuant to the provisions of Section 9 to take into account (i)
the amount of Class A and Class B Excess Servicing used to reimburse the Class A Cumulative
Investor Charged-Off Amount, (ii) the amount of Class B Excess Servicing used to reduce the Class A
Required Amount Shortfall, (iii) the amount of the Class B Subordinated Payment and (iv) the amount
of any reduction in the Class B Investor Interest resulting from the reimbursement of the Class A
Cumulative Investor Charged-Off Amount, in each case for such Distribution Date, and (y) increased
pursuant to the provisions of Section 9 to take into account the application of amounts on deposit
in the Group Finance Charge Collections Reallocation Account and Group Interchange Reallocation
Account (i) to reduce the Class B Required Amount Shortfall, (ii) to reduce the Class B Cumulative
Investor Charged-Off Amount and (iii) to increase the Available Class B Credit Enhancement Amount,
in each case for such Distribution Date; provided, however, that from and after the Fully Funded
Date, if any, the Available Subordinated Amount will equal zero.



Upon the occurrence of a Supplemental Credit Enhancement Event, the Available Subordinated Amount
will be increased by the Supplemental Subordinated Amount. In addition, on the first Distribution
Date following an Effective Alternative Credit Support Election, the Available Subordinated Amount
shall be increased by the Additional Subordinated Amount. On the date of an increase in the Series
Investor Interest pursuant to Section 32, the Available Subordinated Amount shall be increased by
the Increased Issuance Subordinated Amount. In no event, however, shall the Available Subordinated
Amount exceed (i) through the last Distribution Date preceding an Effective Alternative Credit
Support Election, the Initial Subordinated Amount plus the Supplemental Subordinated Amount and the
Increased Issuance Subordinated Amount and (ii) thereafter, the sum of the Initial Subordinated
Amount, the Supplemental Subordinated Amount, the Increased Issuance Subordinated Amount and the
Additional Subordinated Amount.




     “Calculation Period,” if applicable, shall have the meaning specified in the applicable
interest rate cap agreement.



     “Cedel” shall mean Clearstream Banking.



     “Certificate Interest” shall mean, for any Class for any Interest Payment Date, the product of
(a) the Class Invested Amount for such Class for such Interest Payment Date and (b) a fraction the
numerator of which is (1) with respect to each Class that has no Subclasses, the Certificate Rate
for such Class or (2) with respect to each Class that has two or more Subclasses, the Class
Weighted Average Certificate Rate, and the denominator of which is (x) if the relevant Certificate
Rate is to be calculated on the basis of the actual number of days elapsed and a 360-day year, 360
divided by the actual number of days from and including the immediately preceding Interest Payment
Date (or, in the case of the first Interest Payment Date, from and including the Series Closing
Date) to but excluding the current Interest Payment Date or (y) if the relevant Certificate Rate is
to be calculated on the basis of a 360-day year of twelve 30-day months, twelve divided by the
number of Distribution Dates from and including the preceding Interest Payment Date to but
excluding the current Interest Payment Date (or, in the case of the first Interest Payment Date,
360 divided by the number of days from and including the Series Closing Date to but excluding the
15th day of the month in which current Interest Payment Date occurs, assuming 30-day months);
provided, that, if an increase in the Series Investor Interest has



3









 




been made pursuant to Section 32 on or prior to such Interest Payment Date but during the
calendar month in which such Interest Payment Date occurred, the Class Invested Amount for each
Class for such Interest Payment Date shall be deemed to exclude the portion of the Class Invested
Amount represented by Investor Certificates issued in connection with such increase and such
Investor Certificates shall only bear interest from such Interest Payment Date; and provided,
further, that if an increase in the Series Investor Interest has been made pursuant to Section 32
during the related Interest Accrual Period but prior to the calendar month in which such Interest
Payment Date occurred, any Investor Certificates so issued shall bear interest from the prior
Interest Payment Date (or, in the case of the first Interest Payment Date, from the Series Closing
Date).




     “Certificate Principal” shall mean, with respect to each Class, the principal payable in
respect of such Class of Investor Certificates.



     “Certificate Rate,” with respect to any Class or Subclass, shall mean the certificate rate set
forth in the Series Term Sheet with respect to such Class or Subclass, as such rate may be adjusted
as of the beginning of each Interest Accrual Period, if applicable; provided, however, that the
Certificate Rate for any Class or Subclass that does not have a fixed Certificate Rate shall not
exceed the Class Cap Rate or Class Maximum Rate, as applicable, for such Class or Subclass; and
provided, further, that any interest on the Investor Certificates (including any interest accrued
with respect to any Class Deficiency Amount) shall be payable or distributed to the Investor
Certificateholders only to the extent permitted by applicable law.



     “Class A Cash Collateral Credit Enhancement” shall mean Credit Enhancement available in the
Credit Enhancement Account for the benefit of the Class A Investor Certificates.



     “Class Additional Funds,” if applicable, shall mean, with respect to any Class for any
Distribution Date, an amount equal to the product of (i) a fraction the numerator of which is the
Class Investor Interest and the denominator of which is the sum of the Class Investor Interests for
each Class of the Series established hereby and (ii) the amount of Series Additional Investor
Funds, in each case for such Distribution Date.



     “Class Alternative Deficiency Amount” shall mean, with respect to each Class, on any Payment
Date, the Class Deficiency Amount that would have been calculated for such Class on such Payment
Date if the aggregate unreimbursed Investor Losses on such Payment Date equaled zero.



     “Class B Available Collections” shall mean, if there is a Subordinated Class with respect to
Class A, with respect to any Distribution Date, an amount equal to the sum of (i) Class B Available
Finance Charge Collections for such Distribution Date and (ii) Class B Principal Collections for
such Distribution Date.



     “Class B Available Finance Charge Collections” shall mean, if there is a Subordinate Class
with respect to Class A, with respect to any Distribution Date, an amount equal to the sum of Class
B Finance Charge Collections, Class B Yield Collections, if any, Class B Investment



4









 




Income, if applicable, Class B Interchange in each case for the related Due Period and Class B
Additional Funds for such Distribution Date (less Class B Excess Servicing).




     “Class Cap Rate,” if applicable, shall mean, with respect to a Class or Subclass that does not
have a fixed or maximum Certificate Rate, the rate that is specified as such in the Series Term
Sheet and in the Class Interest Rate Cap with respect to such Class or Subclass.



     “Class Charge-Off Reimbursement Amount” shall mean, with respect to any Class with respect to
any Distribution Date, the total amount by which the Class Cumulative Investor Charged-Off Amount
for such Class is reduced on such Distribution Date pursuant to Section 9.



     “Class Cumulative Investor Charged-Off Amount” with respect to each Class for any Distribution
Date, shall mean the sum of the Class Investor Charged-Off Amounts for such Class for all preceding
Due Periods that have not been reimbursed pursuant to Section 9 prior to such Distribution Date,
plus the Class Investor Charged-Off Amount for such Class for the Due Period related to such
Distribution Date, as adjusted pursuant to Section 9 on such Distribution Date. The Class
Cumulative Investor Charged-Off Amount with respect to each Class initially shall be zero.



     “Class Deficiency Amount” shall mean, with respect to each Class, on any Payment Date, the
amount, if any, by which (a) the sum of (i) Certificate Interest for such Class accrued since the
immediately preceding Payment Date, (ii) if, since the immediately preceding Payment Date and prior
to the current Payment Date, a Reimbursed Loss Event has occurred, the sum of (A) the Reimbursed
Loss Interest for each previous Distribution Date since the last Distribution Date on which
Investor Losses for such Class equaled zero and (B) the Reimbursed Loss Interest Gross-up Amount
for each previous Distribution Date since the last Distribution Date on which the aggregate amount
of unreimbursed Investor Losses for such Class equaled zero, (iii) the Class Deficiency Amount on
the immediately preceding Payment Date, and (iv) the Class Deficiency Amount on the immediately
preceding Payment Date multiplied by the product of (A) a fraction the numerator of which is the
weighted average of the Certificate Rates or of the Class Weighted Average Certificate Rates, as
applicable, for such Class for the relevant Due Periods and the denominator of which is (x) if the
relevant Certificate Rate is to be calculated on the basis of the actual number of days elapsed and
a 360-day year, 360 divided by the actual number of days from and including the immediately
preceding Distribution Date to but excluding the current Distribution Date or (y) if the relevant
Certificate Rate is to be calculated on the basis of a 360-day year of twelve 30-day months, twelve
and (B) the number of Distribution Dates from and including the preceding Payment Date to but
excluding the current Payment Date exceeds (b) the amount deposited since the immediately preceding
Payment Date into the Series Interest Funding Account pursuant to Section 10(a)(2)(A).



     “Class Excess Servicing” shall mean, with respect to each Class, on any Distribution Date, the
positive difference, if any, between (i) the sum of Class Finance Charge Collections for the
related Due Period, Class Yield Collections for the related Due Period, if any, Class Investment
Income for the related Due Period, if any, Class Interchange for the related Due Period, if any,
and Class Additional Funds for such Distribution Date, if any, and (ii) the Class Required Amount.



5









 





     “Class Expected Final Payment Date” with respect to each Class, if applicable, shall mean the
date designated as such in the Series Term Sheet.



     “Class Final Maturity Date” with respect to each Class, if applicable, shall mean the date
designated as such in the Series Term Sheet.



     “Class Finance Charge Collections” shall mean, with respect to any Class, with respect to any
day or any Distribution Date or Trust Distribution Date, as applicable, an amount equal to the
product of (x) the Class Percentage with respect to Finance Charge Collections for the related
Distribution Date and (y) the amount of Finance Charge Collections for such day or for the related
Due Period, as applicable; provided, however, that Class Finance Charge Collections for each Class
shall be increased by the lesser of (i) the amount of Class Investment Shortfall for such Class and
(ii) an amount equal to the product of the total amount of Finance Charge Collections otherwise
allocable to Discover Bank on behalf of the Holder of the Seller Certificate for the related Due
Period and a fraction the numerator of which is the Class Invested Amount for such Class and the
denominator of which is the Aggregate Invested Amount; and provided, further, that notwithstanding
the foregoing, Class Finance Charge Collections for each Class shall not, with respect to any such
day, Distribution Date or Trust Distribution Date during the Accumulation Period or the Early
Accumulation Period, as applicable, exceed the amount that would be available if the Class
Percentage with respect thereto were the percentage equivalent of a fraction the numerator of which
is the amount of the Class Investor Interest on the last day of the Due Period prior to the
commencement of the Accumulation Period or the Early Accumulation Period, and the denominator of
which is the greater of (i) the amount of Principal Receivables in the Trust on the first day of
the related Due Period and (ii) the sum of the numerators used in calculating the components of the
Series Percentage with respect to Finance Charge Collections for each Series then outstanding
(including the Series established hereby) as of such day, Distribution Date or Trust Distribution
Date, as applicable.



     “Class Initial Investor Interest” shall mean, with respect to each Class, the aggregate face
amount of Investor Certificates of such Class as specified in the Series Term Sheet.



     “Class Interchange” shall mean, with respect to any Class, with respect to any Distribution
Date or Trust Distribution Date, as applicable, an amount equal to the product of (x) the Class
Percentage with respect to Interchange for the related Distribution Date and (y) Interchange for
the related Due Period.



     “Class Interest Rate Cap,” if applicable, shall mean, with respect to a Class or Subclass that
does not have a fixed or maximum Certificate Rate, the interest rate cap agreement or other
interest rate protection for the benefit of the Investor Certificateholders of such Class or
Subclass, dated on or before the Series Closing Date, between the Trustee, acting on behalf of the
Trust, and the Interest Rate Cap Provider, or any Replacement Interest Rate Cap or Qualified
Substitute Cap Arrangement.



     “Class Interest Rate Cap Payment” shall mean, with respect to a Class or Subclass that does
not have a fixed or maximum Certificate Rate, with respect to any Interest Payment Date,



6









 




any payment required to be made on such Interest Payment Date by the Interest Rate Cap
Provider with respect to the Class Interest Rate Cap for such Class or Subclass.




     “Class Interest Rate Swap,” if applicable, shall mean, with respect to a Class or Subclass,
the interest rate swap agreement or other interest rate protection agreement with respect to any
Class or Subclass, dated on the Series Closing Date, between the Trust and the Interest Rate Swap
Counterparty, and any replacement or successor interest rate swap agreement or interest rate
protection agreement.



     “Class Invested Amount” shall mean, with respect to any Class for any Distribution Date, an
amount equal to the Class Initial Investor Interest minus the sum of (a) the aggregate amount of
payments of Certificate Principal paid to such Class of Investor Certificateholders, in each case
prior to such Distribution Date, (b) the aggregate amount of Investor Losses of such Class not
reimbursed prior to such Distribution Date and (c) the aggregate amount of losses of principal on
investments of funds on deposit for the benefit of such Class in the Series Principal Funding
Account, if applicable.



     “Class Investment Income” shall mean, with respect to any Class, income from the investment of
funds on deposit in the Series Principal Funding Account for the benefit of such Class less Excess
Income.



     “Class Investment Shortfall” with respect to each Class with respect to any Distribution Date
during the Accumulation Period or the Early Accumulation Period, if applicable, shall mean an
amount equal to the positive difference, if any, between (i) one-twelfth of the product of (a) (x)
with respect to each Class that has no Subclasses, the Certificate Rate, or (y) with respect to
each Class that has two or more Subclasses, the Class Weighted Average Certificate Rate, in each
case for the related Due Period, and (b) the amount on deposit in the Series Principal Funding
Account for the benefit of such Class as of the end of the previous Distribution Date and (ii)
Class Investment Income for the related Due Period.



     “Class Investor Charged-Off Amount” shall mean, with respect to each Class for any
Distribution Date, an amount equal to the sum of (i) the product of (a) the Charged-Off Amount for
such Distribution Date and (b) the Class Percentage with respect to the Charged-Off Amount and (ii)
if there is a Subordinate Class with respect to Class A, with respect to Class B only, the sum of
(a) the positive difference, if any, between (x) the Class B Subordinated Payment and (y) the
amount of Class B Available Finance Charge Collections for the related Due Period and (b) the
amount by which the Class A Cumulative Investor Charged-Off Amount is reduced by way of a
reallocation of Class B Investor Interest pursuant to Section 9.



     “Class Investor Interest” shall mean, with respect to any Class for any Distribution Date, an
amount equal to the Class Invested Amount for such Class for such Distribution Date minus, if
applicable, the aggregate amount on deposit in the Series Principal Funding Account for the benefit
of such Class in respect of Principal Collections.



     “Class Maximum Rate,” if applicable, shall have the meaning set forth in the Series Term Sheet
with respect to any Class or Subclass.



7









 





     “Class Modified Required Amount” with respect to any Class on any Distribution Date, shall
mean the Class Required Amount for such Distribution Date minus the sum of all accrued but unpaid
Class Monthly Servicing Fees.



     “Class Monthly Deficiency Amount” with respect to any Class on any Distribution Date, shall
have the meaning set forth in Section 10(a)(2)(A). The Class Monthly Deficiency Amount for each
Class initially shall be zero.



     “Class Monthly Servicing Fee” with respect to any Class for any Distribution Date, shall mean
an amount equal to the product of (x) a fraction the numerator of which shall be the Class Investor
Interest and the denominator of which shall be the Series Investor Interest, in each case on the
first day of the related Due Period and (y) the amount of the Investor Servicing Fee for the
related Due Period. For purposes of this definition, the Class Investor Interest on the first day
of any Due Period in which the Series Closing Date or an increase in the Series Investor Interest
pursuant to Section 32 has occurred shall include the Class Investor Interest of all Investor
Certificates issued during such Due Period.



     “Class Percentage” shall mean, with respect to any Class with respect to any Distribution Date
or any Trust Distribution Date, as applicable:




            (a) when used with respect to the Charged-Off Amount, the percentage
equivalent of a fraction the numerator of which shall be the amount of the Class
Investor Interest and the denominator of which shall be the greater of (i) the
amount of Principal Receivables in the Trust and (ii) the Aggregate Investor
Interest, in each case on the first day of the related Due Period; or




            (b) when used with respect to Principal Collections prior to the occurrence of
a Fixed Principal Allocation Event, the percentage equivalent of a fraction the
numerator of which shall be the amount of the Class Investor Interest on the first
day of the related Due Period and the denominator of which shall be the greater of
(i) the amount of Principal Receivables in the Trust on the first day of the related
Due Period and (ii) the sum of the numerators used in calculating the components of
the Series Percentage with respect to Principal Collections for each Series then
outstanding (including the Series established hereby) as of such Distribution Date
or Trust Distribution Date, as applicable; or




            (c) when used with respect to Principal Collections on and after the
occurrence of a Fixed Principal Allocation Event, the percentage equivalent of a
fraction, the numerator of which shall be the amount of the Class Investor Interest
on the last day of the Due Period prior to the occurrence of a Fixed Principal
Allocation Event and the denominator of which shall be the greater of (i) the amount
of Principal Receivables in the Trust on the first day of the related Due Period and
(ii) the sum of the numerators used in calculating the components of the Series
Percentage with respect to Principal Collections for each Series then outstanding
(including the Series established hereby) as of such Distribution Date or Trust
Distribution Date, as applicable; provided, however, that from and after



8









 






the Fully Funded Date, if any, the Class Percentage with respect to Principal
Collections will equal zero; or




            (d) when used with respect to Finance Charge Collections during the Revolving
Period and the Accumulation Period or the Controlled Liquidation Period, as
applicable, and provided that an Effective Alternative Credit Support Election has
been made, during the Early Accumulation Period or the Amortization Period, the
percentage equivalent of a fraction the numerator of which shall be the amount of
the Class Investor Interest on the first day of the related Due Period and the
denominator of which shall be the greater of (i) the amount of Principal Receivables
in the Trust on the first day of the related Due Period and (ii) the sum of the
numerators used in calculating the components of the Series Percentage with respect
to Finance Charge Collections for each Series then outstanding (including the Series
established hereby) as of such Distribution Date or Trust Distribution Date, as
applicable; provided, however, that from and after the Fully Funded Date, if any,
the Class Percentage with respect to Finance Charge Collections will equal zero; or




            (e) when used with respect to Finance Charge Collections during the Early
Accumulation Period or the Amortization Period, provided that an Effective
Alternative Credit Support Election has not been made, the percentage equivalent of
a fraction the numerator of which shall be the amount of the Class Investor Interest
on the last day of the Due Period prior to the occurrence of an Early Accumulation
Event or an Amortization Event, and the denominator of which shall be the greater of
(i) the amount of Principal Receivables in the Trust on the first day of the related
Due Period and (ii) the sum of the numerators used in calculating the components of
the Series Percentage with respect to Finance Charge Collections for each Series
then outstanding (including the Series established hereby) as of such Distribution
Date or Trust Distribution Date, as applicable; provided, however, that from and
after the Fully Funded Date, if any, the Class Percentage with respect to Finance
Charge Collections will equal zero; or




            (f) when used with respect to Interchange, the percentage equivalent of a
fraction the numerator of which shall be the amount of Class Investor Interest and
the denominator of which shall be the greater of (i) the amount of Principal
Receivables in the Trust and (ii) the Aggregate Investor Interest, in each case on
the first day of the related Due Period.



     For purposes of this definition, the Class Investor Interest as of the first day of any Due
Period in which the Series Closing Date has occurred or an increase in the Series Investor Interest
has been made pursuant to Section 32 shall include the Class Investor Interest of all Investor
Certificates issued during or prior to such Due Period.



     “Class Principal Collections” shall mean, with respect to any Class with respect to any day or
any Distribution Date or Trust Distribution Date, as applicable, an amount equal to the



9









 







product of (x) the Class Percentage with respect to Principal Collections for the related
Distribution Date and (y) the amount of Principal Collections for such day or for the related Due
Period, as applicable.



     “Class Required Amount” with respect to any Class on any Distribution Date, shall mean the sum
of (i) the product of (a) the Class Invested Amount with respect to such Class for such
Distribution Date and (b) a fraction, the numerator of which is the Certificate Rate for such
Class, and the denominator of which is (x) if the relevant Certificate Rate is to be calculated on
the basis of the actual number of days elapsed and a 360-day year, 360 divided by the actual number
of days from and including the immediately preceding Distribution Date (or in the case of the first
Distribution Date, from and including the Series Closing Date) to but excluding the current
Distribution Date or (y) if the relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve (or in the case of the first Distribution Date, 360
divided by the number of days from and including the Series Closing Date to but excluding the 15th
day of the month in which the current Interest Payment Date occurs, assuming each month has 30
days), (ii) the Class Monthly Deficiency Amount on the immediately preceding Distribution Date,
(iii) the Class Deficiency Amount on the immediately preceding Payment Date multiplied by a
fraction the numerator of which is the weighted average of the Certificate Rates or of the Class
Weighted Average Certificate Rates, as applicable, for such Class for each Due Period subsequent to
the immediately preceding Payment Date plus 2.00% per annum and the denominator of which is (x) if
the relevant Certificate Rate is to be calculated on the basis of the actual number of days elapsed
and a 360-day year, 360 divided by the actual number of days from and including the immediately
preceding Distribution Date to but excluding the current Distribution Date or (y) if the relevant
Certificate Rate is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve, (iv) if on the immediately preceding Distribution Date a Reimbursed Loss Event occurred,
the sum of (A) the Reimbursed Loss Interest for each previous Distribution Date since the last
Distribution Date on which the aggregate amount of unreimbursed Investor Losses for such Class
equaled zero, (B) the Reimbursed Loss Interest Gross-up Amount for each previous Distribution Date
since the last Distribution Date on which the aggregate amount of unreimbursed Investor Losses for
such Class equaled zero and (C) for any Distribution Date following the Distribution Date
immediately following the Reimbursed Loss Event to and including the next Payment Date, the
Reimbursed Loss Interest Gross-up Amount for such Distribution Date and (v) the sum of all accrued
but unpaid Class Monthly Servicing Fees; provided, that, if an increase in the Series Investor
Interest has been made pursuant to Section 32 on or prior to such Distribution Date but during the
calendar month in which such Distribution Date occurred, the Class Invested Amount for each Class
for such Distribution Date shall be deemed to exclude the portion of the Class Invested Amount
represented by Investor Certificates issued in connection with such increase; and provided,
further, that if an increase in the Series Investor Interest has been made pursuant to Section 32
during the prior calendar month, the amount in clause (i) above shall be deemed to include the
portion of the Class Invested Amount represented by Investor Certificates issued as part of such
increase as if such increase had taken effect on such prior Distribution Date (or, in the case of
the first Distribution Date, on the Series Closing Date).



     “Class Required Amount Shortfall” with respect to any Class on any Distribution Date, shall
have the meaning set forth in Section 9.



10









 





     “Class Subordinated Payment” shall mean, if there is a Subordinate Class with respect to Class
A, with respect to any Distribution Date, the amount, if any, withheld from Class B Available
Collections and paid to or for the benefit of the Class A Certificateholders pursuant to Section 9
on such Distribution Date.



     “Class Weighted Average Certificate Rate,” if applicable, shall mean, for any Class composed
of two or more Subclasses, for any Distribution Date, the percentage equivalent of a fraction the
numerator of which is the sum of, for each Subclass of such Class, the product of the Class
Invested Amount for such Subclass and the Certificate Rate for such Subclass for such Distribution
Date, and the denominator of which is the Class Invested Amount for such Class.



     “Class Yield Collections” shall mean, with respect to any Class, with respect to any day or
any Distribution Date, as applicable, an amount equal to the product of the Class Yield Percentage
for such Class and the amount of Series Yield Collections for such day or the related Due Period,
as applicable.



     “Class Yield Percentage” shall mean, with respect to any Class on any Distribution Date (i)
during the Revolving Period and the Accumulation Period or the Controlled Liquidation Period, as
applicable, and, provided that an Effective Alternative Credit Support Election has been made,
during the Early Accumulation Period or the Amortization Period, the percentage equivalent of a
fraction the numerator of which shall be the Class Investor Interest for such Class and the
denominator of which shall be the Series Investor Interest, in each case as of the first day of the
related Due Period; or (ii) during the Early Accumulation Period or the Amortization Period,
provided that an Effective Alternative Credit Support Election has not been made, the percentage
equivalent of a fraction the numerator of which shall be the amount of the Class Investor Interest
on the last day of the Due Period prior to the occurrence of an Early Accumulation Event or
Amortization Event and the denominator of which shall be the amount of the Series Investor Interest
on the last day of the Due Period prior to the occurrence of an Early Accumulation Event or
Amortization Event.



     “Commercial Paper Determination Date,” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Commercial Paper Rate,” if applicable, shall mean, with respect to any Commercial Paper
Determination Date, the rate equal to the Money Market Yield on such Commercial Paper Determination
Date of the rate for commercial paper having a maturity of 30 days as published by the Board of
Governors of the Federal Reserve System in “Statistical Release H.15 (519), Selected Interest
Rates,” or any successor publication, under the heading “Commercial Paper.” In the event that such
rate is not published on such date, then the Commercial Paper Rate will be the Money Market Yield
on such date of the rate for Commercial Paper having a maturity of 30 days as published by the
Federal Reserve Bank of New York in the daily statistical release “Composite 3:30 p.m. Quotations
for U.S. Government Securities” (“Composite Quotations”) under the heading “Commercial Paper.” If
on such date the rate for commercial paper is not yet published in either H.15 (519) or Composite
Quotations, the Commercial Paper Rate for such date shall be calculated by the Trustee and shall be
the Money Market Yield of the arithmetic mean (rounded to the nearest one-hundredth of a percent,
with five hundred one-thousandths of a



11









 







percent rounded upward) of the offered rates, as of 11:00 a.m., New York City time, of three
leading dealers of commercial paper in New York City selected by the Trustee on such date, for
commercial paper having a maturity of 30 days placed for an industrial issuer whose bond rating is
“AA” or the equivalent, from either Rating Agency. In the event that such rates are not available
on such date, then the Commercial Paper Rate shall be the Money Market Yield of the rate for
commercial paper so provided in a comparable source. The Commercial Paper Rate shall be determined
by the Trustee.



     “Controlled Accumulation Amount,” if applicable, with respect to any Distribution Date related
to the Accumulation Period shall mean an amount equal to the sum of the Accumulation Amount and any
existing Deficit Accumulation Amount; provided, however, that the Controlled Accumulation Amount
shall not be less than zero and through the Class Expected Final Payment Date or Class Final
Maturity Date, as applicable, with respect to each Class in turn, beginning with Class A, shall not
exceed an amount equal to the Class Investor Interest for such Class.



     “Controlled Liquidation Amount,” if applicable, with respect to any Distribution Date related
to the Controlled Liquidation Period, the Accumulation Period or the Early Accumulation Period
shall mean, if applicable, an amount equal to the sum of the Liquidation Amount and any existing
Deficit Liquidation Amount; provided, however, that the Controlled Liquidation Amount shall not be
less than zero and shall not exceed an amount equal to the Series Invested Amount.



     “Controlled Liquidation Period,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Credit Enhancement” shall mean any credit enhancement obtained by the Master Servicer in
accordance with Section 11.



     “Credit Enhancement Account,” if applicable, shall have the meaning set forth in Section 8.



     “Credit Enhancement Agreement” shall mean the Agreement among the Sellers, the Master
Servicer, the Trustee and the Credit Enhancement Provider with respect to the Credit Enhancement.



     “Credit Enhancement Drawing” shall mean any drawing made under the Credit Enhancement.



     “Credit Enhancement Fee” shall mean, on any Distribution Date, the sum of all fees and
interest payable to the Credit Enhancement Provider or the Trustee as administrator of the Credit
Enhancement for the related Due Period pursuant to the Credit Enhancement Agreement.



     “Credit Enhancement Provider” shall have the meaning set forth in the Series Term Sheet.



     “Deficit Accumulation Amount” shall mean, with respect to the first Distribution Date of the
Accumulation Period, zero, and with respect to any other Distribution Date of the



12









 







Accumulation Period, the amount, if any, by which the amount deposited into the Series
Principal Funding Account on the preceding Distribution Date is less than the Controlled
Accumulation Amount for such preceding Distribution Date.



     “Deficit Liquidation Amount” shall mean, with respect to the first Distribution Date relating
to the Due Period commencing on the Principal Commencement Date, zero, and with respect to any
subsequent Distribution Date, the amount, if any, by which the amount of Certificate Principal paid
to the Investor Certificateholders on the preceding Distribution Date is less than the Controlled
Liquidation Amount for such preceding Distribution Date.



     “Distribution Date” shall have the meaning set forth in the Series Term Sheet.



     “Dollars” or “U.S. $” or “$” shall mean the lawful currency of the United States of America.



     “Drawing Date” shall mean the first Business Day preceding each Distribution Date.



     “Early Accumulation Commencement Date,” if applicable, shall mean the date on which an Early
Accumulation Event is deemed to occur.



     “Early Accumulation Event,” if applicable, shall mean any event specified in Section 21
hereof.



     “Early Accumulation Period,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Effective Alternative Credit Support Election” shall have the meaning specified in Section
12.



     “Estimated Investment Shortfall,” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Estimated Principal Distribution Amount,” if applicable, shall mean, with respect to any date
of determination during the Early Accumulation Period, an amount equal to the Series Principal
Collections for the prior Distribution Date; provided, however, that such amount shall not exceed
the Series Investor Interest as of such prior Distribution Date.



     “Estimated Yield,” if applicable, shall have the meaning specified in the Series Term Sheet.



     “Excess Income” on any Distribution Date shall mean an amount equal to the excess, if any, of
(a) interest and other income (net of investment expenses) on such Distribution Date with respect
to the funds on deposit in the Series Principal Funding Account during the related Interest Period
over (b) the amount on deposit in the Series Principal Funding Account in respect of Certificate
Principal during such Interest Period multiplied by a fraction, the numerator of which is the
Certificate Rate or the Class Weighted Average Certificate Rate, as applicable, for the Class for
whose benefit the amounts on deposit in the Series Principal Funding Account are



13









 







held during such Interest Period and the denominator of which is (x) if the relevant
Certificate Rate is to be calculated on the basis of the actual number of days elapsed and a
360-day year, 360 divided by the actual number of days from and including the immediately preceding
Distribution Date to but excluding the current Distribution Date or (y) if the relevant Certificate
Rate is to be calculated on the basis of a 360-day year of twelve 30-day months, twelve.



     “Fixed Principal Allocation Event” shall mean the earliest of (a) the beginning of the Due
Period immediately following the Due Period related to the first Distribution Date during the
Controlled Liquidation Period or the Accumulation Period, as applicable, with respect to the Series
established hereby on which the Series Available Principal Amount is less than zero; (b) the date
on which an Early Accumulation Event or an Amortization Event with respect to the Series
established hereby occurs; and (c) a date selected by the Master Servicer, if any. If the Master
Servicer establishes a date for a Fixed Principal Allocation Event pursuant to clause (c) of the
preceding sentence, the Master Servicer shall provide notification of such date to Discover Bank on
behalf of the Holder of the Seller Certificate, the Trustee, the Credit Enhancement Provider and
the Rating Agencies no later than two Business Days prior to such date.



     “Fully Funded Date,” if applicable, shall mean the first Distribution Date on which the amount
of funds on deposit in the Series Principal Funding Account (after giving effect to all deposits
made on such date pursuant to Section 9) equals the Series Invested Amount for such Distribution
Date (prior to any payments of principal on such date pursuant to Section 10); provided, however,
that the Fully Funded Date shall only occur during the Early Accumulation Period.



     “Funded Credit Enhancement” shall mean any Credit Enhancement that consists of funds on
deposit in one or more segregated trust accounts in the corporate trust department of an office or
branch of the Trustee or a Qualified Institution for the benefit of the Investor Certificateholders
of the Series established hereby, including, without limitation, a reserve account or a cash
collateral account.



     “Group Available Principal Amount” shall mean, with respect to each Distribution Date, the
amount remaining on deposit in the Group Principal Collections Reallocation Account on such
Distribution Date after all withdrawals have been made from such account for the benefit of any
Series in the same Group as the Series established hereby (including the Series established
hereby), but before such amount is withdrawn from the Group Principal Collections Reallocation
Account and deposited into the Collections Account pursuant to Section 9(b)(39)).



     “Group Buffer Amount,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Group Excess Spread” shall mean, for any Distribution Date, the sum of the Series Excess
Spreads for each Series (including the Series established hereby) that is a member of the same
Group as the Series established hereby, in each case for such Distribution Date.



     “Group Interchange Reallocation Account” shall have the meaning specified in Section 8.



14









 





     “Group Finance Charge Collections Reallocation Account” shall have the meaning specified in
Section 8.



     “Group Principal Allocation Event” shall mean the first Distribution Date, if any, on which
(i) the sum of the amount of Series Principal Collections less the amount of Series Yield
Collections for each Series that is a member of the same Group as the Series established hereby
(including the Series established hereby) that is not in its Early Accumulation Period or its
Amortization Period is less than (ii) the Group Required Principal Amount for such Distribution
Date.



     “Group Principal Collections Reallocation Account” shall have the meaning specified in Section
8.



     “Group Required Principal Amount” shall mean, with respect to the Group of which the Series
established hereby is a member, for any Distribution Date, the Series Required Principal Amount for
such Distribution Date plus, for each Series that is a member of such Group, the Series
Required Principal Amount for such Series for such Distribution Date.



     “Increased Credit Enhancement Amount” shall have the meaning specified in Section 32.



     “Increased Issuance Subordinated Amount” shall mean an amount equal to the product of (x) the
face amount of Investor Certificates being issued in an increase in the Series Investor Interest
pursuant to Section 32 and (y) the Initial Subordinated Amount (plus, following a Supplemental
Credit Enhancement Event, the Supplemental Subordinated Amount, plus, following an Effective
Alternative Credit Support Election, the Additional Subordinated Amount, as applicable) divided by
the Series Initial Investor Interest (without giving effect to such increase).



     “Initial Credit Enhancement” shall mean the Credit Enhancement first obtained by the Master
Servicer pursuant to Section 11.



     “Initial Subordinated Amount,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Interchange Series” shall mean each Series that indicates in its applicable Series Term Sheet
that it is an Interchange Series.



     “Interchange Series Shortfall” shall mean, for any Interchange Series, the sum of (i) the
Class Required Amount Shortfall for each Class, (ii) the Class Cumulative Investor Charged-Off
Amount for each Class and (iii) the amount by which the Total Available Credit Enhancement Amount
is less than the Total Maximum Credit Enhancement Amount, in each case after giving effect to all
withdrawals from the Group Finance Charge Collections Reallocation Account pursuant to Section 9
hereof.



     “Interchange Subgroup Allocable Group Excess Spread” shall mean, if the Group Excess Spread is
greater than or equal to zero, the product of the Group Excess Spread and the Interchange Subgroup
Excess Allocation Percentage; and if the Group Excess Spread is less than



15









 







zero, the product of the Group Excess Spread and the Interchange Subgroup Shortfall Allocation
Percentage.



     “Interchange Subgroup Buffer Amount” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Interchange Subgroup Excess Allocation Percentage” shall mean a ratio, the numerator of which
is the sum of the Series Investor Interest for each Interchange Series that is a member of the same
Group as the Series established hereby (including the Series established hereby); and the
denominator of which is the sum of the Series Investor Interests for each Series that is a member
of the same Group as the Series established hereby (including each Interchange Series and the
Series established hereby).



     “Interchange Subgroup Excess Spread” shall mean, for any Distribution Date, the sum of (x) all
amounts deposited into the Group Interchange Reallocation Account for all Interchange Series and
(y) the Interchange Subgroup Allocable Group Excess Spread.



     “Interchange Subgroup Shortfall Allocation Percentage” shall mean a ratio, the numerator of
which is the sum of the Series Excess Spread for each Interchange Series that is a member of the
same Group as the Series established hereby (including, if applicable, the Series established
hereby) for which the Series Excess Spread is less than zero; and the denominator of which is the
sum of the Series Excess Spread for each Series that is a member of the same Group as the Series
established hereby (including, if applicable, each Interchange Series and the Series established
hereby) for which the Series Excess Spread is less than zero.



     “Interest Accrual Period” shall mean, with respect to any Interest Payment Date, the period
from and including the Interest Payment Date immediately preceding such Interest Payment Date (or,
in the case of the first Interest Payment Date, from and including the Series Closing Date) to but
excluding such Interest Payment Date.



     “Interest Calculation Date,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Interest Payment Date” shall mean each date designated as such in the Series Term Sheet.



     “Interest Period” shall mean each period from and including a given Distribution Date to but
excluding the next following Distribution Date commencing with the earlier to occur of (i) the
first Distribution Date of the Early Accumulation Period or (ii) the first Distribution Date of the
Accumulation Period.



     “Interest Rate Cap Provider,” if any, shall mean the entity listed as the Interest Rate Cap
Provider in the Series Term Sheet, in its capacity as obligor under the Class Interest Rate Caps,
or if any Replacement Class Interest Rate Caps or Qualified Substitute Cap Arrangements are
obtained pursuant to Section 15, the obligor with respect to such Replacement Class Interest Rate
Caps or Qualified Substitute Cap Arrangements.



16









 





     “Interest Rate Swap Account” shall have the meaning specified in Section 8.



     “Interest Rate Swap Counterparty,” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Investor Accounts” shall mean, in addition to Investor Accounts established pursuant to the
Pooling and Servicing Agreement, the Series Collections Account, the Series Principal Collections
Account, the Series Principal Funding Account, the Series Interest Funding Account, the Series
Distribution Account, the Group Finance Charge Collections Reallocation Account, the Group
Principal Collections Reallocation Account and the Group Interchange Reallocation Account.



     “Investor Charge-Off Loss” shall have the meaning set forth in Section 13(b).



     “Investor Loss” with respect to each Class, shall mean (i) the amount of any reduction in the
Class Invested Amount with respect to such Class pursuant to Section 13(b), (ii) in the event the
Receivables are sold pursuant to Section 12.01(b) of the Pooling and Servicing Agreement, the
amount, if any, by which the Class Investor Interest (determined immediately prior to such sale)
exceeds the product of (x) a fraction, the numerator of which is the Class Investor Interest and
the denominator of which is the Aggregate Investor Interest and (y) the net proceeds of such sale
and (iii) in the event Receivables are sold pursuant to Section 12.02(c) of the Pooling and
Servicing Agreement, the amount, if any, by which the Class Investor Interest (determined
immediately prior to such sale) exceeds the product of (x) a fraction, the numerator of which is
the Class Investor Interest and the denominator of which is the Series Investor Interest and (y)
the net proceeds of such sale.



     “Investor Servicing Fee” shall mean, with respect to any Distribution Date, an amount equal to
the product of the Investor Servicing Fee Percentage and the Series Investor Interest on the first
day of the Due Period related to such Distribution Date (or in the case of the first Distribution
Date for the Series established hereby, the Series Initial Investor Interest). For purposes of
this definition, the Series Investor Interest on the first day of any Due Period in which an
increase in the Series Investor Interest pursuant to Section 32 has occurred shall include the
Series Investor Interest of all Investor Certificates issued during such Due Period.



     “Investor Servicing Fee Percentage” shall mean the percentage identified as such in the Series
Term Sheet.



     “LIBOR,” if applicable, shall mean, with respect to any LIBOR Determination Date, the rate for
deposits in United States dollars with a duration comparable to the relevant Interest Accrual
Period which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such day. If such
rate does not appear on Telerate Page 3750, the rate will be determined by the Trustee on the basis
of the rates at which deposits in United States dollars are offered by major banks in the London
interbank market, selected by the Trustee, at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market with a duration comparable to the relevant Interest
Accrual Period commencing on that day. The Trustee will request the principal London office of at
least four banks to provide a quotation of its rate. If at



17









 







least two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for that day will be
the arithmetic mean of the rates quoted by four major banks in New York City, selected by the
Trustee, at approximately 11:00 a.m., New York City time, on that day for loans in United States
dollars to leading European banks with a duration comparable to the relevant Interest Accrual
Period commencing on that day.



     “LIBOR Business Day,” if applicable, shall mean a day other than a Saturday or a Sunday on
which banking institutions in the City of London, England and in New York, New York are not
required or authorized by law to be closed.



     “LIBOR Determination Date,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Liquidation Amount,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Maximum Class A Credit Enhancement Amount,” if applicable, shall have the meaning set forth
in the Series Term Sheet.



     “Maximum Class B Credit Enhancement Amount,” if applicable, shall have the meaning set forth
in the Series Term Sheet.



     “Maximum Shared Credit Enhancement Amount,” if applicable, shall have the meaning set forth in
the Series Term Sheet.



     “Money Market Yield” shall mean a yield (expressed as a percentage rounded to the nearest
one-hundredth of a percent, with five hundred one-thousandths of a percent rounded upwards)
calculated in accordance with the following formula:



	 	 	 	 	 	 	 	 	 	 	 
	Money Market Yield

	 	=
	 	      D x 360      
	 	x
	 	100	 
	

	 	 	 	360 — (D x M)	 	 	 	 	 	 





where “D” refers to the per annum rate for commercial paper quoted on a bank discount basis and
expressed as a decimal, and “M” refers to the actual number of days in the related Interest Accrual
Period.




     “Monthly Amortization Rate,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Monthly Swap Deposit,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Net Swap Payment,” if applicable, shall mean, with respect to any Class that is subject to a
Class Interest Rate Swap, (x) on any Interest Payment Date prior to the early termination of the
Class Interest Rate Swap, the positive difference, if any, between (i) the amount owed by the Trust
to the Interest Rate Swap Counterparty under the Class Interest Rate Swap on such Interest



18









 







Payment Date and (ii) the amount owed by the Interest Rate Swap Counterparty to the Trust
under the Class Interest Rate Swap on such Interest Payment Date, and (y) on any Distribution Date
in any calendar month following the calendar month in which an early termination of the Class
Interest Rate Swap occurred, the unpaid portion of any termination payment owed by the Trust to the
Interest Rate Swap Counterparty in accordance with the terms of the Class Interest Rate Swap.



     “Net Swap Receipt,” if applicable, shall mean, with respect to any Class that is subject to a
Class Interest Rate Swap, (x) on any Interest Payment Date prior to the early termination of the
Class Interest Rate Swap, the positive difference, if any, between (i) the amount owed by the
Interest Rate Swap Counterparty to the Trust under the Class Interest Rate Swap on such Interest
Payment Date and (ii) the amount owed by the Trust to the Interest Rate Swap Counterparty under the
Class Interest Rate Swap on such Interest Payment Date, and (y) on any Distribution Date following
an early termination of the Class Interest Rate Swap, the amount of any termination payment paid by
the Interest Rate Swap Counterparty on or prior to such Distribution Date and after the previous
Distribution Date.



     “Non-U.S. Holder,” shall mean any person who, as to the United States, is a non-resident alien
individual, a foreign corporation, a foreign estate, a foreign trust or a foreign partnership, as
such terms are defined in the Internal Revenue Code of 1986, as amended.



     “Payment Date” shall mean any Interest Payment Date and any Class Expected Final Payment Date.



     “Portfolio Yield” shall mean, with respect to any Due Period, the annualized percentage
equivalent of a fraction, the numerator of which shall be the sum of (i) the amount of Finance
Charge Collections received during such Due Period, (ii) the amount of Series Yield Collections for
each Series then outstanding for such Due Period, (iii) the amount of Series Interchange for each
Series then outstanding for such Due Period and (iv) the amount of Series Additional Funds for each
Series then outstanding for such Due Period, and the denominator of which shall be the total amount
of Principal Receivables in the Trust as of the first day of such Due Period.



     “Prepayment Calculation Table,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Prepayment Determination Date,” if applicable, shall have the meaning set forth in the Series
Term Sheet.



     “Principal Commencement Date” shall mean the date designated as such in the Series Term Sheet.



     “Principal Distribution Amount” shall mean, with respect to any Distribution Date occurring in
(i) the Accumulation Period, the Controlled Accumulation Amount, (ii) the Controlled Liquidation
Period, the Controlled Liquidation Amount, (iii) the Early Accumulation Period, the Series Investor
Interest, or (iv) in the Amortization Period, the Series Investor Interest.



19









 





     “Principal Distribution Amount Shortfall” with respect to any Distribution Date in the
Accumulation Period, the Controlled Liquidation Period, the Early Accumulation Period or the
Amortization Period, as applicable, shall have the meaning set forth in Section 9.



     “Principal Payment Date” shall mean, if applicable, each date designated as such in the Series
Term Sheet.



     “Qualified Credit Enhancement Provider” shall mean, (i) if the Credit Enhancement is not
Funded Credit Enhancement, an institution that meets the Qualified Credit Enhancement Provider
Rating Requirements established by each Rating Agency, which requirements are set forth in the
Series Term Sheet if the Initial Credit Enhancement is not Funded Credit Enhancement, or (ii) if
the Initial Credit Enhancement is Funded Credit Enhancement, an institution that meets the
Qualified Credit Enhancement Provider Rating Requirements established by each Rating Agency, which
requirements will be established by the Rating Agencies at the time, if any, that the Master
Servicer elects to replace the Initial Credit Enhancement with Credit Enhancement that is not
Funded Credit Enhancement (or, in either case, such lesser requirements as the applicable Rating
Agency shall allow); provided, however, that in the event the Master Servicer elects to obtain
Credit Enhancement that is not Funded Credit Enhancement and is unable after the exercise of its
best efforts to obtain from a Qualified Credit Enhancement Provider as so defined such Credit
Enhancement with respect to which the representations set forth in Section 11(a) shall be true, the
term “Qualified Credit Enhancement Provider” shall mean a Person who satisfies such requirements
except that its long-term unsecured debt rating by any nationally recognized rating agency may be
lower than that set forth in such requirements, but shall not be lower than the highest credit
rating of any Person who otherwise satisfies said requirements and from whom the Master Servicer is
able to obtain such a Credit Enhancement.



     “Qualified Substitute Cap Arrangement,” if any, shall have the meaning specified in Section
15.



     “Reimbursed Loss Event” shall mean, with respect to each Class for any Distribution Date, the
occurrence of the reimbursement of Investor Losses pursuant to Section 13(c) with respect to such
Class on such Distribution Date such that the aggregate amount of unreimbursed Investor Losses for
such Class is reduced to zero.



     “Reimbursed Loss Interest” shall mean, for any Class for any Distribution Date, an amount
equal to the product of (i) the aggregate amount of Investor Losses that have not been reimbursed
pursuant to Section 13(c) prior to the commencement of the related Due Period and (ii) a fraction
the numerator of which is the Certificate Rate or the Class Weighted Average Certificate Rate, as
applicable, for such Class for the related Due Period and the denominator of which is (x) if the
relevant Certificate Rate is to be calculated on the basis of the actual number of days elapsed and
a 360-day year, (A) if each Interest Payment Date is also a Distribution Date, 360 divided by the
actual number of days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (B) if each Interest Payment Date is not also a
Distribution Date, 360 divided by the actual number of days from and including the Interest
Calculation Date in the preceding calendar month to but excluding the



20









 







Interest Calculation Date following the current Distribution Date or (y) if the relevant
Certificate Rate is to be calculated on the basis of a 360-day year of twelve 30-day months,
twelve.



     “Reimbursed Loss Interest Gross-up Amount” shall mean, for any Class for any Distribution
Date, an amount equal to the product of (i) the positive difference, if any, between the Class
Alternative Deficiency Amount for the immediately preceding Payment Date and the actual Class
Deficiency Amount for the immediately preceding Payment Date and (ii) a fraction the numerator of
which is the Certificate Rate or the Class Weighted Average Certificate Rate, as applicable, for
such Class for the related Due Period and the denominator of which is (x) if the relevant
Certificate Rate is to be calculated on the basis of the actual number of days elapsed and a
360-day year, (A) if each Interest Payment Date is also a Distribution Date, 360 divided by the
actual number of days from and including the immediately preceding Distribution Date to but
excluding the current Distribution Date or (B) if each Interest Payment Date is not also a
Distribution Date, 360 divided by the actual number of days from and including the Interest
Calculation Date in the preceding calendar month to but excluding the Interest Calculation Date
following the current Distribution Date or (y) if the relevant Certificate Rate is to be calculated
on the basis of a 360-day year of twelve 30-day months, twelve.



     “Replacement Class Interest Rate Cap,” if any, shall mean an interest rate cap agreement or
other interest rate protection having substantially the same terms and conditions as the Class
Interest Rate Cap that it replaces, and otherwise satisfying the conditions set forth in Section
15.



     “Required Daily Deposit” shall mean, if applicable, with respect to each Servicer, an amount
equal to:




	 	(a)  	during the Revolving Period and the Accumulation Period or the
Controlled Liquidation Period, as applicable, the sum of
	 
	 	   	(x)(1) during the Revolving Period, an amount equal to the sum of (i) the
sum of the Class Finance Charge Collections and the Class Yield Collections
for each Class for such day and (ii) the amount of Class B Principal
Collections for such day; minus the sum of the Class B Yield Collections for
such day and all accrued but unfunded Class A Monthly Servicing Fees; or
	 
	 	(2)  	during the Accumulation Period or the Controlled Liquidation Period, as
applicable, an amount equal to the sum of (i) the amount set forth in clause
(1) above and (ii)(A) until the aggregate amount deposited during such Due
Period pursuant to this clause (ii) equals the Controlled Accumulation
Amount or the Controlled Liquidation Amount, as applicable, for the related
Distribution Date, the amount of Class A Principal Collections for such day
less the amount of Class A Yield Collections for such day and (B)
thereafter, zero provided, however, that with respect to any
day on which the Controlled Accumulation Amount or the Controlled
Liquidation Amount, as applicable, for the related Distribution Date can not
be determined, the aggregate amount to be




21









 






	 	   	deposited for such Due Period shall be the Controlled Accumulation Amount or
the Controlled Liquidation Amount, as applicable, for the Distribution Date
preceding the related Distribution Date; plus
	 
	 	(y)  	the positive difference, if any, between





     (1) the product of the Class A Percentage for the related Distribution
Date with respect to Principal Collections and the amount of Principal
Collections received during the Due Period through and including such day,
less the product of the Class A Yield Percentage and the amount of Series
Yield Collections received during the Due Period through and including such
day, and less any amounts deposited into the Collections Account during the
Due Period through and including such day pursuant to clause (x)(2)(ii)(A)
above or previously deposited during such Due Period pursuant to this clause
(y) and




     (2) the positive difference, if any, between (i) an amount equal to (A)
the aggregate amount of Principal Receivables in the Trust as of such day
multiplied by a fraction the numerator of which shall be the Series Initial
Investor Interest and the denominator of which shall be sum of the Series
Initial Investor Interest for each Series then outstanding minus (B) the
Series Investor Interest as of the end of the immediately preceding Due
Period (after giving effect to payments of principal made or to be made on
the related Distribution Date) and (ii) an amount equal to the positive
difference between the Series Minimum Principal Receivables Balance and the
Series Investor Interest; provided, however, that any calculation under this
paragraph (y) that results in a number less than zero shall be treated as
zero; or




	 	(b)  	during the Early Accumulation Period and the Amortization
Period, an amount equal to the sum of the Series Finance Charge Collections and
the Series Principal Collections for the Series established hereby for such day
minus all accrued but unfunded Class A Monthly Servicing Fees; and



multiplied, in each case, by a fraction the numerator of which shall be the aggregate amount of
Principal Receivables in the Trust that are serviced by such Servicer and the denominator of which
shall be the aggregate amount of Principal Receivables in the Trust; provided, however, that if any
Servicer is unable to make the calculations set forth above on any day, the Required Daily Deposit
for such Servicer for such day shall be equal to all the Collections received by such Servicer on
such day.




     Notwithstanding the foregoing, (i) upon the occurrence of any circumstance described in
Section 10.02(d), (e) or (f) of the Pooling and Servicing Agreement with respect to any Servicer,
the Required Daily Deposit for any Series then outstanding shall equal the amount described in
paragraph (b) above for such Servicer and (ii) a Servicer may use Collections received by it for



22









 




its own account prior to the applicable Distribution Date as permitted by Sections 3.03(b) and
4.03(b) of the Pooling and Servicing Agreement.




     “Revolving Period” shall have the meaning set forth in the Series Term Sheet.



     “Series Additional Funds,” if applicable, shall mean, for any Distribution Date, the
Additional Funds deposited into the Series Collections Account for the Series established hereby on
such Distribution Date.



     “Series Additional Investor Funds,” if applicable, shall mean, for any Distribution Date, the
Series Additional Funds, if any, that are not applied to payment of the Supplemental Servicing Fee
pursuant to Section 14.



     “Series Available Principal Amount” shall mean, for any Distribution Date, if a Group
Principal Allocation Event has occurred, an amount calculated as follows: For each Series that is
a member of the same Group as the Series established hereby (including the Series established
hereby), seriatim, beginning with the Series with the largest Series Investor Interest for such
Distribution Date (and if more than one Series has the same Series Investor Interest on such
Distribution Date, beginning with whichever of such Series has the longest time remaining until its
latest Class Expected Final Payment Date or, if none, the last scheduled day of its Accumulation
Period (assuming that no Early Accumulation Event or Amortization Event occurs with respect to such
Series)), an amount equal to (x) the Group Available Principal Amount less (y) the difference
between the Series Required Principal Amount, if any, and the Principal Distribution Amount for
such Series for such Distribution Date, if any, that was funded on such Distribution Date
(including any portion of such amount that was funded by amounts withdrawn from the Group Principal
Collections Reallocation Account pursuant to Section 9(b)(21), Section 9(b)(38), 9(b)(39) or a
substantially similar provision). For purposes of calculating the Series Available Principal
Amount for each other such Series, the Group Available Principal Amount shall be reduced by the
amount calculated in clause (y) for the prior Series for which the Series Available Principal
Amount was calculated.



     “Series Buffer Amount,” if applicable, shall have the meaning set forth in the Series Term
Sheet.



     “Series Closing Date” shall mean the date designated as such in the Series Term Sheet.



     “Series Collections Account” shall have the meaning specified in Section 8.



     “Series Cut-Off Date” shall mean the date designated as such in the Series Term Sheet.



     “Series Distribution Account” shall have the meaning specified in Section 8.



     “Series Excess Servicing” shall mean, as of any Distribution Date, the sum of the amounts of
Class Excess Servicing for each Class of the Series established hereby, as such amount is modified
pursuant to Section 9.



23









 





     “Series Excess Spread” shall mean, for any Distribution Date, an amount equal to (a) the sum
of Series Finance Charge Collections, Series Yield Collections, Series Additional Investor Funds,
Series Interchange and any Class Investment Income for any Class of the Series established hereby
minus (b) the sum of (i) with respect to each Class, the product of (A) the Class Invested Amount
for such Class for such Distribution Date and (B) a fraction, the numerator of which is the
Certificate Rate for that Class, and the denominator of which is (x) if the relevant Certificate
Rate is to be calculated on the basis of the actual number of days elapsed and a 360-day year, 360
divided by the actual number of days from and including the immediately preceding Distribution Date
(or in the case of the first Distribution Date, from and including the Series Closing Date) to but
excluding the current Distribution Date or (y) if the relevant Certificate Rate is to be calculated
on the basis of a 360-day year of twelve 30-day months, twelve (or in the case of the first
Distribution Date, 360 divided by the number of days from and including the Series Closing Date to
but excluding the current Distribution Date, assuming 30-day months), (ii) the Investor Servicing
Fee, (iii) the product of the Series Percentage with respect to the Charged-Off Amount and the
Charged-Off Amount, and (iv) the Credit Enhancement Fee, in each case for such Distribution Date;
provided, however, that solely for purposes of determining the Group Excess Spread and the
Interchange Subgroup Shortfall Allocation Percentage for this Series or any other Series, Series
Excess Spread shall be the amount determined as set forth above minus (i) any amount paid or
deposited on such date by the Trust under the Class Interest Rate Swap and (ii) for so long as any
Series that is not an Interchange Series is outstanding and the Series Excess Spread for such
series is positive without giving effect to clause (ii) of this proviso, the lesser of Series
Interchange or the amount determined as the Series Excess Spread without giving effect to this
proviso; provided, that Series Excess Spread, for purposes of determining the Group Excess Spread
and the Interchange Subgroup Shortfall Allocation Percentage, shall not be reduced below zero as a
result of this proviso, if any, for such Distribution Date; and provided, that if an increase in
the Series Investor Interest has been made pursuant to Section 32 on or prior to such Distribution
Date but during the calendar month in which such Distribution Date occurred, the Class Invested
Amount for each Class for such Distribution Date shall be deemed to exclude the portion of the
Class Invested Amount represented by Investor Certificates issued in connection with such increase;
and provided, further, that if an increase in the Series Investor Interest has been made pursuant
to Section 32 during the prior calendar month on a day other than the Distribution Date in such
prior calendar month, the amount in clause (i) above shall be deemed to include the portion of the
Class Invested Amount represented by Investor Certificates issued as part of such increase as if
such increase had taken effect on such prior Distribution Date.



     “Series Finance Charge Collections” shall mean, with respect to any day or any Distribution
Date or Trust Distribution Date, as applicable, the sum of the amount of Class Finance Charge
Collections for each Class for such day or for the related Due Period, as applicable.



     “Series Initial Investor Interest” shall mean the aggregate face amount of Investor
Certificates authenticated and delivered pursuant to Section 7 and, if applicable, pursuant to
Section 32, as specified in the Series Term Sheet.



24









 





     “Series Interchange” shall mean, with respect to any Distribution Date or Trust Distribution
Date, as applicable, the sum of the amount of Class Interchange for each Class of this Series for
the related Due Period.



     “Series Interest Funding Account” shall have the meaning specified in Section 8.



     “Series Invested Amount” with respect to any Distribution Date, shall mean the sum of the
Class Invested Amounts for each Class of the Series established hereby on such Distribution Date.



     “Series Investor Interest” with respect to any Distribution Date, shall mean the sum of the
Class Investor Interests for each Class of the Series established hereby on such Distribution Date.



     “Series Minimum Principal Receivables Balance” shall mean, with respect to the Series
established hereby, on any date of determination the sum of (A) (i) if a Fixed Principal Allocation
Event has not occurred, the Series Investor Interest on such date of determination, divided by
0.93, (ii) if a Fixed Principal Allocation Event has occurred but the Fully Funded Date has not
occurred, the Series Investor Interest as of the date of the occurrence of the Fixed Principal
Allocation Event, divided by 0.93 or (iii) on and after the Fully Funded Date, if any, zero, and
(B) (x) the product of (i) the sum of (1) the amount on deposit in the Series Principal Funding
Account on such date of determination and (2) for any date of determination during (x) the Early
Accumulation Period, if any, the Estimated Principal Distribution Amount for the next Distribution
Date and (y) for any date of determination during the Accumulation Period, the amount specified in
the Master Servicer’s notice of its election to commence the Accumulation Period as the Controlled
Accumulation Amount for such Distribution Date, and (ii) a fraction the numerator of which is the
Estimated Investment Shortfall and the denominator of which is the Estimated Yield, in each case on
such date of determination, divided by (y) 0.93; provided, however, that Discover Bank on behalf of
the Holder of the Seller Certificate may, upon 30 days’ prior notice to the Trustee, the Rating
Agencies and the Credit Enhancement Provider, reduce the Series Minimum Principal Receivables
Balance by increasing the divisors set forth above, subject to the condition that Discover Bank on
behalf of the Holder of the Seller Certificate shall have been notified by the Rating Agencies that
such reduction would not result in the lowering or withdrawal of the rating of any Class of any
Series then outstanding, and provided, further, that the divisors set forth above may not be
increased to more than 0.98.



     “Series Percentage” shall mean, with respect to any specified category, with respect to any
Distribution Date or Trust Distribution Date, as applicable, the sum of the Class Percentages with
respect to such category for each Class of the Series established hereby on such Distribution Date
or Trust Distribution Date, as applicable.



     “Series Principal Collections” shall mean, with respect to any day or any Distribution Date or
Trust Distribution Date, as applicable, the sum of the amount of Class Principal Collections for
each Class for such day or for the related Due Period, as applicable.



     “Series Principal Collections Account” shall have the meaning specified in Section 8.



25









 





     “Series Principal Funding Account” shall mean the Series Principal Funding Account established
pursuant to Section 8. Amounts “on deposit in” the Series Principal Funding Account shall be
deemed to be on deposit for the benefit of (i) the Class A Certificateholders for the period up to
and including the Class A Expected Final Payment Date or Class A Final Maturity Date, as
applicable, and (ii) if there is a Subordinate Class with respect to Class A, the Class B
Certificateholders for the period beginning immediately after the Class A Expected Final Payment
Date or Class A Final Maturity Date, as applicable, and ending on the Class B Expected Final
Payment Date or Class B Final Maturity Date, as applicable. Amounts “on deposit in” the Series
Principal Funding Account shall be deemed to include amounts invested in Permitted Investments
pursuant to Section 8 unless the context clearly requires otherwise.



     “Series Required Principal Amount” shall mean, for this Series, with respect to each
Distribution Date of the Controlled Liquidation Period or the Accumulation Period, as applicable,
the product of (x) (i) if the related Due Period does not occur in February, 1.25 or (ii) if the
related Due Period occurs in February, 1.05, and (y) the Controlled Liquidation Amount or the
Controlled Accumulation Amount, as applicable, for such Distribution Date, and with respect to each
other Series that is a member of the same Group as the Series established hereby, the amount
specified in the Series Supplement for such Series for such Distribution Date.



     “Series Term Sheet” shall mean the Series Term Sheet setting forth the terms of the Series of
Investor Certificates issued hereby, to which this Annex is attached.



     “Series Termination Date” shall mean the date designated as such in the Series Term Sheet.



     “Series Yield Collections” shall mean, with respect to any day or any Distribution Date, as
applicable, an amount equal to the product of the Series Yield Factor and the amount of Series
Principal Collections for such day or the related Due Period, as applicable.



     “Series Yield Factor” shall mean the number identified as such in the Series Term Sheet, as
such number may be changed from time to time pursuant to Section 25.



     “Shared Credit Enhancement” shall mean Credit Enhancement available for the benefit of both
the Class A Investor Certificates and the Class B Investor Certificates.



     “Special Payment Date” shall mean each Distribution Date with respect to the Amortization
Period and the Distribution Date related to each Class Expected Final Payment Date or Class Final
Maturity Date, as applicable.



     “Stated Class A Credit Enhancement Amount” shall mean the “stated amount” with respect to the
Class A Cash Collateral Credit Enhancement, as set forth in the Series Term Sheet.



     “Stated Class B Credit Enhancement Amount” shall mean the “stated amount” with respect to the
Credit Enhancement that is available solely for the benefit of the Class B Investor Certificates,
as set forth in the Series Term Sheet.



26









 





     “Stated Shared Credit Enhancement Amount,” if applicable, shall mean the “stated amount” with
respect to the shared portion of the Credit Enhancement, as set forth in the Series Term Sheet.



     “Statement Date” shall mean each date designated as such in the Series Term Sheet.



     “Subclass” with respect to any Class shall mean, if applicable, each portion of such Class
that has a different Certificate Rate or method of calculating its Certificate Rate.



     “Subordinate Class” shall mean, with respect to any Class, the Class, if any, identified by
the letter of the alphabet next succeeding the letter designating such Class (e.g., the Subordinate
Class with respect to Class A is Class B).



     “Subordinate Series” shall mean any Series which is subordinated in right of payment, in whole
or in part, pursuant to the Series Supplement with respect to such Series, to the Series
established hereby.



     “Subseries” shall mean Investor Certificates of a Series that are identified in the Series
Term Sheet as constituting a “Subseries.” If a Series consists of two or more Subseries, then
each provision of the Annex to this Series Supplement shall be interpreted and applied separately
for each Subseries as if such Subseries were an independent Series, and each reference to a
“Series” and each term beginning with “Series” (except as used in this definition of Subseries)
shall be deemed to be a reference to the applicable Subseries or the provisions of the applicable
Subseries (e.g., as applied in relation to a specific Subseries, the term “Series Termination Date”
shall refer solely to the Series Termination Date identified in the Series Term Sheet with respect
to that Subseries and the term “Series Principal Funding Account” shall refer solely to the Series
Principal Funding Account established with respect to that Subseries ), except where the context
clearly requires that such term refers to multiple or other Series of the Trust, in which case such
term shall be interpreted to treat each Subseries as a separate Series of the Trust. Each
Subseries shall be treated as a separate Series for all purposes of the Pooling and Servicing
Agreement and each other Series Supplement issued with respect to the Discover Card Master Trust I.



     “Supplemental Credit Enhancement Amount,” if applicable, shall have the meaning set forth in
the Series Term Sheet.



     “Supplemental Credit Enhancement Event” shall occur the first time the long-term debt or
deposit rating of Discover Bank or any Additional Seller is withdrawn or reduced below BBB- by
Standard & Poor’s.



     “Supplemental Servicing Fee” shall mean, if applicable, with respect to any Distribution Date,
an amount equal to the product of the Supplemental Servicing Fee Percentage and the Series Investor
Interest on the first day of the Due Period related to such Distribution Date (or in the case of
the first Distribution Date for the Series established hereby, the Series Investor Interest on the
Series Cut-Off Date).



27









 





     “Supplemental Servicing Fee Percentage,” if applicable, shall mean the percentage identified
as such in the Series Term Sheet.



     “Supplemental Subordinated Amount,” if applicable, shall have the meaning set forth in the
Series Term Sheet.



     “Swap Counterparty Rate,” if applicable, with respect to any Class Interest Rate Swap, shall
have the meaning specified in the Series Term Sheet.



     “Swap Trust Rate,” if applicable, with respect to any Class Interest Rate Swap, shall have the
meaning specified in the Series Term Sheet.



     “Telerate Page 3750,” if applicable, shall mean the display page so designated on the Bridge
Telerate, Inc. (or such other rate as may replace that page on that service for the purpose of
displaying comparable rates or prices).



     “Total Available Credit Enhancement Amount” shall mean, with respect to the first Distribution
Date, the Stated Class B Credit Enhancement Amount plus, if applicable, the Stated Shared Credit
Enhancement Amount, and, on each Distribution Date thereafter, shall mean the Available Class B
Credit Enhancement Amount plus, if applicable, the Available Shared Credit Enhancement Amount, in
each case after all adjustments thereto on the immediately preceding Distribution Date, and, in
each case, as adjusted pursuant to Section 9 on such Distribution Date.



     “Total Maximum Credit Enhancement Amount” shall have the meaning set forth in the Series Term
Sheet.



     “United States” or “U.S.” shall mean the United States of America, its territories and
possessions, any State of the United States and the District of Columbia.



     SECTION 2. Subordination.



     (a) Subordination of Certain Classes. If there is a Subordinate Class with respect to Class
A, the Holders of each Class B Investor Certificate, by their acceptance of such Investor
Certificate, hereby subordinate, for the benefit of the Holders of Class A Investor Certificates,
to the extent and in the manner set forth in Section 9, all of such Investor Certificateholders’
right, title and interest in and to future distributions due on such Holders’ Investor
Certificates, but only to the extent of the Available Subordinated Amount.



     (b) No Subordination of Series. The Investor Certificates of the Series established hereby
shall not be subordinated in right of payment to any other Series, whether currently outstanding or
to be issued in the future. One or more other Series, however, may be subordinated in right of
payment to the Series established hereby, although the Sellers shall have no obligation to issue
such a Subordinate Series. If any Subordinate Series is issued, such Subordinate Series shall be
subordinate in right of payment to the Series established hereby only to the extent set forth in
the Series Supplement with respect to such Subordinate Series.



28









 





     SECTION 3. Representations and Warranties of the Sellers. The representations and warranties
of the Sellers contained in Section 2.04 of the Pooling and Servicing Agreement and the
corresponding sections of any Assignment are true on and as of the date hereof and/or the date set
forth in the Pooling and Servicing Agreement, as applicable. Each Seller also represents and
warrants to the Trust as of the date hereof that:



     (a) The execution, delivery and performance of this Series Supplement by such Seller have been
duly authorized by all necessary corporate action, do not require any approval or consent of any
governmental agency or authority, do not and will not conflict with any material provision of the
Certificate of Incorporation or By-Laws of such Seller, do not and will not conflict with, or
result in a breach which would constitute a material default under, any agreement for borrowed
money binding upon or applicable to it or such of its property which is material to it, or, to the
best of such Seller’s knowledge, any law or governmental regulation or court decree applicable to
it or such material property, and this Series Supplement is the valid, binding and enforceable
obligation of such Seller, except as the same may be limited by receivership, insolvency,
reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally
or by general equity principles.



     (b) The Pooling and Servicing Agreement creates a valid and enforceable security interest (as
defined in the applicable UCC) which security interest is prior to all other Liens and is
enforceable as such against creditors of and purchasers from Seller, except as the same may be
limited by receivership, insolvency, reorganization, moratorium or other laws relating to the
enforcement of creditors’ rights generally or by general equity principles.



     (c) The Receivables constitute “accounts” within the meaning of Article 9 of the applicable
UCC.



     (d) Each Seller has caused or will have caused, within ten days of the date of this Series
Supplement, the filing of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security interest (as
defined in the applicable UCC) in the Receivables conveyed to the Trustee under the Pooling and
Servicing Agreement.



     (e) Other than the sale, transfer, assignment and conveyance of the Receivables to the Trust
and the grant of a security interest therein pursuant to the Pooling and Servicing Agreement, the
Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of
the Receivables.



     (f) The Seller has not authorized the filing of and is not aware of any financing statements
against the Seller that include a description of collateral covering the Receivables, other than
any financing statement (i) relating to the interest of the Trust in the Receivables under the
Pooling and Servicing Agreement or (ii) that has been terminated.



     (g) The Seller is not aware of any judgment or tax lien filings against it.



29









 





     The representations and warranties set forth in this Section 3 shall survive the transfer and
assignment to the Trust of the Receivables transferred to the Trust by the Sellers. None of (i)
compliance with the representations and warranties set forth in this Section 3, (ii) compliance
with the representations and warranties set forth in Sections 2.04(d) and (e) of the Pooling and
Servicing Agreement or (iii) compliance with the provisions of Section 13.02 of the Pooling and
Servicing Agreement can be waived by the Trustee without the prior written consent of Standard &
Poor’s.



     SECTION 4. Representations and Warranties of Discover Bank as Master Servicer and Servicer.
The representations and warranties of Discover Bank as the Master Servicer and as a Servicer
contained in Section 3.04 of the Pooling and Servicing Agreement are true on and as of the date
hereof. Discover Bank as Master Servicer and Servicer also represents and warrants to the Trust as
of the date hereof that the execution, delivery and performance of this Series Supplement by
Discover Bank have been duly authorized by all necessary corporate action, do not require any
approval or consent of any governmental agency or authority, do not and will not conflict with any
material provision of the Certificate of Incorporation or By-Laws of Discover Bank, do not and will
not conflict with, or result in a breach which would constitute a material default under, any
agreement for borrowed money binding upon or applicable to it or such of its property which is
material to it, or, to the best of Discover Bank’s knowledge, any law or governmental regulation or
court decree applicable to it or such material property, and this Series Supplement is the valid,
binding and enforceable obligation of Discover Bank, except as the same may be limited by
receivership, insolvency, reorganization, moratorium or other laws relating to the enforcement of
creditors’ rights generally or by general equity principles.



     SECTION 5. Representations and Warranties of Other Servicers. The representations and
warranties of each Servicer (other than Discover Bank), if any, contained in Section 3.05 of the
Pooling and Servicing Agreement are true and correct on and as of the date hereof. Each such
Servicer also represents and warrants to the Trust as of the date hereof that the execution,
delivery and performance of this Series Supplement by such Servicer have been duly authorized by
all necessary corporate action, do not require any approval or consent of any governmental agency
or authority, do not and will not conflict with any material provision of the Certificate of
Incorporation or By-Laws of such Servicer, do not and will not conflict with, or result in a breach
which would constitute a material default under, any agreement for borrowed money binding upon or
applicable to it or such of its property which is material to it, or, to the best of such
Servicer’s knowledge, any law or governmental regulation or court decree applicable to it or such
material property, and this Series Supplement is the valid, binding and enforceable obligation of
such Servicer, except as the same may be limited by receivership, insolvency, reorganization,
moratorium or other laws relating to the enforcement of creditors’ rights generally or by general
equity principles.



     SECTION 6. Representations and Warranties of the Trustee. The representations and warranties
of the Trustee contained in Section 11.16 of the Pooling and Servicing Agreement are true on and as
of the date hereof. The Trustee also represents and warrants as of the date hereof that the
Trustee has full power, authority and right to execute, deliver and perform this Series Supplement,
and has taken all necessary action to authorize the execution, delivery and



30









 




performance by it of this Series Supplement, and this Series Supplement has been duly executed
and delivered by the Trustee.




     SECTION 7. Authentication of Certificates. Pursuant to the request of the Sellers, the
Trustee shall cause Investor Certificates in authorized denominations evidencing the Series
established hereby to be duly authenticated and delivered as of the Series Closing Date to or upon
the order of the Sellers pursuant to Section 6.06 of the Pooling and Servicing Agreement.



     SECTION 8. Establishment and Administration of Investor Accounts and the Credit Enhancement
Account.



     (a) The Series Distribution Account, Series Collections Account and Series Principal
Collections Account. The Trustee, for the benefit of the Certificateholders, shall cause to be
established and maintained in the name of the Trust, with the corporate trust department of an
office or branch of either the Trustee or a Qualified Institution, three non-interest bearing
segregated demand deposit accounts (the “Series Distribution Account”; for Collections, the “Series
Collections Account”; and for Series Principal Collections and certain other amounts deposited
therein pursuant to Section 9, the “Series Principal Collections Account”) bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trust shall possess all right, title and interest in all funds on deposit
in the Series Distribution Account, the Series Collections Account and the Series Principal
Collections Account; provided, however, that all interest and earnings (less investment expenses)
on funds on deposit in any such account shall be paid to the Holder of the Seller Certificate in
accordance with Section 4.02(c) of the Pooling and Servicing Agreement. Pursuant to authority
granted to it pursuant to Section 3.01(b) of the Pooling and Servicing Agreement, the Master
Servicer shall have the revocable power to instruct the Trustee to withdraw funds from the Series
Distribution Account, the Series Collections Account and the Series Principal Collections Account
for the purpose of carrying out the duties of the Master Servicer hereunder. The Master Servicer
at all times shall maintain accurate records reflecting each transaction in the Series Distribution
Account, the Series Collections Account and the Series Principal Collections Account. The Paying
Agent also shall have the revocable authority to make withdrawals from the Series Distribution
Account.



     (b) Reallocation Accounts. The Trustee, for the benefit of the Certificateholders, shall
cause to be established and maintained in the name of the Trust, with the corporate trust
department of an office or branch of either the Trustee or a Qualified Institution, three
non-interest bearing segregated trust accounts for the Group of which the Series established hereby
is a member (for reallocated Series Finance Charge Collections, Series Yield Collections, Class A
Investment Income and Series Additional Funds, the “Group Finance Charge Collections Reallocation
Account,” for reallocated Series Principal Collections and other amounts deposited into the Series
Principal Collections Account pursuant to Section 9, the “Group Principal Collections Reallocation
Account” and for reallocated Series Interchange, the “Group Interchange Reallocation Account”)
bearing a designation clearly indicating that the funds deposited therein are held for the benefit
of the Certificateholders. The Trust shall possess all right, title and interest in all funds on
deposit from time to time in the Group Finance Charge Collections Reallocation Account, the Group
Principal Collections Reallocation Account and the



31









 




Group Interchange Reallocation Account in all proceeds thereof. Pursuant to authority granted
to it pursuant to Section 3.01(b) of the Pooling and Servicing Agreement, the Master Servicer shall
have the revocable power to instruct the Trustee to withdraw funds from the Group Finance Charge
Collections Reallocation Account, the Group Principal Collections Reallocation Account and the
Group Interchange Reallocation Account for the purpose of carrying out the duties of the Master
Servicer hereunder. The Master Servicer at all times shall maintain accurate records reflecting
each transaction in the Group Finance Charge Collections Reallocation Account, the Group Principal
Collections Reallocation Account and the Group Interchange Reallocation Account.




     (c) The Series Principal Funding Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and maintained in the
name of the Trust, with the corporate trust department of an office or branch of either the Trustee
or a Qualified Institution, a non-interest bearing segregated trust account (for principal to be
paid to Investor Certificateholders of this Series, the “Series Principal Funding Account”) bearing
a designation clearly indicating that the funds deposited therein are held for the benefit of the
Certificateholders. The Trust shall possess all right, title and interest in all funds on deposit
from time to time in the Series Principal Funding Account and in all proceeds thereof. The Series
Principal Funding Account shall be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders. Pursuant to authority granted to it pursuant to Section 3.01(b)
of the Pooling and Servicing Agreement, the Master Servicer shall have the revocable power to
withdraw funds from the Series Principal Funding Account for the purpose of carrying out the duties
of the Master Servicer hereunder. The Master Servicer at all times shall maintain accurate records
reflecting each transaction in the Series Principal Funding Account. The Paying Agent also shall
have the revocable authority to make withdrawals from the Series Principal Funding Account.



     Funds on deposit in the Series Principal Funding Account shall be invested in Permitted
Investments by the Trustee (or, at the direction of the Trustee, by the Master Servicer on behalf
of the Trustee) at the direction of Discover Bank on behalf of the Holder of the Seller
Certificate, as set forth below. Any Permitted Investment with a stated maturity shall mature on
or prior to the following Distribution Date. On or before the occurrence of the first Distribution
Date with respect to the Accumulation Period or Controlled Liquidation Period, as applicable (and
on or before any subsequent Distribution Date in which the notice previously given is no longer
correct or valid), the Master Servicer shall notify the Trustee of the amount of Certificate
Principal to be deposited into the Series Principal Funding Account on such Distribution Date, and
Discover Bank on behalf of the Holder of the Seller Certificate shall direct the Trustee in writing
to invest the funds that will be on deposit in the Series Principal Funding Account on such
Distribution Date (including any funds previously invested in Permitted Investments that will be
available for reinvestment on such Distribution Date) in Permitted Investments. Discover Bank’s
notice to the Trustee shall specifically identify each such Permitted Investment (including its
principal amount and maturity). In addition, Discover Bank on behalf of the Holder of the Seller
Certificate shall from time to time provide written notice to the Trustee directing the Trustee to
reinvest funds representing principal, interest or other investment income received by it with
respect to such Permitted Investments (whether upon maturity or otherwise) in additional Permitted
Investments. In the event that Discover Bank on behalf of the Holder of the Seller Certificate
fails to direct the



32









 




Trustee to invest or reinvest any funds that are deposited in the Series Principal Funding
Account or that are received by it with respect to Permitted Investments by 2:00 p.m. on the date
such funds are available for investment, the Trustee shall use reasonable efforts to invest such
funds overnight in securities represented by instruments in bearer or registered form which
evidence obligations issued or fully guaranteed, as to timely payment, by the United States of
America or any instrumentality or agency thereof when such obligations are backed by the full faith
and credit of the United States of America until such time as the Trustee receives the required
notice from Discover Bank; provided, however, that the Trustee shall have no liability for the
failure to invest such funds if the Trustee has employed reasonable efforts to make such
investment.




     (d) The Series Interest Funding Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and maintained in the
name of the Trust, in the corporate trust department of an office or branch of either the Trustee
or a Qualified Institution, a non-interest bearing segregated trust account (for payment of
Certificate Interest, the “Series Interest Funding Account”) bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the Certificateholders.
The Trust shall possess all right, title and interest in all funds on deposit from time to time in
the Series Interest Funding Account and in all proceeds thereof. Pursuant to authority granted to
it pursuant to Section 3.01(b) of the Pooling and Servicing Agreement, the Master Servicer shall
have the revocable power to instruct the Trustee to withdraw funds from the Series Interest Funding
Account for the purpose of carrying out the duties of the Master Servicer hereunder. Any funds on
deposit in the Series Interest Funding Account for more than one Business Day shall be invested in
Permitted Investments pursuant to Section 4.02(c) of the Pooling and Servicing Agreement. The
Master Servicer at all times shall maintain accurate records reflecting each transaction in the
Series Interest Funding Account. The Paying Agent shall also have the revocable authority to make
withdrawals from the Series Interest Funding Account.



     (e) The Credit Enhancement Account. If the Credit Enhancement is Funded Credit Enhancement,
the Master Servicer, for the benefit of the Certificateholders and the Credit Enhancement Provider,
shall establish and maintain or cause to be established and maintained in the name of the Trust,
with the corporate trust department of an office or branch of either the Trustee or a Qualified
Institution, a non-interest bearing segregated trust account (the “Credit Enhancement Account”)
bearing a designation clearly indicating that the funds deposited therein are held for the benefit
of the Certificateholders and the Credit Enhancement Provider. The Trust shall possess all right,
title and interest in all funds on deposit from time to time in the Credit Enhancement Account and
in all proceeds thereof. The Credit Enhancement Account shall be under the sole dominion and
control of the Trustee as the administrator of the Credit Enhancement for the benefit of the
Certificateholders and the Credit Enhancement Provider; provided, however, the Master Servicer may
make Credit Enhancement Drawings pursuant to, and for the purposes set forth in, Section 9. The
interest of the Credit Enhancement Provider in the Credit Enhancement Account shall be subordinated
to the interests of the Certificateholders to the extent provided herein and in the Credit
Enhancement Agreement. The Trustee, at the direction of the Master Servicer, shall (i) on the
Series Closing Date, deposit into the Credit Enhancement Account an amount equal to the sum of the
Stated Class A Credit Enhancement Amount, the Stated Shared Credit Enhancement Amount, and the
Stated Class B Credit Enhancement Amount, as applicable (such amounts to be funded by the Credit
Enhancement



33









 




Provider pursuant to the Credit Enhancement Agreement) and (ii) make withdrawals from, and
deposits to, the Credit Enhancement Account from time to time in the amounts and for the purposes
set forth in this Series Supplement. The Credit Enhancement Provider shall not be entitled to
reimbursement from the assets of the Trust for any withdrawals from the Credit Enhancement Account
except as specifically provided in this Series Supplement. The Master Servicer at all times shall
maintain accurate records reflecting each transaction in the Credit Enhancement Account.




     Funds on deposit in the Credit Enhancement Account shall be invested in Permitted Investments
by the Trustee as administrator of the Credit Enhancement at the direction of the Master Servicer,
as set forth below. Any Permitted Investment with a stated maturity shall mature on or prior to
the following Distribution Date and any funds received with respect to the maturity of a Permitted
Investment shall be available in sufficient time to allow for any payments to be made to the
Investor Certificateholders on such Distribution Date. The Master Servicer’s notice to the Trustee
shall specifically identify each such Permitted Investment (including its principal amount and
maturity). In addition, the Master Servicer shall from time to time provide written notice to the
Trustee directing the Trustee to reinvest funds representing principal, interest or other
investment income received by it with respect to such Permitted Investments (whether upon maturity
or otherwise) in additional Permitted Investments. In the event that the Master Servicer fails to
direct the Trustee to invest or reinvest any funds that are deposited in the Credit Enhancement
Account or that are received by it with respect to Permitted Investments by 2:00 p.m. on the date
such funds are available for investment, the Trustee shall use reasonable efforts to invest such
funds overnight in securities represented by instruments in bearer or registered form which
evidence obligations issued or fully guaranteed, as to timely payment, by the United States of
America or any instrumentality or agency thereof when such obligations are backed by the full faith
and credit of the United States of America until such time as the Trustee receives the required
notice from the Master Servicer; provided, however, that the Trustee shall have no liability for
the failure to invest such funds if the Trustee has employed reasonable efforts to make such
investment.



     On each Distribution Date, all interest and earnings (net of losses and investment expenses)
accrued since the preceding Distribution Date on funds on deposit in the Credit Enhancement Account
shall be paid to the Trustee as administrator of the Credit Enhancement for application in
accordance with the provisions of the Credit Enhancement Agreement. For purposes of determining
the availability of funds or the balances in the Credit Enhancement Account, all investment
earnings on such funds shall be deemed not to be available or on deposit. If, on any Distribution
Date, after giving effect to all other deposits to and withdrawals from the Credit Enhancement
Account as of such Distribution Date, the amount on deposit in the Credit Enhancement Account is
greater than the Total Maximum Credit Enhancement Amount, then the excess of the amount on deposit
over the Total Maximum Credit Enhancement Amount shall be withdrawn from the Credit Enhancement
Account and paid to the Trustee as administrator of the Credit Enhancement for application in
accordance with the provisions of the Credit Enhancement Agreement.



     Upon the earliest to occur of (i) the termination of the Trust, (ii) the Series Termination
Date and (iii) the day on which the Class Invested Amount for each Class of the Series



34









 




established hereby is paid in full, and after payment of all amounts to be paid on such day
from the Credit Enhancement Account to or for the benefit of Investor Certificateholders of the
Series established hereby, all amounts remaining on deposit in the Credit Enhancement Account shall
be withdrawn from such account and paid to the Trustee as administrator of the Credit Enhancement
for application in accordance with the provisions of the Credit Enhancement Agreement.




     (f) The Interest Rate Swap Account. The Trustee shall establish and maintain or cause to be
established and maintained in the name of the Trust, in the corporate trust department of an office
or branch of either the Trustee or a Qualified Institution, a non-interest bearing segregated trust
account (for payment of Net Swap Payments, the “Interest Rate Swap Account”). The Trust shall
possess all right, title and interest in all funds on deposit from time to time in the Interest
Rate Swap Account and in all proceeds thereof. Pursuant to authority granted to it pursuant to
Section 3.01(b) of the Pooling and Servicing Agreement, the Master Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from the Interest Rate Swap Account for
the purpose of carrying out the duties of the Master Servicer hereunder. Any funds on deposit in
the Interest Rate Swap Account for more than one Business Day shall be invested in Permitted
Investments pursuant to Section 4.02(c) of the Pooling and Servicing Agreement. The Master
Servicer at all times shall maintain accurate records reflecting each transaction in the Interest
Rate Swap Account. The Paying Agent shall also have the revocable authority to make withdrawals
from the Interest Rate Swap Account.



     (g) Transfer of Investor Accounts. If at any time any of the Investor Accounts established in
Sections 8(a) through 8(f) is not being held by the Trustee and the institution holding such
Investor Account ceases to be a Qualified Institution, the Master Servicer shall within 10 Business
Days establish a new Investor Account (meeting any conditions specified in this Series Supplement
with respect to such Investor Account) with a Qualified Institution and transfer any cash and/or
any investments to such new Investor Account.



     SECTION 9. Allocations of Collections.



     (a) Deposits to Series Collections Account. On or before each Distribution Date, the Master
Servicer shall direct the Trustee in writing to withdraw from the Group Collections Account and
deposit into the Series Collections Account an amount equal to the sum of the Series Finance Charge
Collections, the Series Principal Collections and the Series Interchange for the related Due
Period. On or before each Distribution Date, the Class Additional Funds for each Class of the
Series established hereby shall also have been deposited into the Series Collections Account
pursuant to Section 4.03(e) of the Pooling and Servicing Agreement.



     (b) Deposits During the Revolving Period, Early Accumulation Period, Accumulation Period,
Controlled Liquidation Period or Amortization Period, as Applicable. The Master Servicer shall,
on or before each Distribution Date during the Revolving Period, the Early Accumulation Period, the
Accumulation Period, the Controlled Liquidation Period or any Amortization Period, as applicable,
direct the Trustee in writing that funds be paid or deposited in the following amounts, to the
extent such funds are available and in the order of priority specified, to the account or Person
indicated, in each case as set forth below; provided, however,



35









 




that if the Credit Enhancement is not Funded Credit Enhancement, then no amounts (other than
any Credit Enhancement Fees or any amounts paid to the Trustee as Administrator of the Credit
Enhancement in respect of the Total Available Credit Enhancement Amount) that are measured or
determined by reference to Class Excess Servicing for any Class, Series Excess Servicing or the
amount on deposit at any time in the Group Finance Charge Collections Reallocation Account or Group
Interchange Reallocation Account shall be paid or deposited if, on the related Drawing Date, the
Credit Enhancement Provider is unable to pay its debts as they become due.




               (1) During the Accumulation Period or the Early Accumulation Period, if any, or on the first
Distribution Date of the Amortization Period, if applicable, an amount equal to the amount of Class
Investment Income for the related Due Period for any Class shall be withdrawn from the Series
Principal Funding Account and deposited into the Series Collections Account.



               (2) With respect to Class A, an amount equal to the lesser of




	 	(x)	the Class A Required Amount and
	 
	 	(y)	the sum of (1) Class A Finance Charge
Collections, (2) Class A Yield Collections, if any, (3) Class A
Investment Income, if applicable, (4) Class A Interchange and (5) Class
A Additional Funds



shall be withdrawn from the Series Collections Account and deposited into the Series Distribution
Account. The amount by which the Class A Required Amount exceeds the amount of such deposit shall
be the “Class A Required Amount Shortfall.”




               (3) With respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class A Required Amount Shortfall and
	 
	 	(y)  	funds, if any, available to pay such Class A
Required Amount Shortfall from funds initially allocated to any
Subordinate Series



shall be deposited into the Series Distribution Account. The Class A Required Amount Shortfall
shall be reduced by the amount of such deposit.




               (4) With respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	Class A Excess Servicing



shall be withdrawn from the Series Collections Account and deposited into the Series Principal
Collections Account. The Class A Cumulative Investor Charged-Off Amount, Series Excess Servicing
and the Available Subordinated Amount shall be reduced by the amount of such deposit.




36









 








               (5) An amount equal to the lesser of




	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	funds, if any, available to pay such Class A
Cumulative Investor Charged-Off Amount from funds initially allocated
to any Subordinate Series



shall be deposited into the Series Principal Collections Account. The Class A Cumulative Investor
Charged-Off Amount shall be reduced by the amount of such deposit.




               (6) If there is a Subordinate Class with respect to Class A, an amount equal to the least of




	 	(x)  	the Class A Required Amount Shortfall,
	 
	 	(y)  	the Available Subordinated Amount, and
	 
	 	(z)  	Class B Available Collections



shall be withdrawn from the Series Collections Account and deposited into the Series Distribution
Account. The Class B Subordinated Payment shall be increased by, and the Class A Required Amount
Shortfall, the Available Subordinated Amount and Class B Available Collections shall be decreased
by, the amount of such deposit.




               (7) If there is a Subordinate Class with respect to Class A, an amount equal to the least of




	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount,
	 
	 	(y)  	the Available Subordinated Amount, and
	 
	 	(z)  	Class B Available Collections



shall be withdrawn from the Series Collections Account and deposited into the Series Principal
Collections Account. The Class B Subordinated Payment shall be increased by, and the Class A
Cumulative Investor Charged-Off Amount, the Available Subordinated Amount and Class B Available
Collections shall be reduced by, the amount of such deposit.




               (8) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class B Required Amount and
	 
	 	(y)  	the positive difference, if any, between





	 	(1)  	the amount of Class B Available Finance Charge Collections, and




37









 






	 	(2)  	the Class B Subordinated Payment




shall be withdrawn from the Series Collections Account and deposited into the Series Distribution
Account. The amount by which the Class B Required Amount exceeds the amount of such deposit shall
be the “Class B Required Amount Shortfall.”



               (9) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class B Required Amount Shortfall and
	 
	 	(y)  	funds, if any, available to pay such Class B
Required Amount Shortfall from funds initially allocated to any
Subordinate Series



shall be deposited into the Series Distribution Account. The Class B Required Amount Shortfall
shall be reduced by the amount of such deposit.




               (10) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class B Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	funds, if any, available to pay such Class B
Cumulative Investor Charged-Off Amount from funds initially allocated
to any Subordinate Series



shall be deposited into the Series Principal Collections Account. The Class B Cumulative Investor
Charged-Off Amount shall be reduced by the amount of such deposit.




               (11) If there is a Subordinate Class with respect to Class A, an amount equal to the least of




	 	(x)  	the Class A Required Amount Shortfall,
	 
	 	(y)  	the Available Subordinated Amount, and
	 
	 	(z)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and deposited into the Series Distribution
Account. The Class A Required Amount Shortfall, the Available Subordinated Amount and the amount
of Series Excess Servicing shall be reduced by the amount of such deposit.




               (12) If there is a Subordinate Class with respect to Class A, an amount equal to the least of




	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount,




38









 






	 	(y)  	the Available Subordinated Amount, and
	 
	 	(z)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and deposited into the Series Principal
Collections Account. The Class A Cumulative Investor Charged-Off Amount, the Available
Subordinated Amount and the amount of Series Excess Servicing shall be reduced by the amount of
such deposit. If the Class A Cumulative Investor Charged-Off Amount is greater than zero after
such reduction, the Class A Cumulative Investor Charged-Off Amount shall be further reduced by an
amount equal to the least of





	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount,
	 
	 	(y)  	the Available Subordinated Amount, and
	 
	 	(z)  	the Class B Investor Interest.



The Class A Cumulative Investor Charged-Off Amount, the Available Subordinated Amount and the Class
B Investor Interest shall each be reduced by such least amount, and the Class B Cumulative Investor
Charged-Off Amount shall be increased by such amount.



               (13) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of





	 	(x)  	the Class B Required Amount Shortfall and
	 
	 	(y)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and deposited into the Series Distribution
Account. The Class B Required Amount Shortfall and the amount of Series Excess Servicing shall be
reduced by the amount of such deposit.




               (14) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the Class B Cumulative Investor Charged-Off Amount and
	 
	 	(y)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and deposited into the Series Principal
Collections Account. The Class B Cumulative Investor Charged-Off Amount and the amount of Series
Excess Servicing shall be reduced by the amount of such deposit.




               (15) On each Distribution Date prior to the Fully Funded Date, if any, an amount equal to the
lesser of



39









 






	 	(x)  	the amount by which the Total Available Credit
Enhancement Amount is less than the Total Maximum Credit Enhancement
Amount and
	 
	 	(y)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and paid to the Trustee as administrator of
the Credit Enhancement for application in accordance with the provisions of the Credit Enhancement
Agreement. If there is Shared Credit Enhancement or Class A Cash Collateral Credit Enhancement,
such deposit shall increase the Available Shared Credit Enhancement Amount or Available Class A
Credit Enhancement Amount, until the Available Shared Credit Enhancement Amount or Available Class
A Credit Enhancement Amount, as applicable, equals the Maximum Shared Credit Enhancement Amount or
the Maximum Class A Credit Enhancement Amount, as applicable. If there is a Subordinate Class with
respect to Class A, any remaining portion of such deposit shall increase the Available Class B
Credit Enhancement Amount until the Available Class B Credit Enhancement Amount equals the Maximum
Class B Credit Enhancement Amount. The Total Available Credit Enhancement Amount shall be
increased by, and the amount of Series Excess Servicing shall be decreased by, the amount of such
deposit.




               (16) If there is Shared Credit Enhancement or Class A Cash Collateral Credit Enhancement, and
if the Class A Required Amount Shortfall is greater than zero, the Master Servicer, on the related
Drawing Date, shall make a Credit Enhancement Drawing in an amount equal to the lesser of




	 	(x)  	the Class A Required Amount Shortfall and
	 
	 	(y)  	the Available Shared Credit Enhancement Amount
or the Available Class A Credit Enhancement Amount, as applicable,



and such amount shall be deposited into the Series Distribution Account. The Class A Required
Amount Shortfall and the Available Shared Credit Enhancement Amount or Available Class A Credit
Enhancement Amount, as applicable, shall be reduced by the amount of such deposit.




               (17) If there is Shared Credit Enhancement or Class A Cash Collateral Credit Enhancement, and
if the Class A Cumulative Investor Charged-Off Amount is greater than zero, the Master Servicer, on
the related Drawing Date, shall make a Credit Enhancement Drawing in an amount equal to the lesser
of




	 	(x)  	the Class A Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	the Available Shared Credit Enhancement Amount
or the Available Class A Credit Enhancement Amount, as applicable,



and such amount shall be deposited into the Series Principal Collections Account. The Class A
Cumulative Investor Charged-Off Amount and the Available Shared Credit Enhancement


40









 






Amount or Available Class A Credit Enhancement Amount, as applicable, shall be reduced by the
amount of such deposit.




               (18) If there is Shared Credit Enhancement, and if there is a Subordinate Class with respect
to Class A, and if the Class B Required Amount Shortfall is greater than zero, the Master Servicer,
on the related Drawing Date, shall make a Credit Enhancement Drawing in an amount equal to the
lesser of




	 	(x)  	the Class B Required Amount Shortfall and
	 
	 	(y)  	the Available Shared Credit Enhancement Amount



and such amount shall be deposited into the Series Distribution Account. The Class B Required
Amount Shortfall and the Available Shared Credit Enhancement Amount shall be reduced by the amount
of such deposit.




               (19) If there is Shared Credit Enhancement, and if there is a Subordinate Class with respect
to Class A, and if the Class B Cumulative Investor Charged-Off Amount is greater than zero, the
Master Servicer, on the related Drawing Date, shall make a Credit Enhancement Drawing in an amount
equal to the lesser of




	 	(x)  	the Class B Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	the Available Shared Credit Enhancement Amount



and such amount shall be deposited into the Series Principal Collections Account. The Class B
Cumulative Investor Charged-Off Amount and the Available Shared Credit Enhancement Amount shall be
reduced by the amount of such deposit.




               (20) If there is Subordinate Class with respect to Class A, and if the Class B Required Amount
Shortfall is greater than zero, the Master Servicer, on the related Drawing Date, shall make a
Credit Enhancement Drawing in an amount equal to the lesser of




	 	(x)  	the Class B Required Amount Shortfall and
	 
	 	(y)  	the Available Class B Credit Enhancement Amount



and such amount shall be deposited into the Series Distribution Account. The Class B Required
Amount Shortfall and the Available Class B Credit Enhancement Amount shall be reduced by the amount
of such deposit.




               (21) If there is a Subordinate Class with respect to Class A, and if the Class B Cumulative
Investor Charged-Off Amount is greater than zero, the Master Servicer, on the related Drawing Date,
shall make a Credit Enhancement Drawing in an amount equal to the lesser of




	 	(x)  	the Class B Cumulative Investor Charged-Off
Amount and



41









 











	 	(y)  	the Available Class B Credit Enhancement Amount



and such amount shall be deposited into the Series Principal Collections Account. The Class B
Cumulative Investor Charged-Off Amount and the Available Class B Credit Enhancement Amount shall be
reduced by the amount of such deposit.




               (22) An amount equal to the lesser of




	 	(x)  	the Credit Enhancement Fee and
	 
	 	(y)  	Series Excess Servicing



shall be withdrawn from the Series Collections Account and paid to the Trustee as the administrator
of the Credit Enhancement for application in accordance with the provisions of the Credit
Enhancement Agreement. The amount of Series Excess Servicing shall be reduced by the amount of
such payment.




               (23) An amount equal to the Monthly Swap Deposit, if any, up to the remaining amount of Series
Excess Servicing, shall be withdrawn from the Series Collections Account and deposited into the
Interest Rate Swap Account. The amount of Series Excess Servicing shall be reduced by the amount
of such deposit.



               (24) The positive difference, if any, of the amount of Series Excess Servicing minus, for so
long as any Series that is not an Interchange Series is outstanding, the amount of Series
Interchange, shall be withdrawn from the Series Collections Account and deposited into the Group
Finance Charge Collections Reallocation Account.



               (25) The allocations set forth in clauses (25)(A) and (25)(B) shall be made, first, with
respect to Class A, and then, if there is a Subordinate Class with respect to Class A, the
allocations set forth in clauses (25)(A) and (25)(B) shall be made with respect to Class B, to the
extent that funds are available pursuant to this clause (25):



               (A) An amount equal to the lesser of




	 	(x)  	the Class Required Amount Shortfall and
	 
	 	(y)  	the product of





	 	(1)  	a fraction the numerator of which
is the Class Required Amount Shortfall and the denominator of
which is the sum of the Class Required Amount Shortfalls for all
Classes designated by the same letter of the alphabet of all
Series in the Group to which the Series established hereby
belongs (after giving effect to provisions in the applicable
Series Supplements substantially similar to the clauses
preceding this clause (25)) and



42









 











	 	(2)  	the amount on deposit in the
Group Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other Series pursuant
to a comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Finance Charge Collections Reallocation Account and deposited
into the Series Distribution Account. The Class Required Amount Shortfall shall be reduced by the
amount of such deposit. The Available Subordinated Amount shall be increased by the amount of any
such deposit that reduces the Class B Required Amount Shortfall.




               (B) An amount equal to the lesser of




	 	(x)  	the Class Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	the product of





	 	(1)  	a fraction the numerator of which
is the Class Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the Class Cumulative Investor
Charged-Off Amounts for all Classes designated by the same
letter of the alphabet of all Series in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (25)) and
	 
	 	(2)  	the amount on deposit in the
Group Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other Series pursuant
to a comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Finance Charge Collections Reallocation Account and deposited
into the Series Principal Collections Account. The Class Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit. The Available Subordinated Amount shall be
increased by the amount of any such deposit that reduces the Class B Cumulative Investor
Charged-Off Amount.




               (C) After the allocations set forth in clauses (25)(A) and (25)(B) are made with respect to
Class A and Class B, then, if there are one or more Subordinate Classes other than Class B, the
allocations set forth in clauses (25)(A) and (25)(B) shall be made with respect to each other such
Class, in alphabetical order, to the extent that funds are available pursuant to this clause (25).



               (26) The allocations set forth in clauses (26)(A) and (26)(B) shall be made, to the extent
that funds are available pursuant to this clause (26):



43









 





               (A) If there is Shared Credit Enhancement or Class A Cash Collateral Credit Enhancement, an
amount equal to the lesser of




	 	(x)  	the amount by which the Available Shared Credit
Enhancement Amount or the Available Class A Credit Enhancement Amount,
as applicable, is less than the Maximum Shared Credit Enhancement
Amount or the Maximum Class A Credit Enhancement Amount, as applicable
and
	 
	 	(y)  	the product of





	 	(1)  	a fraction, the numerator of
which is the amount by which the Available Shared Credit
Enhancement Amount or the Available Class A Credit Enhancement
Amount, as applicable, is less than the Maximum Shared Credit
Enhancement Amount or the Maximum Class A Credit Enhancement
Amount, as applicable, and the denominator of which is the sum
of, for each Series in the Group of which the Series established
hereby is a member, the amount by which the Available Shared
Credit Enhancement Amount or the Available Class A Credit
Enhancement Amount, as applicable, for such Series is less than
the Maximum Shared Credit Enhancement Amount or the Maximum
Class A Credit Enhancement Amount, as applicable, for such
Series (after giving effect to provisions in the applicable
Series Supplements substantially similar to the clauses
preceding this clause (26)) and
	 
	 	(2)  	the amount on deposit in the
Group Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other Series pursuant
to a comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Finance Charge Collections Reallocation Account and paid to the
Trustee as administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. Such deposit shall increase the Available Shared
Credit Enhancement Amount or the Available Class A Credit Enhancement Amount, as applicable.




               (B) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the amount by which the Available Class B
Credit Enhancement Amount is less than the Maximum Class B Credit
Enhancement Amount and
	 
	 	(y)  	the product of



44









 











	 	(1)  	a fraction, the numerator of
which is the amount by which the Available Class B Credit
Enhancement Amount is less than the Maximum Class B Credit
Enhancement Amount and the denominator of which is the sum of,
for each Series in the Group of which the Series established
hereby is a member, the amount by which the Available Class B
Credit Enhancement Amount for such Series is less than the
Maximum Class B Credit Enhancement Amount for such Series (after
giving effect to provisions in the applicable Series Supplements
substantially similar to the clauses preceding this clause (26))
and
	 
	 	(2)  	the amount on deposit in the
Group Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other Series pursuant
to a comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Finance Charge Collections Reallocation Account and paid to the
Trustee as administrator of the Credit Enhancement for application in accordance with the
provisions of the Credit Enhancement Agreement. Each of the Available Class B Credit Enhancement
Amount and the Available Subordinated Amount shall be increased by the amount of such deposit.




               (27) After all allocations from the Group Finance Charge Collections Reallocation Account to
be made pursuant to any other Series Supplement for any Series that is a member of the same Group
of which the Series established hereby is a member have been made, an amount equal to the product
of (x) a fraction the numerator of which shall be the Series Investor Interest and the denominator
of which shall be the sum of the Series Investor Interests for each Series that is a member of the
same Group as the Series established hereby (including the Series established hereby) and (y) the
amount remaining on deposit in the Group Finance Charge Collections Reallocation Account shall be
withdrawn from the Group Finance Charge Collections Reallocation Account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the provisions of the
Credit Enhancement Agreement. Amounts remaining on deposit in the Group Finance Charge Collections
Reallocation Account shall be withdrawn from such account and allocated pursuant to the provisions
of the Series Supplements for each other Series that is a member of the same Group as the Series
established hereby.



               (28) For so long as any Series that is not an Interchange Series is
outstanding, an amount equal to the lesser of:




	 	(x)  	Series Excess Servicing and
	 
	 	(y)  	Series Interchange




45









 




shall be withdrawn from the Series Collections Account and deposited into the Group Interchange
Reallocation Account.




               (29) Any amounts remaining on deposit in the Series Collections Account shall be withdrawn
from the Series Collections Account and deposited into the Series Principal Collections Account.



               (30) For so long as any Series that is not an Interchange Series is outstanding, the
allocations set forth in clauses (30)(A) and (30)(B) shall be made, first, with respect to Class A,
and then, if there is a Subordinate Class with respect to Class A, the allocations set forth in
clauses (30)(A) and (30)(B) shall be made with respect to Class B, to the extent that funds are
available pursuant to this clause (30):



               (A) An amount equal to the lesser of




	 	(x)  	the Class Required Amount Shortfall and
	 
	 	(y)  	the product of





	 	(1)  	a fraction the numerator of which
is the Class Required Amount Shortfall and the denominator of
which is the sum of the Class Required Amount Shortfalls for all
Classes designated by the same letter of the alphabet of all
Interchange Series in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this clause (30)) and
	 
	 	(2)  	the amount on deposit in the
Group Interchange Reallocation Account before any withdrawals
therefrom with respect to any other Series pursuant to a
comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Interchange Reallocation Account and deposited into the Series
Distribution Account. The Class Required Amount Shortfall shall be reduced by the amount of such
deposit. The Available Subordinated Amount shall be increased by the amount of any such deposit
that reduces the Class B Required Amount Shortfall.




               (B) An amount equal to the lesser of




	 	(x)  	the Class Cumulative Investor Charged-Off
Amount and
	 
	 	(y)  	the product of





	 	(1)  	a fraction the numerator of which
is the Class Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the Class Cumulative Investor




46









 






	 	   	Charged-Off Amounts for all Classes designated by the same
letter of the alphabet of all Interchange Series in the Group
to which the Series established hereby belongs (after giving
effect to provisions in the applicable Series Supplements
substantially similar to the clauses preceding this clause
(30)) and
	 
	 	(2)  	the amount on deposit in the
Group Interchange Reallocation Account before any withdrawals
therefrom with respect to any other Series pursuant to a
comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Interchange Reallocation Account and deposited into the Series
Principal Collections Account. The Class Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit. The Available Subordinated Amount shall be increased by the amount
of any such deposit that reduces the Class B Cumulative Investor Charged-Off Amount.




               (C) After the allocations set forth in clauses (30)(A) and (30)(B) are made with respect to
Class A and Class B, then, if there are one or more Subordinate Classes other than Class B, the
allocations set forth in clauses (30)(A) and (30)(B) shall be made with respect to each other such
Class, in alphabetical order, to the extent that funds are available pursuant to this clause (30).



               (31) For so long as any Series that is not an Interchange Series is outstanding, the
allocations set forth in clauses (31)(A) and (31)(B) shall be made, to the extent that funds are
available pursuant to this clause (31):



               (A) If there is Shared Credit Enhancement or Class A Cash Collateral Credit Enhancement, an
amount equal to the lesser of




	 	(x)  	the amount by which the Available Shared Credit
Enhancement Amount or the Available Class A Credit Enhancement Amount,
as applicable, is less than the Maximum Shared Credit Enhancement
Amount or the Maximum Class A Credit Enhancement Amount, as applicable
and
	 
	 	(y)  	the product of





	 	(1)  	a fraction, the numerator of
which is the amount by which the Available Shared Credit
Enhancement Amount or the Available Class A Credit Enhancement
Amount, as applicable, is less than the Maximum Shared Credit
Enhancement Amount or the Maximum Class A Credit Enhancement
Amount, as applicable, and the denominator of which is the sum
of, for each Interchange Series in the Group to which the Series
established hereby belongs, the




47









 






	 	   	amount by which the Available Shared Credit Enhancement
Amount or the Available Class A Credit Enhancement Amount, as
applicable, for such Series is less than the Maximum Shared
Credit Enhancement Amount or the Maximum Class A Credit
Enhancement Amount, as applicable, for such Series (after
giving effect to provisions in the applicable Series
Supplements substantially similar to the clauses preceding
this clause (31)) and
	 
	 	(2)  	the amount on deposit in the
Group Interchange Reallocation Account before any withdrawals
therefrom with respect to any other Series pursuant to a
comparable clause in the applicable Series Supplements,



shall be withdrawn from the Group Interchange Reallocation Account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the provisions of the
Credit Enhancement Agreement. Such deposit shall increase the Available Shared Credit Enhancement
Amount or the Available Class A Credit Enhancement Amount, as applicable.




               (B) If there is a Subordinate Class with respect to Class A, an amount equal to the lesser of




	 	(x)  	the amount by which the Available Class B
Credit Enhancement Amount is less than the Maximum Class B Credit
Enhancement Amount and
	 
	 	(y)  	the product of





	 	(1)  	a fraction, the numerator of
which is the amount by which the Available Class B Credit
Enhancement Amount is less than the Maximum Class B Credit
Enhancement Amount and the denominator of which is the sum of,
for each Interchange Series in the Group to which the Series
established hereby belongs, the amount by which the Available
Class B Credit Enhancement Amount for such Series is less than
the Maximum Class B Credit Enhancement Amount for such Series
(after giving effect to provisions in the applicable Series
Supplements substantially similar to the clauses preceding this
clause (31)) and
	 
	 	(2)  	the amount on deposit in the
Group Interchange Reallocation Account before any withdrawals
therefrom with respect to any other Series pursuant to a
comparable clause in the applicable Series Supplements,



48









 









shall be withdrawn from the Group Interchange Reallocation Account and paid to the Trustee as
administrator of the Credit Enhancement for application in accordance with the provisions of the
Credit Enhancement Agreement. Each of the Available Class B Credit Enhancement Amount and the
Available Subordinated Amount shall be increased by the amount of such deposit.




               (32) After all allocations from the Group Interchange Reallocation Account to be made pursuant
to any other Series Supplement for any Interchange Series that is a member of the same Group of
which the Series established hereby is a member have been made, an amount equal to the product of
(x) a fraction the numerator of which shall be the Series Investor Interest and the denominator of
which shall be the sum of the Series Investor Interests for each Interchange Series in the Group to
which the Series established hereby belongs (including the Series established hereby) and (y) the
amount remaining on deposit in the Group Interchange Reallocation Account shall be withdrawn from
the Group Interchange Reallocation Account and paid to the Trustee as administrator of the Credit
Enhancement for application in accordance with the provisions of the Credit Enhancement Agreement.
Amounts remaining on deposit in the Group Interchange Reallocation Account shall be withdrawn from
such account and allocated pursuant to the provisions of the Series Supplements for each other
Interchange Series in the Group to which the Series established hereby belongs.



               (33) The Net Swap Receipt, to the extent paid to the Trustee by the Interest Rate Swap
Counterparty pursuant to the Class Interest Rate Swap, shall be deposited in the Series Collections
Account.



               (34) Any amount remaining on deposit in the Series Collections Account will be withdrawn from
the Series Collections Account and paid to the Holder of the Seller Certificate.



               (35) Unless the Distribution Date is a Distribution Date in the Revolving Period, the lesser
of




	 	(x)  	the Principal Distribution Amount and
	 
	 	(y)  	the amount on deposit in the Series Principal
Collections Account



shall be withdrawn from the Series Principal Collections Account and deposited into the Series
Principal Funding Account. The amount by which the Principal Distribution Amount exceeds the
amount of such deposit shall be the “Principal Distribution Amount Shortfall.”




               (36) Unless the Distribution Date is a Distribution Date in the Revolving Period, the lesser
of




	 	(x)  	the Principal Distribution Amount Shortfall and
	 
	 	(y)  	funds, if any, available to pay such Principal
Distribution Amount Shortfall from funds initially allocated to any
Subordinate Series




49









 




shall be deposited into the Series Principal Funding Account. The Principal Distribution Amount
Shortfall shall be reduced by the amount of such deposit.




               (37) Any amounts remaining on deposit in the Series Principal Collections Account shall be
withdrawn from the Series Principal Collections Account and be deposited into the Group Principal
Collections Reallocation Account.



               (38) During the Accumulation Period or the Controlled Liquidation Period, as applicable, the
allocation set forth below shall be made with respect to each Class, beginning with Class A and
continuing, seriatim, for each Class, to the extent that funds are available pursuant to this
clause (38):



An amount equal to the lesser of





	 	(x)  	the portion of the Principal Distribution Amount Shortfall that
is allocable to such Class and
	 
	 	(y)  	the product of





	 	(1)  	a fraction the numerator of which is the
portion of the Principal Distribution Amount Shortfall that is
allocable to such Class and the denominator of which is the sum of the
portions of the Principal Distribution Amount Shortfalls allocable to
all Classes designated by the same letter of the alphabet of all Series
in the Group to which the Series established hereby belongs that are in
their Accumulation Periods or Controlled Liquidation Periods, as
applicable (after giving effect to provisions in the applicable Series
Supplements substantially similar to the clauses preceding this clause
(38) and
	 
	 	(2)  	the amount on deposit in the Group Principal
Collections Reallocation Account before any withdrawals therefrom with
respect to any other Series



shall be withdrawn from the Group Principal Collections Reallocation Account and deposited into the
Series Principal Funding Account. The Principal Distribution Amount Shortfall shall be reduced by
the amount of such deposit.




               (39) After all allocations from the Group Principal Collections Reallocation Account to be
made pursuant to any other Series Supplement for any Series that is a member of the same Group of
which the Series established hereby is a member have been made, the amount remaining on deposit in
the Group Principal Collections Reallocation Account shall be withdrawn from the Group Principal
Collections Reallocation Account and deposited into the Collections Account.



50









 





               (40) After all other allocations have been provided for with respect to each Series then
outstanding (whether or not such Series is a member of the same Group as the Series established
hereby), the lesser of




	 	(x)  	the amount of the Seller Interest and
	 
	 	(y)  	the amount on deposit in the Collections Account



shall be paid to the Holder of the Seller Certificate. If, after such payment, any amounts remain
on deposit in the Collections Account, such amounts shall remain in the Collections Account for
allocation as Principal Collections on the next Trust Distribution Date.




     SECTION 10. Payments.



     (a) Payments.



               (1) On each Distribution Date related to a Due Period in the Accumulation Period or the Early
Accumulation Period, and on the first Distribution Date of the Amortization Period, the Master
Servicer shall direct the Trustee in writing to withdraw the amount of Excess Income, if any, on
deposit in the Series Principal Funding Account from the Series Principal Funding Account and pay
such amount to the Holder of the Seller Certificate.



               (2) On each Distribution Date, after giving effect to payments made pursuant to Section 9 and
the calculation of Investor Losses and adjustment of the Class Investor Interest and Class Invested
Amount with respect to each Class pursuant to Section 13, the Master Servicer shall direct the
Trustee in writing to withdraw and cause the Paying Agent to pay funds from the applicable Investor
Account to or for the benefit of each Class of Investor Certificateholders, seriatim, with respect
to each Class, beginning with Class A, until such payments have been made with respect to each
Class, as set forth below:



               (A) First, an amount equal to the lesser of




	 	(x)  	the Class Modified Required Amount and
	 
	 	(y)  	the amount on deposit in the Series
Distribution Account



shall be withdrawn from the Series Distribution Account and deposited into the Series Interest
Funding Account. The amount by which the Class Modified Required Amount exceeds the amount so
deposited into the Series Interest Funding Account shall be the “Class Monthly Deficiency Amount”
with respect to such Distribution Date.




               (B) Second, an amount equal to the lesser of




	 	(x)  	the sum of the Class Monthly Servicing Fee for
such Distribution Date and all accrued but unpaid Class Monthly
Servicing Fees from prior months and



51









 











	 	(y)  	the amount deposited into the Series
Distribution Account with respect to such Class on such Distribution
Date pursuant to Section 9 less the amount deposited into the Series
Interest Funding Account with respect to such Class pursuant to clause
(A) above



shall be withdrawn from the Series Distribution Account and paid to the Master Servicer.




               (3) On each Interest Payment Date, the Master Servicer shall direct the Trustee in writing to
deposit into the Series Interest Funding Account any Class Interest Rate Cap Payment made by any
Interest Rate Cap Provider for any Class or Subclass pursuant to the Class Interest Rate Cap for
such Class or Subclass.



               (4) On each Interest Payment Date, after giving effect to the payments described above on such
day, the Master Servicer shall direct the Trustee in writing to withdraw the amount deposited into
the Series Interest Funding Account with respect to each Class or Subclass since the preceding
Interest Payment Date. The Master Servicer shall cause the Paying Agent to pay such amount on each
Interest Payment Date to the Investor Certificateholders of such Class or Subclass in accordance
with Section 5.01 of the Pooling and Servicing Agreement.



               (5) On each Interest Payment Date (or, following the early termination of the Class Interest
Rate Swap, on each Distribution Date), the Master Servicer shall direct the Trustee in writing to
withdraw any Net Swap Payment from the Interest Rate Swap Account and pay such amount to the
Interest Rate Swap Counterparty in accordance with the provisions of the Class Interest Rate Swap.



               (6) Reserved.



               (7) On each Principal Payment Date, after giving effect to the payments described above on
such day, an amount equal to the lesser of




	 	(x)  	the Controlled Liquidation Amount and
	 
	 	(y)  	the amount deposited into the Series Principal
Funding Account on any Distribution Date pursuant to Section 9



shall be withdrawn from the Series Principal Funding Account. The Master Servicer shall cause the
Paying Agent to pay such amount to the Investor Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and Servicing Agreement. Except as set forth in the
following sentence, all such amounts shall be paid to or with respect to the Class A Investor
Certificateholders until the Class A Invested Amount is reduced to zero; and, thereafter, if there
is a Subordinate Class with respect to Class A, such amounts shall be paid to or with respect to
the Class B Investor Certificateholders until the Class B Invested Amount is reduced to zero,
unless the Series Termination Date occurs prior to such date; provided, however, that on the Fully
Funded Date, if any, the Class B Invested Amount shall be withdrawn from the Series Principal
Funding Account and paid to the Class B Investor Certificateholders. In no event shall any amounts
be paid with respect to any Class of Investor Certificates pursuant to this clause (7)


52









 






in excess of the Class Invested Amount for such Class. Any amounts remaining on deposit in the
Series Principal Funding Account after the Class Invested Amount for each Class has been reduced to
zero shall be paid to the Holder of the Seller Certificate.




               (8) On each Special Payment Date during the Amortization Period, after giving effect to the
payments described above on such day, an amount equal to the lesser of




	 	(x)  	the Principal Distribution Amount and
	 
	 	(y)  	the amount deposited into the Series Principal
Funding Account on such Special Payment Date pursuant to Section 9



shall be withdrawn from the Series Principal Funding Account. The Master Servicer shall cause the
Paying Agent to pay such amount to the Investor Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and Servicing Agreement. Except as set forth in the
following sentence, all such amounts shall be paid to or with respect to the Class A Investor
Certificateholders until the Class A Invested Amount is reduced to zero; and, thereafter, if there
is a Subordinate Class with respect to Class A, such amounts shall be paid to or with respect to
the Class B Investor Certificateholders until the Class B Invested Amount is reduced to zero,
unless the Series Termination Date occurs prior to such date. In no event shall any amounts be
paid with respect to any Class of Investor Certificates pursuant to this clause (8) in excess of
the Class Invested Amount for such Class. Any amounts remaining on deposit in the Series Principal
Funding Account after the Class Invested Amount for each Class has been reduced to zero shall be
paid to the Holder of the Seller Certificate.




               (9) On the first Distribution Date of the Amortization Period, if any, after giving effect to
the payments and withdrawals and conversions described above on such day, an amount equal to the
lesser of




	 	(x)  	the Series Invested Amount and
	 
	 	(y)  	the amount on deposit in the Series Principal
Funding Account



shall be withdrawn from the Series Principal Funding Account. The Master Servicer shall cause the
Paying Agent to pay such amount to the Investor Certificateholders of such Class or Subclass in
accordance with Section 5.01 of the Pooling and Servicing Agreement. Except as set forth in the
following sentence, all such amounts shall be paid to or with respect to the Class A Investor
Certificateholders until the Class A Invested Amount is reduced to zero; and, thereafter, if there
is a Subordinate Class with respect to Class A, such amounts shall be paid to or with respect to
the Class B Investor Certificateholders until the Class B Invested Amount is reduced to zero,
unless the Series Termination Date occurs prior to such date. In no event shall any amounts be
paid with respect to any Class of Investor Certificates pursuant to this clause (9) in excess of
the Class Invested Amount for such Class. Any amounts remaining on deposit in the Series Principal
Funding Account after the Class Invested Amount for each Class has been reduced to zero shall be
paid to the Holder of the Seller Certificate.




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               (10) On the Class Expected Final Payment Date or the Class Final Maturity Date, if applicable
(or, if such Class Expected Final Payment Date or Class Final Maturity Date is not also a
Distribution Date, on the Distribution Date occurring in the same calendar month as the Class
Expected Final Payment Date or the Class Final Maturity Date, if applicable), the Master Servicer
shall direct the Trustee in writing to withdraw the amount on deposit in the Series Principal
Funding Account with respect to each Class; provided that (i) such amount shall be no greater than
the Class Invested Amount and (ii) funds, if any, remaining on deposit in the Series Principal
Funding Account after the payment in full of the Class Invested Amount with respect to each Class
shall be withdrawn and paid to the Holder of the Seller Certificate. The Master Servicer shall
cause the Paying Agent to pay such amount to the Investor Certificateholders of such Class or
Subclass in accordance with Section 5.01 of the Pooling and Servicing Agreement.



     (b) Payments to the Sellers and/or the Master Servicer. Notwithstanding the other provisions
in Section 9 and this Section 10, any amounts payable to Discover Bank on behalf of the Holder of
the Seller Certificate or to the Master Servicer on any Distribution Date pursuant to Section 9 and
this Section 10 may be paid prior to such Distribution Date pursuant to Section 4.03(d) of the
Pooling and Servicing Agreement.



     SECTION 11. Credit Enhancement.



     (a) Initial Credit Enhancement. The Master Servicer hereby represents with respect to the
Initial Credit Enhancement and shall be deemed to represent with respect to any successor Credit
Enhancement that (i) the Master Servicer has provided for the Credit Enhancement for the account of
the Trustee and for the benefit of the Investor Certificateholders, (ii) the Master Servicer has
entered into a Credit Enhancement Agreement, (iii) the Credit Enhancement permits the Trustee or
the Master Servicer, acting as the Trustee’s attorney-in-fact or otherwise, to make Credit
Enhancement Drawings from time to time in an amount up to the Total Available Credit Enhancement
Amount at such time, for the purposes set forth in this Agreement and (iv) the Credit Enhancement
and the respective Credit Enhancement Agreement may be terminated by the Trustee without penalty if
(x) the Master Servicer elects to obtain a successor Credit Enhancement and such successor Credit
Enhancement does not cause the ratings of the Investor Certificates of the Series established
hereby to be withdrawn or lowered by either of the Rating Agencies from the respective ratings of
such Investor Certificates immediately prior to such election or (y) if the Credit Enhancement is
not Funded Credit Enhancement, the Credit Enhancement Provider ceases to be a Qualified Credit
Enhancement Provider.



     (b) Successor Credit Enhancement.




       (i) If the Credit Enhancement is not Funded Credit Enhancement and if, at any time, the
provider of such Credit Enhancement ceases to be a Qualified Credit Enhancement Provider,
the Master Servicer shall obtain a successor Credit Enhancement within 30 days or such
longer period as will not result in the lowering or withdrawal of the rating of any Class of
any Series then outstanding by the Rating Agencies (a) which, if such successor Credit
Enhancement is not to be Funded Credit Enhancement, will be issued by a Qualified Credit
Enhancement Provider and (b) with respect to which the



54









 






representations set forth in Section 11(a) will be satisfied; provided, however, that
the Master Servicer shall not be required to continue efforts to obtain a successor Credit
Enhancement if the then existing Credit Enhancement Provider again becomes a Qualified
Credit Enhancement Provider and remains such; and, provided, further, that unless otherwise
agreed to by the Rating Agencies, the Credit Enhancement and Credit Enhancement Agreement
will not be terminated and no successor Credit Enhancement Provider shall be selected if the
successor Credit Enhancement, the successor Credit Enhancement Agreement, or the selection
of such successor Credit Enhancement Provider would cause the ratings of the Investor
Certificates of the Series established hereby to be withdrawn or lowered by either Rating
Agency from the respective ratings of such Investor Certificates immediately prior to such
selection. The Master Servicer, the Trustee and the Sellers shall promptly enter into any
such successor Credit Enhancement Agreement, and the Master Servicer shall use its best
efforts to secure the signature of any other required party to such agreement.




       (ii) Regardless of whether the Credit Enhancement is Funded Credit Enhancement, the
Master Servicer may elect, at any time, to obtain a successor Credit Enhancement, provided
that such successor Credit Enhancement does not cause the ratings of the Investor
Certificates of the Series established hereby to be withdrawn or lowered by either of the
Rating Agencies from the respective ratings of such Investor Certificates immediately prior
to such election.




       (iii) In any case, subject to the foregoing, any successor Credit Enhancement obtained
by the Master Servicer need not consist of the same type of Credit Enhancement as the
Initial Credit Enhancement, but may consist of a different type of facility, including, but
not limited to, a reserve account, a cash collateral account, an irrevocable standby letter
of credit, a surety bond or a combination of any of the above. Upon issuance of, or other
provision for, any such successor Credit Enhancement, the Trustee shall terminate the prior
Credit Enhancement and Credit Enhancement Agreement.



     (c) Supplemental Credit Enhancement Event. Upon the occurrence of a Supplemental Credit
Enhancement Event, Discover Bank as Servicer shall, within 60 days of notice from Standard & Poor’s
of the withdrawal or downgrade (or such longer period as may be agreed to by Standard & Poor’s),
arrange for the payment of the Supplemental Credit Enhancement Amount, if any, by a Person other
than Discover Bank to the Trustee as administrator of the Credit Enhancement for application in
accordance with the provisions of the Credit Enhancement Agreement. Both the form and the provider
of the Supplemental Credit Enhancement Amount, if any, shall be determined at the time it is to be
paid; provided, that the Master Servicer shall have received confirmation from Standard & Poor’s
that the arrangements with respect to the Supplemental Credit Enhancement Amount, if any, will not
result in the rating of the Investor Certificates of the Series established hereby being withdrawn
or lowered. In addition to the foregoing, the Master Servicer shall notify Moody’s of the
occurrence of a Supplemental Credit Enhancement Event as soon as practicable after such occurrence,
and shall notify Moody’s in advance of its implementation of the form and provider of the
Supplemental Credit Enhancement Amount, if any.



55









 





     SECTION 12. Alternative Credit Support Election.



     (a) The Sellers may elect to effect a change in the calculation of the Class Percentage with
respect to Finance Charge Collections during the Early Accumulation Period or the Amortization
Period, as set forth in the definition of “Class Percentage,” and increase the Available Class B
Credit Enhancement Amount, by making an Alternative Credit Support Election. An Alternative Credit
Support Election may be made as follows:




       (i) at any time during the Revolving Period, Discover Bank on behalf of the Holder of
the Seller Certificate shall deliver written notice of such Alternative Credit Support
Election to the Rating Agencies, the Trustee and the Credit Enhancement Provider;




       (ii) prior to the last day of the Revolving Period, the Additional Credit Support
Amount shall be paid to the Trustee as administrator of the Credit Enhancement for
application in accordance with the provisions of the Credit Enhancement Agreement; provided,
however, that following an Early Accumulation Event or an Amortization Event, the Additional
Credit Support Amount may be paid to the Trustee as administrator of the Credit Enhancement
at any time on or prior to the last day of the Due Period in which the Early Accumulation
Event or the Amortization Event occurs;




       (iii) prior to the last day of the Revolving Period (or, following an Early
Accumulation Event or an Amortization Event during the Revolving Period, on or prior to the
last day of the Due Period in which the Early Accumulation Event or the Amortization Event
occurs), the Rating Agencies shall have confirmed that the Alternative Credit Support
Election shall not cause a reduction in or withdrawal of the rating of any Class of Investor
Certificates of the Series established hereby; and




       (iv) prior to the last day of the Revolving Period (or, following an Early Accumulation
Event or an Amortization Event during the Revolving Period, on or prior to the last day of
the Due Period in which the Early Accumulation Event or the Amortization Event occurs),
Discover Bank on behalf of the Holder of the Seller Certificate shall have delivered to the
Rating Agencies written confirmation that the conclusions reached in the legal opinions
delivered on the Initial Closing Date regarding the absolute transfer of the Receivables and
the security interest of the Trust in the Receivables are not affected by the Alternative
Credit Support Election.



     (b) If each of the actions set forth in Section 12(a) above has been taken or satisfied as
required, the Alternative Credit Support Election shall become effective on the last day of the Due
Period in which the Additional Credit Support Amount has been paid to the Trustee as administrator
of the Credit Enhancement (an “Effective Alternative Credit Support Election”).



     (c) At any time until the Alternative Credit Support Election becomes effective, such
Alternative Credit Support Election may be cancelled upon notice to the Rating Agencies, the
Trustee and the Credit Enhancement Provider. Thereafter, the Additional Credit Support



56









 







Amount, if any, shall be returned by the Trustee as administrator of the Credit Enhancement in
accordance with the Credit Enhancement Agreement.



     SECTION 13. Calculation of Investor Losses.



     (a) For each Distribution Date, the Master Servicer shall calculate the Class Investor
Charged-Off Amount and the Class Cumulative Investor Charged-Off Amount with respect to each Class,
in each case as of the end of the related Due Period.



     (b) If on any Distribution Date, the Class Investor Charged-Off Amount with respect to any
Class exceeds the Class Charge-Off Reimbursement Amount with respect to such Class, the Class
Investor Interest and the Class Invested Amount for such Class shall each be reduced by the amount
of such excess (an “Investor Charge-Off Loss” with respect to such Class).



     (c) On each Distribution Date the Class Investor Interest and the Class Invested Amount for
each Class shall be increased by, and the amount of aggregate unreimbursed Investor Losses for each
such Class shall be decreased by, the positive difference, if any, between the Class Charge-Off
Reimbursement Amount on such Distribution Date and the Class Investor Charged-Off Amount for such
Distribution Date; provided, however, that neither the Class Invested Amount nor the Class Investor
Interest shall exceed the Class Initial Investor Interest (after giving effect to any increase
therein pursuant to Section 32) for such Class minus the sum of (x) the aggregate amount of
payments of Certificate Principal paid to the Investor Certificateholders of such Class prior to
such Distribution Date, (y) in the case of the Class Investor Interest, the amount on deposit in
the Series Principal Funding Account for the benefit of such Class in respect of Certificate
Principal and (z) the aggregate amount of losses, if any, on investments of principal of funds on
deposit in the Series Principal Funding Account for the benefit of such Class; and provided,
further, that the amount of Investor Losses with respect to any Class shall not be reduced to an
amount less than zero.



     SECTION 14. Servicing Compensation. As compensation for its servicing activities hereunder
and under the Pooling and Servicing Agreement and reimbursement of its expenses as set forth in
Section 3.03 of the Pooling and Servicing Agreement, the Master Servicer shall be entitled to
receive a monthly servicing fee with respect to the Series established hereby in respect of any Due
Period (or portion thereof) prior to the earlier of the date on which the Series Investor Interest
is reduced to zero and the Series Termination Date. Such monthly servicing fees shall be composed
of the Class Monthly Servicing Fees and the Supplemental Servicing Fees, if any. The Class Monthly
Servicing Fees shall be paid to the Master Servicer on behalf of each Class on each Distribution
Date pursuant to Section 10. The Supplemental Servicing Fee, if any, shall be paid to the Master
Servicer on or before each Distribution Date from the Series Additional Funds for such Distribution
Date. In no event shall the Trustee or the Investor Certificateholders be liable for the
Supplemental Servicing Fee.



     SECTION 15. Class Interest Rate Caps.



     (a) In the event that the Master Servicer has obtained a Class Interest Rate Cap in favor of
the Trustee for the benefit of a Class or Subclass that does not have a fixed or maximum



57









 







Certificate Rate, the Master Servicer hereby represents that such Class Interest Rate Cap
provides that (i) the Trust shall not be required to make any payments thereunder and (ii) the
Trust shall be entitled to receive payments (determined in accordance with the Class Interest Rate
Cap) from the Interest Rate Cap Provider on an Interest Payment Date if LIBOR or the Commercial
Paper Rate, as applicable, for the related Calculation Period exceeds the Class Cap Rate for the
applicable Class or Subclass. Any Class Interest Rate Cap Payment shall be deposited into the
Series Interest Funding Account.



     (b) In the event that the commercial paper or certificate of deposit rating of the Interest
Rate Cap Provider is withdrawn or reduced below the ratings specified in the Series Term Sheet (or,
in either case, such lower rating as the applicable Rating Agency shall allow), then within 30 days
after receiving notice of such decline in the creditworthiness of the Interest Rate Cap Provider as
determined by either Rating Agency, either (x) the Interest Rate Cap Provider, with the prior
confirmation of the Rating Agencies that such arrangement will not result in the reduction or
withdrawal of the rating of any Investor Certificates of the Series established hereby, will enter
into an arrangement the purpose of which shall be to assure performance by the Interest Rate Cap
Provider of its obligations under the Class Interest Rate Caps; or (y) the Master Servicer shall at
its option either (i) with the prior confirmation of the Rating Agencies that such action will not
result in a reduction or withdrawal of the rating of any Investor Certificates of the Series
established hereby, cause the Interest Rate Cap Provider to pledge securities in the manner
provided by applicable law, which shall be held by the Trustee or its agent free and clear of the
Lien of any third party, in a manner conferring on the Trustee a perfected first Lien in such
securities securing the Interest Rate Cap Provider’s performance of its obligations under the Class
Interest Rate Caps, or (ii) provided that Replacement Class Interest Rate Caps or Qualified
Substitute Cap Arrangements meeting the requirements of Section 15(c) have been obtained, direct
the Trustee (A) to provide written notice to the Interest Rate Cap Provider of its intention to
terminate the Class Interest Rate Caps within such 30-day period and (B) to terminate the Class
Interest Rate Caps within such 30-day period, to request the payment to it of all amounts due to
the Trust under the Class Interest Rate Caps through the termination date and to deposit any such
amounts so received, on the day of receipt, to the Series Interest Funding Account, or (iii)
establish any other arrangement (including an arrangement or arrangements in addition to or in
substitution for any prior arrangement made in accordance with the provisions of this Section
15(b)) satisfactory to the Rating Agencies such that the Rating Agencies will not reduce or
withdraw the rating of any Investor Certificates of the Series established hereby (a “Qualified
Substitute Cap Arrangement”); provided, however, that in the event at any time any alternative
arrangement established pursuant to clause (x) or (y)(i) or (y)(iii) above shall cease to be
satisfactory to the Rating Agencies then the provisions of this Section 15(b) shall again be
applied and in connection therewith the 30-day period referred to above shall commence on the date
the Master Servicer receives notice of such cessation.



     (c) Unless an alternative arrangement pursuant to clause (x) or (y)(i) of Section 15(b) is
being established, the Master Servicer shall use its best efforts to obtain Replacement Class
Interest Rate Caps or Qualified Substitute Cap Arrangements meeting the requirements of this
Section 15(c) during the 30-day period referred to in Section 15(b). The Trustee shall not
terminate the Class Interest Rate Caps unless, prior to the expiration of the 30-day period
referred to in Section 15(b), the Master Servicer delivers to the Trustee (i) Replacement Class



58









 







Interest Rate Caps or Qualified Substitute Cap Arrangements, (ii) to the extent applicable, an
Opinion of Counsel as to the due authorization, execution and delivery and validity and
enforceability of each such Replacement Class Interest Rate Cap or Qualified Substitute Cap
Arrangement, as the case may be, and (iii) confirmation from each Rating Agency that the
termination of the Class Interest Rate Caps and their replacement with such Replacement Class
Interest Rate Caps or Qualified Substitute Cap Arrangements will not adversely affect its rating of
the Investor Certificates of the Series established hereby.



     (d) Master Servicer shall notify the Trustee, the Rating Agencies and the Credit Enhancement
Provider within five Business Days after obtaining knowledge that the commercial paper or
certificate of deposit rating of the Interest Rate Cap Provider has been withdrawn or reduced by
either Rating Agency.



     (e) Notwithstanding the foregoing, the Master Servicer may at any time obtain Replacement
Class Interest Rate Caps, provided that the Master Servicer delivers to the Trustee (i) an Opinion
of Counsel as to the due authorization, execution and delivery and validity and enforceability of
such Replacement Class Interest Rate Caps and (ii) confirmation from the Rating Agencies that the
termination of the then current Class Interest Rate Caps and their replacement with such
Replacement Class Interest Rate Caps will not adversely affect the rating of the Investor
Certificates of the Series established hereby.



     (f) The Trustee hereby appoints the Master Servicer to perform the duties of the calculation
agent under the Class Interest Rate Caps and the Master Servicer accepts such appointment.



     SECTION 16. Class Interest Rate Swaps. In the event that the Investor Certificates of any
Class are subject to a Class Interest Rate Swap, the Trust will enter into a Class Interest Rate
Swap in a form approved by the Master Servicer. Pursuant to the terms of the Class Interest Rate
Swap, the Interest Rate Swap Counterparty shall pay to the Trust the Net Swap Receipt or the Trust
shall pay to the Interest Rate Swap Counterparty the Net Swap Payment, as applicable. If the Trust
does not receive payment from the Interest Rate Swap Counterparty on each Interest Payment Date (if
due), the Trustee, on behalf of the Trust, shall attempt to determine from the Interest Rate Swap
Counterparty the reasons therefore and whether such payment is to be made by the Interest Rate Swap
Counterparty on such Interest Payment Date. If the Class Interest Rate Swap has not been
terminated and the Trust has not received any payment due from the Interest Rate Swap Counterparty
on the related Interest Payment Date, the Trustee shall notify the Master Servicer of such fact
prior to 1:00 p.m. Chicago time on such Interest Payment Date.



     SECTION 17. Investor Certificateholders’ Monthly Statement. On each Statement Date, a
statement substantially in the form of Exhibit B and each as prepared by the Trustee (based on
information provided by the Master Servicer) setting forth the information listed thereon shall be
available from the Trustee, each Paying Agent and, if applicable, the Listing Agent.



     SECTION 18. Master Servicer’s Monthly Certificate. On or before the second Business Day
preceding each Statement Date, the Master Servicer shall forward to Discover Bank on behalf of the
Holder of the Seller Certificate, the Trustee and each Paying Agent a certificate of a



59









 







Servicing Officer substantially in the form of Exhibit C and each setting forth the
information listed thereon.



     SECTION 19. Notices. Any notices to holders of Investor Certificates issued in bearer form
shall be given as described in the Series Term Sheet.



     SECTION 20. Additional Amortization Events. If any one of the following events shall occur:



     (a) after giving effect to payments and distributions on the Class Expected Final Payment Date
or the Class Final Maturity Date, as applicable, with respect to any Class, the Class Invested
Amount for such Class is not reduced to zero;



     (b) if applicable, following either (i) the withdrawal or reduction of the commercial paper or
certificate of deposit rating of any Interest Rate Cap Provider to below the ratings specified in
the Series Term Sheet (or, in either case, such lower rating as the applicable Rating Agency has
allowed) or (ii) notice from either Rating Agency that any Qualified Substitute Cap Arrangement or
any other arrangement established pursuant to Section 15 is no longer satisfactory to such Rating
Agency, the Master Servicer shall fail, within the applicable time period specified in Section 15,
to (x) obtain Replacement Class Interest Rate Caps or Qualified Substitute Cap Arrangements or (y)
cause the Interest Rate Cap Provider to pledge securities as collateral securing the obligations of
the Interest Rate Cap Provider or establish any other arrangement as provided in Section 15, in
each case in a manner satisfactory to the Trustee and the Rating Agencies (such that neither Rating
Agency will reduce or withdraw the ratings of the Investor Certificates of the Series established
hereby); or



     (c) if the amount of Principal Receivables in the Trust at the end of any Due Period for three
consecutive Due Periods of the Early Accumulation Period shall be less than the Minimum Principal
Receivables Balance and Discover Bank shall have failed to assign Receivables in Additional
Accounts or Participation Interests to the Trust in at least the amount of the deficiency by the
tenth day of the calendar month of the following Due Period;



an Amortization Event shall occur with respect to the Investor Certificates of the Series
established hereby, immediately upon the occurrence of such event. If an Amortization Event
described in this Section 20 shall occur, this Section 20 constitutes written notice by the Trustee
and not less than 51% of the Class Invested Amount of each Class of the Series established hereby
to the Master Servicer and the Sellers that such Amortization Event has occurred. No additional
notice of any kind, which is hereby waived by the Sellers and the Master Servicer, shall be
required as a condition of the occurrence of any Amortization Event described in this Section 20.
In addition, the events set forth in Section 21 shall constitute either Early Accumulation Events
or additional Amortization Events with respect to the Series established hereby.



     SECTION 21. Early Accumulation Events; Additional Amortization Events. If the Series
established hereby is eligible to have an Early Accumulation Period, each of the events described
in clause (a), (b), (g), (i) or (j) of Section 9.01 of the Pooling and Servicing Agreement



60









 







shall not be Amortization Events but shall instead be Early Accumulation Events. In addition,
for purposes of this Series Supplement, each of the following events shall be (i) Early
Accumulation Events, if the Series established hereby is eligible to have an Early Accumulation
Period, or (ii) Amortization Events, if the Series established hereby is not eligible to have an
Early Accumulation Period:



     (a) on any Distribution Date, the three month rolling average Series Excess Spread is less
than the Series Buffer Amount, the three month rolling average Group Excess Spread is less than the
Group Buffer Amount and for so long as any Series that is not an Interchange Series is outstanding,
the three month rolling average Interchange Subgroup Excess Spread is less than the Interchange
Subgroup Buffer Amount;



     (b) if a Supplemental Credit Enhancement Event shall have occurred and Discover Bank as
Servicer shall have failed to arrange for the Supplemental Credit Enhancement in accordance with
the requirements of Section 11(c) hereof (including, without limitation, receipt of the
confirmation from Standard & Poor’s required thereby).



If any event described in clause (a), (b), (g), (i) or (j) of Section 9.01 of the Pooling and
Servicing Agreement occurs, an Early Accumulation Event shall occur with respect to the Investor
Certificates of such Class only if the event has a material adverse effect on the Investor
Certificateholders of such Class and if, after the applicable grace period described in those
clauses, either the Trustee declares or the Investor Certificateholders of such Class evidencing
Fractional Undivided Interests aggregating not less than 51% of the Class Invested Amount for
either Class declare by written notice to Discover Bank and the Master Servicer (and to the Trustee
if given by the Investor Certificateholders) that an Early Accumulation Event has occurred as of
the date of the notice. In the case of any event described in clause (a) or (b) of this Section
21, an Early Accumulation Event shall occur with respect to the Investor Certificates of such Class
immediately upon the occurrence of the event without any notice or other action on the part of the
Trustee or the Investor Certificateholders of such Class. On the date on which an Early
Accumulation Event is deemed to have occurred the Early Accumulation Period will commence.



     SECTION 22. Purchase of Investor Certificates and Series Termination.



     (a) If as of any Distribution Date during the Amortization Period (after giving effect to any
payments calculated pursuant to Section 9 made on such Distribution Date) the Series Investor
Interest of the Series established hereby is less than or equal to 5% of the Series Initial
Investor Interest, Discover Bank on behalf of the Holder of the Seller Certificate may purchase and
cancel the Investor Certificates of the Series established hereby by depositing into the Series
Distribution Account, on the immediately succeeding Distribution Date, an amount equal to the
Series Investor Interest as of the last day of the Due Period related to such immediately
succeeding Distribution Date. The Master Servicer shall direct the Trustee in writing to withdraw
the amount allocable to such Class from the Series Distribution Account and pay such amount to the
Investor Certificateholders of such Class pursuant to Section 12.02 of the Pooling and Servicing
Agreement. All Investor Certificates of the Series established hereby that are purchased by
Discover Bank on behalf of the Holder of the Seller Certificate pursuant to this



61









 







Section 22(a) shall be delivered by Discover Bank on behalf of the Holder of the Seller
Certificate upon such purchase to, and be cancelled by, the Transfer Agent and be disposed of in a
manner satisfactory to the Trustee and Discover Bank on behalf of the Holder of the Seller
Certificate.



     (b) If as of any Distribution Date during the Accumulation Period, the Early Accumulation
Period or the Controlled Liquidation Period, as applicable (after giving effect to any payments
calculated pursuant to Section 9 made on such Distribution Date), the Series Investor Interest of
the Series established hereby is less than or equal to 5% of the Series Initial Investor Interest
(before giving effect to any reduction in the Series Initial Investor Interest pursuant to Section
6.14 of the Pooling and Servicing Agreement), Discover Bank on behalf of the Holder of the Seller
Certificate may, but shall not be obligated to, purchase the Investor Certificates of the Series
established hereby by depositing into the Series Principal Funding Account, on such Distribution
Date, an amount equal to such Series Investor Interest. After giving effect to such deposit, such
Series Investor Interest shall be reduced to zero, and the Seller Interest shall be increased by
the amount of such deposit.



     (c) Following the sale of Receivables pursuant to Section 12.02 of the Pooling and Servicing
Agreement, the Master Servicer shall direct the Trustee in writing to withdraw the amount allocable
to each Class from the Series Distribution Account and pay such amount to the Investor
Certificateholders of such Class pursuant to Section 12.02 of the Pooling and Servicing Agreement.



     SECTION 23. Variable Accumulation Period. If the Series Term Sheet for the Series established
hereby so provides, the Master Servicer may elect, by written notice to the Trustee, Discover Bank
on behalf of the Holder of the Seller Certificate and the Credit Enhancement Provider, to delay the
commencement of the Accumulation Period, and extend the length of the Revolving Period, subject to
the conditions set forth in this Section 23; provided, however, that the Accumulation Period shall
commence no later than the first day of the Due Period related to the Class A Expected Final
Payment Date. Any such election by the Master Servicer shall be made no later than the first day
of the last scheduled Due Period of the Revolving Period (including any prior extension of the
Revolving Period pursuant to this Section 23).



     The Master Servicer may make such election only if the following conditions are satisfied:
(i) the Master Servicer shall have delivered to the Trustee a certificate to the effect that the
Master Servicer reasonably believes that the delay in the commencement of the Accumulation Period
would not result in the Class Invested Amount with respect to any Class of the Series established
hereby not being paid in full on the relevant Class Expected Final Payment Date; (ii) the Rating
Agencies shall have advised the Master Servicer and Discover Bank on behalf of the Holder of the
Seller Certificate that such election to delay the commencement of the Accumulation Period would
not cause the rating of any Class of any Series then outstanding to be lowered or withdrawn; and
(iii) the amount to be deposited in the Series Principal Funding Account in respect of the
Accumulation Amount shall have been adjusted.



     SECTION 24. Optional Accumulation Period Commencement. If the Series Term Sheet for the
Series established hereby so provides, unless the Amortization Period or the Early



62









 







Accumulation Period shall have commenced prior thereto, the Master Servicer may elect to
commence the Accumulation Period by delivering written notice to the Trustee, Discover Bank, on
behalf of the Holder of the Seller Certificate and the Credit Enhancement Provider at least 5
Business Days prior to the Accumulation Commencement Date subject to the conditions set forth in
this Section 24; provided, however, that the Accumulation Period shall commence no later than the
first day of the following Due Period. Such written notice shall set forth the Accumulation Amount
for each Distribution Date relating to the Accumulation Period.



     SECTION 25. Series Yield Factor. The Series Yield Factor for the Series established hereby
shall initially be the Series Yield Factor set forth in the Series Term Sheet. The Master Servicer
may change the Series Yield Factor upon 20 days prior written notice to the Trustee, Discover Bank
on behalf of the Holder of the Seller Certificate, the Credit Enhancement Provider and the Rating
Agencies, provided that the following conditions are satisfied: (i) the Series Yield Factor may
not be reduced below the initial Series Yield Factor or increased to more than a total of 0.05;
(ii) the Master Servicer shall have delivered to the Trustee a certificate to the effect that the
Master Servicer reasonably believes that the change in the Series Yield Factor would not (x) result
in any delay in the payment of principal to the Investor Certificateholders of any Series then
outstanding, or (y) cause an Amortization Event or an Early Accumulation Event to occur with
respect to any Series then outstanding; and (iii) Standard & Poor’s shall have advised the Master
Servicer and Discover Bank on behalf of the Holder of the Seller Certificate that such change in
the Series Yield Factor would not cause the rating of any Class of any Series then outstanding to
be lowered or withdrawn. Any such change shall be effective as of the first day of the Due Period
specified in the notice of the Master Servicer.



     SECTION 26. Ratification of Pooling and Servicing Agreement. As supplemented and amended by
this Series Supplement, the Pooling and Servicing Agreement is in all respects ratified and
confirmed and the Pooling and Servicing Agreement as so supplemented by this Series Supplement
shall be read, taken, and construed as one and the same instrument.



     SECTION 27. Counterparts. This Series Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.



     SECTION 28. Governing Law. This Series Supplement shall be construed in accordance with the
internal laws of the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder shall be determined in accordance
with such laws.



     SECTION 29. Intention of Parties. The parties intend the sale, transfer, assignment or
conveyance of Receivables, Interchange and all proceeds thereof in connection herewith to be a sale
of financial assets in connection with a securitization and an absolute transfer for all purposes
(other than for federal, state and local income and franchise tax purposes). The parties intend
the sale, transfer, assignment or conveyance of Receivables in connection herewith to be treated as
a sale for accounting purposes.



63









 





     SECTION 30. Amendment for Sale Accounting Purposes. If any Seller determines that (i) an
amendment to this Agreement or the Pooling and Servicing Agreement is necessary or desirable for
such Seller to maintain or establish sale accounting treatment under then-applicable financial
accounting standards, and (ii) such Seller cannot enter into such amendment pursuant to Section
13.01 of the Pooling and Servicing Agreement without obtaining the consent of a specified
percentage of Investor Certificateholders, then the Master Servicer, the Sellers, the Trustee and
the Servicers may nonetheless enter into such amendment without obtaining the consent of any
Certificateholder of any Investor Certificates of this Series so long as the Trustee shall have
been advised by the Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to any Class of any Series then outstanding.



     Any such amendment may include, without limitation, any changes necessary to convert the Trust
from a “one-tier” securitization structure to a “two-tier” securitization structure.
Notwithstanding the foregoing, any Investor Certificateholder that acquires an Investor Certificate
of this Series will be deemed to have consented to any such amendment for all purposes, including
for purposes of calculating whether the requisite consent percentage, if any, under Section 13.01
of the Pooling and Servicing Agreement has been received for any amendment that requires such
consent because of the lack of provisions comparable to this Section 30 in the Series Supplements
for other Series then outstanding (except that Investor Certificates beneficially owned by any
Seller or any affiliate or agent of any Seller will not be included in any such calculation).



     SECTION 31. Election Under Delaware Asset-Backed Securities Facilitation Act. Without
limiting any other provisions of the Pooling and Servicing Agreement or this Series Supplement, the
parties hereto agree that (a) the transactions contemplated hereby constitute a “securitization
transaction” and (b) to the fullest extent permitted under applicable law, including without
limitation, the Asset-Backed Securities Facilitation Act Delaware Code Ann. tit. 6, § 2703A et seq:
(1) all right, title and interest to the Receivables, whether now existing or hereafter acquired,
all monies due or to become due with respect thereto, all proceeds of such Receivables and all
Interchange (the “Transferred Assets”), which have been transferred to the Trust in connection with
the securitization transactions contemplated herein, shall be deemed to no longer be the property,
assets or rights of the Seller; (2) the Seller, its creditors or, in any insolvency proceeding with
respect to the Seller or the Seller’s property, a bankruptcy trustee, receiver, debtor, debtor in
possession or similar person, shall have no rights, legal or equitable, whatsoever to reacquire,
reclaim, recover, repudiate, disaffirm, redeem or recharacterize as property of the Seller any of
the Transferred Assets; and (3) in the event of a bankruptcy, receivership or other insolvency
proceeding with respect to the Seller or the Seller’s property, such Transferred Assets shall not
be deemed to be part of the Seller’s property, assets, rights or estate.



     SECTION 32. Issuance of Additional Certificates. The Sellers may direct the Trustee to
issue, at any time and from time to time when this Series is outstanding, additional Investor
Certificates of this Series to increase the Series Investor Interest, subject to the satisfaction
of the conditions described below:



64









 





     (a) The additional Investor Certificates shall increase the Class Invested Amounts of the
Class A Certificates and the Class B Certificates, if applicable, and all amounts related to the
Credit Enhancement for this Series proportionately from their initial levels.



     (b) The Sellers shall have notified the Trustee, in writing, at least three days in advance of
the date upon which the Series Investor Interest is to be increased, which notice shall state the
designation of the Series under which the additional Investor Certificates are to be issued and
shall include: (i) the amount of Investor Certificates being offered and the resulting Class
Initial Investor Interests and Series Initial Investor Interest; (ii) the date from which interest
on the additional Investor Certificates will accrue (which may be a date prior to the date of
issuance thereof); (iii) the first Interest Payment Date on which interest will be paid on such new
Investor Certificates; (iv) the Increased Credit Enhancement Amount and the Increased Issuance
Subordinated Amount for such increase; and (v) any other terms that the Sellers set forth in such
notice of such increase in the Series Investor Interest to clarify the rights of holders of such
new Investor Certificates or the effect of such new Investor Certificates on any calculations to be
made with respect to this Series, the Group of which this Series is a member, or the Trust. All
such terms shall be incorporated into and form a part of this Series Supplement on and after the
effective date of such increase in the Series Investor Interest. The notice shall also include a
revised Series Term Sheet that specifies the terms of this Series after giving effect to the
increase.



     (c) The Sellers shall have delivered to the Trustee written confirmation from the Rating
Agencies that they will not, as a result of the increase, change the rating of any class of any
series outstanding at the time of the increase and that they will rate the additional Investor
Certificates the same as those Investor Certificates currently outstanding in this Series.



     (d) Discover Bank as Servicer shall have arranged for the payment of an additional amount
related to the Credit Enhancement required to increase the amount on deposit in the Credit
Enhancement Account so that such amount, after giving effect to such increase and the issuance of
the additional Investor Certificates, represents the same percentage of the Series Investor
Interest that the original amount on deposit in the Credit Enhancement Account, plus any amounts
deposited in the Credit Enhancement Account as a result of a Supplemental Credit Enhancement Event
or an Effective Alternative Credit Support Election, represented of the original Series Investor
Interest (such additional amount, the “Increased Credit Enhancement Amount”). Such payment shall
be made by a Person other than Discover Bank to the Trustee as administrator of the Credit
Enhancement for application in accordance with the provisions of the Credit Enhancement Agreement.
Both the form and the provider of the Increased Credit Enhancement Amount shall be determined at
the time it is to be paid.



     (e) Discover Bank on behalf of the Holder of the Seller Certificate shall not be required to
designate Additional Accounts or convey Participation Interests to the Trust pursuant to Section
2.10(a) of the Pooling and Servicing Agreement as a result of the increase in Series Investor
Interest.



     (f) No Amortization Event shall have occurred for this Series.



65









 





     (g) No such additional Investor Certificates shall be issued with more than de minimis
original issue discount.



     Upon any increase in the Series Investor Interest, Discover Bank on behalf of the Holder of
the Seller Certificate shall execute and deliver to the Trustee, and the Trustee shall authenticate
and deliver, upon the order of Discover Bank on behalf of the Holder of the Seller Certificate, new
Investor Certificates in the amount of the increase, each of which shall bear, upon its face, the
designation for this Series.




66









 






EXHIBIT A-1




FORM OF CLASS A CERTIFICATE




[FORM OF THE FACE OF THE CLASS A CERTIFICATES]




     UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CLASS A CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



	 	 	 	 	 
	NO.

	 	$	 	 






CUSIP NO.                     




DISCOVER CARD MASTER TRUST I, SERIES 2005-1

FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATE




DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER



(NOT AN INTEREST IN OR OBLIGATION OF DISCOVER BANK AND NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.)




     This certifies that Cede & Co. (the “Class A Certificateholder”) is the registered owner of a
Fractional Undivided Interest in the Discover Card Master Trust I (the “Trust”), the corpus of
which consists of a portfolio of receivables (the “Receivables”) existing as of the Cut-Off Date
(or, with respect to Receivables in Additional Accounts, as of the applicable Additional Account
Cut-Off Date) or thereafter created under certain open end credit card accounts for specified
Persons (the “Accounts”) originated by Discover Bank, a Delaware banking corporation (“Discover
Bank”), or an affiliate of Discover Bank, and transferred to the Trust by Discover Bank or one or
more Additional Sellers, all monies due or to become due with respect thereto, all proceeds (as
defined in Section 9-102(a)(64) of the Uniform Commercial Code as in effect in the Applicable State
or any successor provision thereto) of such Receivables and interchange pursuant to an Amended and
Restated Pooling and Servicing Agreement, dated as of November 3, 2004 by and between U.S. Bank
National Association and Discover Bank as Master Servicer, Servicer and Seller (the “Pooling and
Servicing Agreement”), a summary of certain of the



A-1-1









 




pertinent provisions of which is set forth herein below, and benefits under any Credit
Enhancement with respect to any Series of investor certificates issued from time to time pursuant
to the Pooling and Servicing Agreement, to the extent applicable. Reference is hereby made to the
further provisions of this Class A Certificate set forth on the reverse hereof, and such further
provisions shall for all purposes have the same effect as if set forth at this place.




     This Class A Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or any amendment thereto, or the Series Supplement, dated as of January 18, 2005 (the
“Series Supplement”), by and between the Trustee and Discover Bank or any amendment thereto, or
become vested or obligatory for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under the Pooling and Servicing Agreement.



A-1-2









 





     IN WITNESS WHEREOF, Discover Bank has caused this Class A Certificate to be duly executed and
authenticated.


	 	 	 	 	 
	 	DISCOVER BANK

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 





A-1-3









 





[FORM OF THE REVERSE OF THE CLASS A CERTIFICATES]




     It is the intent of the Sellers and the Investor Certificateholders that, for federal, state
and local income and franchise tax purposes only, the Investor Certificates will be evidence of
indebtedness of the Sellers. The Sellers and the Class A Certificateholder, by the acceptance of
this Class A Certificate, agree to treat this Class A Certificate for federal, state and local
income and franchise tax purposes as indebtedness of the Sellers secured by the Receivables and
other assets held in the Trust.



     To the extent not defined herein, the capitalized terms used herein have the meanings assigned
in the Pooling and Servicing Agreement or the Series Supplement. This Class A Certificate is
issued under and is subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement and the Series Supplement, to which Pooling and Servicing Agreement and Series
Supplement, as each may be amended from time to time, the Class A Certificateholder by virtue of
the acceptance hereof assents and by which the Class A Certificateholder is bound.



     This Class A Certificate is one of a series of Certificates entitled “Discover Card Master
Trust I, Series 2005-1 Floating Rate Class A Credit Card Pass-Through Certificates” (the “Class A
Certificates”), each of which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the amounts specified in the
Pooling and Servicing Agreement and the Series Supplement to be deposited in the Investor Accounts
with respect to Discover Card Master Trust I, Series 2005-1 or paid to the Class A
Certificateholders. Also issued under the Pooling and Servicing Agreement and the Series
Supplement are Investor Certificates designated as “Discover Card Master Trust I, Series 2005-1
Floating Rate Class B Credit Card Pass-Through Certificates” (the “Class B Certificates”). The
Class A Certificates and the Class B Certificates are collectively referred to herein as the
Investor Certificates.



     The aggregate interest represented by the Class A Certificates at any time in the assets of
the Trust shall not exceed an amount equal to the Class A Investor Interest at such time, plus
accrued but unpaid Certificate Interest for the Class A Certificates and any interest thereon. The
Class Initial Investor Interest of the Class A Certificates is $1,500,000,000; plus the face amount
of any Class A Certificates issued in an increase of the Series Investor Interest pursuant to
Section 32 of the Series Supplement. The Class A Invested Amount on any Distribution Date will be
an amount equal to the Class A Initial Investor Interest minus the sum of (a) the aggregate amount
of payments of Certificate Principal paid to the Class A Certificateholders prior to such
Distribution Date, (b) the aggregate amount of Investor Losses for such Class not reimbursed prior
to such Distribution Date and (c) the aggregate amount of losses of principal on investments in
funds on deposit for the benefit of such Class in the Series Principal Funding Account. In
addition to the Investor Certificates, a Seller Certificate has been issued pursuant to the Pooling
and Servicing Agreement which represents, at any time, the undivided interest in the Trust not
represented by the Investor Certificates or the investor certificates of any other Series of
investor certificates then outstanding. Subject to the terms and conditions of the Pooling and
Servicing Agreement, the Sellers may from time to time direct the Trustee, on behalf of the Trust,
to issue one or more new Series of investor certificates, which will represent Fractional Undivided
Interests in the Trust.



A-1-4









 





     During the Revolving Period, which begins on the Series Cut-Off Date, and during the
Accumulation Period, Certificate Interest will be distributed on the 15th day of each calendar
month with respect to interest accrued during the preceding Interest Accrual Period, commencing in
February 2005, or if such 15th day is not a Business Day, on the next succeeding Business Day (an
“Interest Payment Date”), to the Class A Certificateholders of record as of the last day of the
month preceding the related Interest Payment Date. Principal on the Class A Certificates is
scheduled to be paid in a single payment on the Distribution Date in March 2008 (the “Class A
Expected Final Payment Date”), but may be paid sooner or later and in installments if an
Amortization Event occurs. During the Amortization Period, if any, Certificate Interest and
Certificate Principal collected by the Master Servicer will be distributed to the Class A
Certificateholders on the Distribution Date of each calendar month, commencing in the month
following the commencement of the Amortization Period. In any event, the final payment of
principal of either class will be made no later than the first Business Day following the
Distribution Date in September 2010 (the “Series Termination Date”).



     The amount to be distributed on each Principal Payment Date to the holder of this Class A
Certificate will be equal to the product of (a) the percentage equivalent of a fraction, the
numerator of which is the portion of the Class A Initial Investor Interest evidenced by this Class
A Certificate and the denominator of which is the Class A Initial Investor Interest and (b) the
aggregate of all payments to be made to the Class A Certificateholders on such Distribution Date.
Distributions with respect to this Class A Certificate will be made by the Paying Agent by check
mailed to the address of the Class A Certificateholder of record appearing in the Certificate
Register (except for the final distribution in respect of this Class A Certificate) without the
presentation or surrender of this Class A Certificate or the making of any notation thereon, except
that with respect to Class A Certificates registered in the name of Cede & Co., the nominee
registrant for The Depository Trust Company, distributions will be made in the form of immediately
available funds.



     This Class A Certificate does not represent an obligation of, or an interest in, the Master
Servicer. This Class A Certificate is limited in right of payment to certain Collections
respecting the Receivables and certain other assets of the Trust, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement and the Series Supplement.



     The Pooling and Servicing Agreement permits, with certain exceptions, the amendment and
modification of the rights and obligations of the Master Servicer, and the rights of Investor
Certificateholders under the Pooling and Servicing Agreement and Series Supplement, at any time by
the Master Servicer, the Sellers and the Trustee in certain cases (some of which require
confirmation from the Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to the Investor Certificates) without the consent of the Investor
Certificateholders, and in all other cases with the consent of the Investor Certificateholders
owning Fractional Undivided Interests aggregating not less than 66-2/3% of the Class Invested
Amount of each such affected Class (and with confirmation from the Rating Agencies that such
amendment will not result in the downgrading or withdrawal of the rating assigned to the Investor
Certificates); provided, however, that no such amendment shall (a) have a material adverse effect
on any Class of Investor Certificateholders by reducing in any manner the amount of, or delaying
the timing of, distributions which are required to be made on any Investor Certificate without the
consent of the affected Investor Certificateholders or (b) reduce



A-1-5









 




the aforesaid percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder of each affected Class then of record; and provided, further, that
the permitted activities of the Trust may be significantly changed only with the consent of the
Holders of Investor Certificates evidencing Fractional Undivided Interests aggregating not less
than 51% of the Aggregate Invested Amount. Any such amendment and any such consent by the Class A
Certificateholder, including the deemed consent described in the following sentence, shall be
conclusive and binding on such Class A Certificateholder and upon all future Holders of this Class
A Certificate and of any Class A Certificate issued in exchange hereof or in lieu hereof whether or
not notation thereof is made upon this Class A Certificate. The Class A Certificateholder, by
acceptance of this Class A Certificate, will be deemed to have consented for all purposes to any
amendment that any Seller determines is necessary or desirable for such Seller to maintain or
establish sale accounting treatment under then-applicable financial accounting standards.




     The transfer of this Class A Certificate shall be registered in the Certificate Register upon
surrender of this Investor Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar accompanied by a written instrument of transfer in a
form satisfactory to the Trustee and the Transfer Agent and Registrar duly executed by the Class A
Certificateholder or such Class A Certificateholder’s attorney duly authorized in writing, and
thereupon one or more new Class A Certificates of authorized denominations and for the same
aggregate Fractional Undivided Interest will be issued to the designated transferee or transferees.



     As provided in the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class A Certificates are exchangeable for new Class A Certificates evidencing like
aggregate Fractional Undivided Interests, as requested by the Class A Certificateholder
surrendering such Class A Certificates. No service charge may be imposed for any such exchange but
the Master Servicer or Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection therewith.



     The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent, and any agent of
any of them, may treat the person in whose name this Class A Certificate is registered as the owner
hereof for all purposes, and neither the Master Servicer, the Trust nor the Trustee, the Paying
Agent, the Transfer Agent, nor any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described in the Pooling and Servicing
Agreement.



     Subject to certain conditions in the Pooling and Servicing Agreement and the Series
Supplement, if the principal of the Investor Certificates has not been paid in full prior to the
Series Termination Date, the obligations created by the Pooling and Servicing Agreement and the
Series Supplement with respect to the Investor Certificates shall terminate on the Series
Termination Date.



A-1-6









 





[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]




     This is one of the Class A Certificates referred to in the within mentioned Pooling and
Servicing Agreement and Series Supplement.


	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 





A-1-7









 





EXHIBIT A-2




FORM OF CLASS B CERTIFICATE




[FORM OF THE FACE OF THE CLASS B CERTIFICATES]




     UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CLASS B CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



	 	 	 	 	 
	NO.

	 	$	 	 






CUSIP NO.                     




     THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AND TO THE
RIGHTS OF THE MASTER SERVICER AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT AND SERIES
SUPPLEMENT REFERRED TO HEREIN.



DISCOVER CARD MASTER TRUST I, SERIES 2005-1

FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATE




DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER



(NOT AN INTEREST IN OR OBLIGATION OF DISCOVER BANK AND NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.)




     THIS INVESTOR CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT
PLAN (AS DEFINED BELOW).



     This certifies that Cede & Co. (the “Class B Certificateholder”) is the registered owner of a
Fractional Undivided Interest in the Discover Card Master Trust I (the “Trust”), the corpus of
which consists of a portfolio of receivables (the “Receivables”) existing as of the Cut-Off Date
(or, with respect to Receivables in Additional Accounts, as of the applicable Additional Account
Cut-Off Date) or thereafter created under certain open end credit card accounts for specified
Persons (the “Accounts”) originated by Discover Bank, a Delaware banking corporation (“Discover
Bank”), or an affiliate of Discover Bank, and transferred to the Trust by Discover



A-2-1









 




Bank or one or more Additional Sellers, all monies due or to become due with respect
thereto, all proceeds (as defined in Section 9-102(a)(64) of the Uniform Commercial Code as in effect in
the Applicable State or any successor provision thereto) of such Receivables and interchange
pursuant to an Amended and Restated Pooling and Servicing Agreement, dated as of November 3, 2004,
by and between U.S. Bank National Association as Trustee (the “Trustee”) and Discover Bank as
Master Servicer, Servicer and Seller (the “Pooling and Servicing Agreement”), a summary of certain
of the pertinent provisions of which is set forth herein below, and benefits under any Credit
Enhancement with respect to any Series of investor certificates issued from time to time pursuant
to the Pooling and Servicing Agreement, to the extent applicable. Reference is hereby made to the
further provisions of this Class B Certificate set forth on the reverse hereof, and such further
provisions shall for all purposes have the same effect as if set forth at this place.




     This Class B Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement or any amendment thereto, or the Series Supplement, dated as of January 18, 2005 (the
“Series Supplement”), by and between the Trustee and Discover Bank or any amendment thereto, or
become vested or obligatory for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under the Pooling and Servicing Agreement.



A-2-2









 





     IN WITNESS WHEREOF, Discover Bank has caused this Class B Certificate to be duly executed and
authenticated.


	 	 	 	 	 
	 	DISCOVER BANK

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 





A-2-3









 





[FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]




     It is the intent of the Sellers and the Investor Certificateholders that, for federal, state
and local income and franchise tax purposes only, the Investor Certificates will be evidence of
indebtedness of the Sellers. The Sellers and the Class B Certificateholder, by the acceptance of
this Class B Certificate, agree to treat this Class B Certificate for federal, state and local
income and franchise tax purposes as indebtedness of the Sellers secured by the Receivables and
other assets held in the Trust.



     To the extent not defined herein, the capitalized terms used herein have the meanings assigned
in the Pooling and Servicing Agreement or the Series Supplement. This Class B Certificate is
issued under and is subject to the terms, provisions and conditions of the Pooling and Servicing
Agreement and the Series Supplement, to which Pooling and Servicing Agreement and Series
Supplement, as each may be amended from time to time, the Class B Certificateholder by virtue of
the acceptance hereof assents and by which the Class B Certificateholder is bound.



     This Class B Certificate is one of a class of Certificates entitled “Discover Card Master
Trust I, Series 2005-1 Floating Rate Class B Credit Card Pass-Through Certificates” (the “Class B
Certificates”), each of which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the amounts specified in the
Pooling and Servicing Agreement and the Series Supplement to be deposited in the Investor Accounts
with respect to Discover Card Master Trust I, Series 2005-1 or paid to the Class B
Certificateholders. Also issued under the Pooling and Servicing Agreement and the Series
Supplement are Investor Certificates designated as “Discover Card Master Trust I, Series 2005-1
Floating Rate Class A Credit Card Pass-Through Certificates” (the “Class A Certificates”). The
Class A Certificates and the Class B Certificates are collectively referred to herein as the
Investor Certificates.



     The aggregate interest represented by the Class B Certificates at any time in the assets of
the Trust shall not exceed an amount equal to the Class Investor Interest of the Class B
Certificates at such time, plus accrued but unpaid Certificate Interest for the Class B
Certificates and any interest thereon. The Class B Certificateholders are also entitled to the
benefit of the Credit Enhancement, to the extent provided in the Series Supplement. The Class
Initial Investor Interest of the Class B Certificates is $78,948,000; plus the face amount of any
Class B Certificates issued in an increase of the Series Investor Interest pursuant to Section 32
of the Series Supplement. The Class B Invested Amount on any Distribution Date will be an amount
equal to the Class B Initial Investor Interest minus the sum of (a) the aggregate amount of
payments of Certificate Principal paid to the Class B Certificateholders prior to such Distribution
Date, (b) the aggregate amount of Investor Losses for such Class not reimbursed prior to such
Distribution Date and (c) the aggregate amount of losses of principal on investments in funds on
deposit for the benefit of such Class in the Series Principal Funding Account. In addition to the
Investor Certificates, a Seller Certificate has been issued pursuant to the Pooling and Servicing
Agreement which represents, at any time, the undivided interest in the Trust not represented by the
Investor Certificates or the investor certificates of any other Series of investor certificates
then outstanding. Subject to the terms and conditions of the Pooling and Servicing Agreement, the
Sellers may from time to time direct the Trustee, on behalf of the Trust, to issue one or more
new Series of investor certificates, which will represent Fractional Undivided Interests in
the Trust.



A-2-4









 





     During the Revolving Period, which begins on the Series Cut-Off Date, and during the
Accumulation Period, Certificate Interest will be distributed on the 15th day of each calendar
month with respect to interest accrued during the preceding Interest Accrual Period, commencing in
February 2005, or if such 15th day is not a Business Day, on the next succeeding Business Day
(each, an “Interest Payment Date”), to the Class B Certificateholders of record as of the last day
of the month preceding the related Interest Payment Date. Principal on the Class B Certificates is
scheduled to be paid in a single payment on the Distribution Date in April 2008 (the “Class B
Expected Final Payment Date”), but may be paid sooner or later or in installments under certain
circumstances. During the Amortization Period, if any, Certificate Interest and Certificate
Principal collected by the Master Servicer will be distributed to the Class B Certificateholders on
the Distribution Date of each calendar month, commencing in the month following the commencement of
the Amortization Period; provided, however, that no Certificate Principal will be distributed to
the Class B Certificateholders until the Class A Investor Interest has been reduced to zero. The
rights of the Class B Certificateholders to receive the distributions to which they would otherwise
be entitled on the Receivables will be subordinated to the rights of the Class A Certificateholders
and the Master Servicer to the extent described in the Pooling and Servicing Agreement and Series
Supplement. In any event, the final payment of principal of either Class will be made no later
than the first Business Day following the Distribution Date in September 2010 (the “Series
Termination Date”).



     The amount to be distributed on each Distribution Date to the holder of this Class B
Certificate will be equal to the product of (a) the percentage equivalent of a fraction, the
numerator of which is the portion of the Class B Initial Investor Interest evidenced by this Class
B Certificate and the denominator of which is the Class B Initial Investor Interest and (b) the
aggregate of all payments to be made to the Class B Certificateholders on such Distribution Date.
Distributions with respect to this Class B Certificate will be made by the Paying Agent by check
mailed to the address of the Class B Certificateholder of record appearing in the Certificate
Register (except for the final distribution in respect of this Class B Certificate) without the
presentation or surrender of this Class B Certificate or the making of any notation thereon, except
that with respect to Class B Certificates registered in the name of Cede & Co., the nominee
registrant for The Depository Trust Company, distributions will be made in the form of immediately
available funds.



     This Class B Certificate does not represent an obligation of, or an interest in, the Master
Servicer. This Class B Certificate is limited in right of payment to certain Collections
respecting the Receivables and certain other assets of the Trust, all as more specifically set
forth hereinabove and in the Pooling and Servicing Agreement and the Series Supplement.



     The Pooling and Servicing Agreement permits, with certain exceptions, the amendment and
modification of the rights and obligations of the Master Servicer, and the rights of Investor
Certificateholders under the Pooling and Servicing Agreement and Series Supplement, at any time by
the Master Servicer, the Sellers and the Trustee in certain cases (some of which require
confirmation from the Rating Agencies that such amendment will not result in the downgrading



A-2-5









 




or withdrawal of the rating assigned to the Investor Certificates) without the consent of the
Investor Certificateholders, and in all other cases with the consent of the Investor
Certificateholders owning Fractional Undivided Interests aggregating not less than 66-2/3% of the
Class Invested Amount of each such affected Class (and with confirmation from the Rating Agencies
that such amendment will not result in the downgrading or withdrawal of the rating assigned to the
Investor Certificates); provided, however, that no such amendment shall (a) have a material adverse
effect on any Class of Investor Certificateholders by reducing in any manner the amount of, or
delaying the timing of, distributions which are required to be made on any Investor Certificate
without the consent of the affected Investor Certificateholders or (b) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of each Investor
Certificateholder of each affected Class then of record; and, provided, further, that the permitted
activities of the Trust may be significantly changed only with the consent of the Holders of
Investor Certificates evidencing Fractional Undivided Interests aggregating not less than 51% of
the Aggregate Invested Amount. Any such amendment and any such consent by the Class B
Certificateholder, including the deemed consent described in the following sentence, shall be
conclusive and binding on such Class B Certificateholder and upon all future Holders of this Class
B Certificate and of any Class B Certificate issued in exchange hereof or in lieu hereof whether or
not notation thereof is made upon this Class B Certificate. The Class B Certificateholder, by
acceptance of this Class B Certificate, will be deemed to have consented for all purposes to any
amendment that any Seller determines is necessary or desirable for such Seller to maintain or
establish sale accounting treatment under then-applicable financial accounting standards.




     The transfer of this Class B Certificate shall be registered in the Certificate Register upon
surrender of this Investor Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar accompanied by a written instrument of transfer in a
form satisfactory to the Trustee and the Transfer Agent and Registrar duly executed by the Class B
Certificateholder or such Class B Certificateholder’s attorney duly authorized in writing, and
thereupon one or more new Class B Certificates of authorized denominations and for the same
aggregate Fractional Undivided Interest will be issued to the designated transferee or transferees.



     The transfer of this Investor Certificate is subject to certain restrictions set forth in the
Pooling and Servicing Agreement. In no event shall this Investor Certificate, or any interest
therein, be transferred to an employee benefit plan, trust or account subject to the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), or described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”), and not excepted under Section 4975(g).
Any Holder of this Investor Certificate, by its acceptance hereof, shall be deemed to represent
and warrant that it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA), that
is subject to Title I of ERISA, (ii) a plan described in Section 4975(e)(l) of the Code, and not
excepted under Section 4975(g), or (iii) an entity using assets to purchase such Certificates which
constitute plan assets by reason of a plan’s investment in such Holder.



     As provided in the Pooling and Servicing Agreement and subject to certain limitations therein
set forth, Class B Certificates are exchangeable for new Class B Certificates evidencing like
aggregate Fractional Undivided Interests, as requested by the Class B Certificateholder



A-2-6









 




surrendering such Class B Certificates. No service charge may be imposed for any such exchange but
the Master Servicer or Transfer Agent and Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection
therewith.




     The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent, and any agent of
any of them, may treat the person in whose name this Class B Certificate is registered as the owner
hereof for all purposes, and neither the Master Servicer, the Trust nor the Trustee, the Paying
Agent, the Transfer Agent, nor any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described in the Pooling and Servicing
Agreement.



     Subject to certain conditions in the Pooling and Servicing Agreement and the Series
Supplement, if the principal of the Investor Certificates has not been paid in full prior to the
Series Termination Date, the obligations created by the Pooling and Servicing Agreement and the
Series Supplement with respect to the Investor Certificates shall terminate on the Series
Termination Date.



A-2-7









 





[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]




     This is one of the Class B Certificates referred to in the within mentioned Pooling and
Servicing Agreement and Series Supplement.


	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 





A-2-8









 





Exhibit B




Form of Investor Certificateholders’ Monthly Statement




Discover Card Master Trust I




Series 2005-1 Monthly Statement




	 	 	 
	Distribution Date:                          ,           

	 	Month Ending:                          ,           





Pursuant to the Series Supplement dated as of January 18, 2005 relating to the
Amended and Restated Pooling and Servicing Agreement dated as of November 3, 2004 by and between
Discover Bank and U.S. Bank National Association as Trustee, the Trustee is required to prepare
certain information each month regarding current distributions to investors and the performance of
the Trust. We have set forth below this information for the Distribution Date listed above, as
well as for the calendar month ended on the date listed above.





	1.  	Payments to investors in Series 2005-1 on this Distribution Date (per $1,000 of Class Initial Investor Interest)




	 	 	 	 	 	 	 
	 	 	Total	 	Interest	 	Principal
	Series 2005-1
	 	 	 	 	 	 
	Class A

	 	$                    
	 	$                    
	 	$                    
	Class B

	 	$                    
	 	$                    
	 	$                    







	2.  	Principal Receivables at the end of [Month][Year]




	 	 	 	 	 
	(a)

	 	Aggregate Investor Interest
	 	$                    
	

	 	Seller Interest
	 	$                    
	

	 	TOTAL MASTER TRUST
	 	$                    
	(b)

	 	Group One Investor Interest
	 	$                    
	(c)

	 	Group One Investor Interest for Interchange Series
	 	$                    
	(d)

	 	Series 2005-1 Investor Interest
	 	$                    
	(e)

	 	Class A Investor Interest
	 	$                    
	

	 	Class B Investor Interest
	 	$                    







	3.  	Allocation of Receivables and other amounts collected during [Month][Year]




	 	 	 	 	 	 	 	 	 
	 	 	 	 	Finance Charge	 	Principal	 	Interchange
	 	 	 	 	Collections	 	Collections	 	 
	(a)

	 	Allocation of Collections between
Investors and Seller	 	 	 	 	 	 
	

	 	Aggregate Investor Allocation
	 	$                    
	 	$                    
	 	$                    
	

	 	Seller Allocation
	 	$                    
	 	$                    
	 	$                    
	(b)

	 	Group One Allocation
	 	$                    
	 	$                    
	 	$                    
	(c)

	 	Series 2005-1 Allocations
	 	$                    
	 	$                    
	 	$                    
	(d)

	 	Class A Allocations
	 	$                    
	 	$                    
	 	$                    
	

	 	Class B Allocations
	 	$                    
	 	$                    
	 	$                    






B-1









 





	 	 	 	 	 
	(e)

	 	Principal Collections as a monthly percentage of Master Trust Receivables
at the beginning of [Month][Year]
	 	                    %
	 
	 	 	 	 
	(f)

	 	Finance Charge Collections as a monthly percentage of Master Trust Receivables
at the beginning of [Month][Year]
	 	                    %
	 
	 	 	 	 
	(g)

	 	Total Collections as a monthly percentage of Master Trust Receivables
at the beginning of [Month][Year]
	 	                    %
	 
	 	 	 	 
	(h)

	 	Interchange as a monthly percentage of Master Trust Receivables
at the beginning of the [Month][Year]
	 	                    %
	 
	 	 	 	 
	(i)

	 	Total Collections and Interchange as a monthly percentage of Master Trust Receivables
at the beginning of [Month][Year]
	 	                    %







	4.  	Information concerning the Series Principal Funding Account (“SPFA”)




	 	 	 	 	 	 	 	 	 
	 	 	Deposits into the SPFA on	 	Deficit Amount on	 	 	 	 
	 	 	this Distribution Date	 	this Distribution Date	 	SPFA Balance	 	Investment Income
	 
	 	 	 	 	 	 	 	 
	Series 2005-1
	 	$                    	 	$                    	 	$                    	 	$                    







	5.  	Information concerning amount of Controlled Liquidation Payments




	 	 	 	 	 	 	 
	 	 	Amount paid on this	 	Deficit Amount on this	 	Total Payments through this
	 	 	Distribution Date	 	Distribution Date	 	Distribution Date
	 
	 	 	 	 	 	 
	Series 2005-1
	 	$                    	 	$                    	 	$                    







	6.  	Information concerning the Series Interest Funding Accounts (“SIFA”)




	 	 	 	 	 
	 	 	Deposits into the SIFA	 	 
	 	 	on this Distribution Date	 	SIFA Balance
	 	 	 	 	 
	Series 2005-1
	 	$                    	 	$                    







	7.  	Investor Charged-Off Amount




	 	 	 	 	 	 	 
	 	 	 	 	[Month][Year]	 	Cumulative Investor
	 	 	 	 	 	 	Charged-Off Amount
	 	 	 	 	 	 	 
	(a)

	 	Group One
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Series 2005-1
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	Class A
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	Class B
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(d)

	 	As an annualized percentage of
Principal Receivables at the
beginning of [Month][Year]
	 	                    %
	 	N/A







	8.  	Investor Losses for [Month][Year]




	 	 	 	 	 	 	 
	 	 	 	 	Total	 	per $1,000 of initial
	 	 	 	 	 	 	Investor Interest
	 
	 	 	 	 	 	 
	(a)

	 	Group One
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Series 2005-1
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	Class A
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	

	 	Class B
	 	$                    
	 	$                    






B-2









 






	9.  	Reimbursement of Investor Losses for [Month][Year]




	 	 	 	 	 	 	 
	 	 	 	 	Total	 	per $1,000 of initial
	 	 	 	 	 	 	Investor Interest
	 
	 	 	 	 	 	 
	(a)

	 	Group One
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Series 2005-1
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	Class A
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	Class B
	 	$                    
	 	$                    







	10.  	Aggregate amount of Unreimbursed Investor Losses for [Month][Year]




	 	 	 	 	 	 	 
	 	 	 	 	Total	 	per $1,000 of initial
	 	 	 	 	 	 	Investor Interest
	 
	 	 	 	 	 	 
	(a)

	 	Group One
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Series 2005-1
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	Class A
	 	$                    
	 	$                    
	 
	 	 	 	 	 	 
	

	 	Class B
	 	$                    
	 	$                    







	11.  	Investor Monthly Servicing Fee payable on this Distribution Date




	 	 	 	 	 
	(a)

	 	Group One
	 	$                    
	 
	 	 	 	 
	(b)

	 	Series 2005-1
	 	$                    
	 
	 	 	 	 
	(c)

	 	Class A
	 	$                    
	 
	 	 
	 

	 	Class B
	 	$                    







	12.  	Class Available Subordinated Amount at the end of the Distribution Date




	 	 	 	 	 
	 	 	 	 	as a percentage of
	 	 	Total	 	Class A Invested Amount
	 	 	 	 	 
	Series 2005-1 Class B

	 	$                    
	 	                     %







	13.  	Total Available Credit Enhancement Amounts




	 	 	 	 	 	 	 
	 	 	 	 	Shared Amount	 	Class B Amount
	 	 	 	 	 	 	 
	(a)

	 	Maximum Amount on this Distribution Date
	 	N/A
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Available Amount on this Distribution Date
	 	N/A
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	Amount of Unreimbursed drawings on Credit
Enhancement on this Distribution Date
	 	N/A
	 	$                    
	 
	 	 	 	 	 	 
	(d)

	 	Credit Enhancement Fee on this

Distribution Date
	 	N/A
	 	$                    






B-3









 






	14.  	Delinquency Summary




	 	 	 
	Master Trust Receivables Outstanding at the end of [Month][Year]

	 	$                    






	 	 	 	 	 
	 	 	Delinquent Amount	 	Percentage of ending
	Payment Status	 	ending balance	 	Receivables outstanding
	 
	 	 	 	 
	30 - 59 days

	 	$                    
	 	                    %
	 
	 	 	 	 
	60 - 179 days

	 	$                    
	 	                    %







	15.  	Excess Spread Percentages on this Distribution Date1




	 	 	 	 	 
	(a)

	 	Group One2
	 	                    %
	 
	 	 	 	 
	(b)

	 	Interchange Subgroup3
	 	                    %
	 
	 	 	 	 
	(c)

	 	Series 2005-1
	 	                    %







	16.  	Net Principal Charge-Off Percentage on this Distribution Date5




	 	 	 	 	 
	Charges-offs net of recoveries as an annualized percentage of Principal
Receivables at the beginning of [Month][Year]
	 	                    %






	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 









	1	 	Investors should refer only to the highest of
the Group Excess Spread Percentage (Item 15(a)), the Interchange Subgroup
Excess Spread Percentage (Item 15(b)) and the Series Excess Spread Percentage
(Item 15(c)) in assessing the current performance of the Trust and the
Receivables. If necessary, the Trust will use funds available from series or
subseries with positive Series Excess Spreads to cover expenses (as detailed in
note 4 below) for series or subseries, if any, with negative Series Excess
Spreads, except that any such funds consisting of Interchange will only be used
to cover expenses for Interchange Series.
	 
	2	 	Group Excess Spread is the sum of the Series
Excess Spreads for each series, including each subseries, in the Group. The
Group Excess Spread Percentage is equal to the Group Excess Spread, multiplied
by twelve, divided by the Series Investor Interests at the beginning of the
period for each series, including each subseries, in the Group.
	 
	3	 	The Interchange Subgroup Excess
Spread Percentage is the sum of (i) all amounts deposited into the Group
Interchange Reallocation Account for all Interchange Series and (ii) the
Interchange Subgroup Allocable Group Excess Spread (as such term is defined in
the Series Supplement between Discover Bank and U.S. Bank National Association,
as Trustee, for each series, including each subseries), multiplied by twelve,
divided by the Series Investor Interest for all Interchange Series at the
beginning of each period.
	 
	4	 	Series Excess Spread for this series is the
difference between (a) the sum of Finance Charge Collections, Yield
Collections, Investment Income, Series Interchange and Additional Funds for any
Class of this Series (see Item 3(c)), and (b) the sum of (i) the monthly
interest for this Series (see “Deposits into the SIFA on this
Distribution Date” in Item 6), (ii) the monthly servicing fee for this
Series (see Item 11(b)), (iii) the Investor Charged-Off Amount (see Item 7(b)),
and (iv) the Credit Enhancement Fee (see Item 13(d)), in each case for this
Distribution Date. For purposes of determining Group Excess Spread and the
Interchange Subgroup Shortfall Allocation Percentage, Series Excess Spread is
the amount calculated as described above minus (i) the amount of any payment by
the Trust under the Trust’s subordinated interest rate swap for this
series and (ii) if the Series Excess Spread for such series is positive without
giving effect to clause (ii) of this sentence, the lesser of Series Interchange
or the amount determined as the Series Excess Spread without giving effect to
this sentence; provided that Series Excess Spread, for purposes of determining
the Group Excess Spread and the Interchange Subgroup Shortfall Allocation
Percentage, shall not be reduced below zero as a result of this sentence. The
Series Excess Spread Percentage is equal to the Series Excess Spread,
multiplied by twelve, divided by the Series Investor Interest for this Series
at the beginning of the period.
	 
	5	 	For purposes of allocations to investors,
recoveries are treated as Finance Charge Collections and are included as such
in Item 3 above.






B-4









 





Exhibit C




Form of Master Servicer’s Monthly Certificate




Discover Card Master Trust I, Series 2005-1




CREDIT CARD




PASS-THROUGH CERTIFICATES









The undersigned, a duly authorized representative of Discover Bank, as Master Servicer pursuant to
the Amended and Restated Pooling and Servicing Agreement dated as of November 3, 2004 (the “Pooling
and Servicing Agreement”), and the Series Supplement, dated as of January 18, 2005 (the “Series
Supplement”) by and between Discover Bank and U.S. Bank National Association as Trustee, does
hereby certify as follows with respect to the Series Supplement for the Discover Card Master Trust
I, Series 2005-1 Certificates for the Distribution Date occurring on                     :




	 	 	 	 	 
	1.

	 	Discover Bank is Master Servicer under the Pooling and Servicing Agreement.	 	 
	 
	 	 	 	 
	2.

	 	The undersigned is a Servicing Officer of Discover Bank as Master Servicer.	 	 
	 
	 	 	 	 
	3

	 	The aggregate amount of Collections processed during [month] [year]
is equal to
	 	$                    
	 
	 	 	 	 
	4.

	 	The aggregate amount of Class A Principal Collections processed
during [month] [year] is equal to
	 	$                    
	 
	 	 	 	 
	5.

	 	The aggregate amount of Class A Finance Charge Collections processed
during [month] [year] is equal to
	 	$                    
	 
	 	 	 	 
	6.

	 	The aggregate amount of Class A Interchange processed during
[month][year] is equal to
	 	$                    
	 
	 	 	 	 
	7a.

	 	The aggregate amount of Class A Principal Collections
recharacterized as Series Yield Collections during [month] [year] is
equal to
	 	$                    
	 
	 	 	 	 
	7b.

	 	The aggregate amount of Class A Additional Funds for this
Distribution Date is equal to
	 	$                    
	 
	 	 	 	 
	8.

	 	The sum of all amounts payable to the Class A Certificateholders on
the current Distribution Date is equal to
	 	$                    






C-1









 





	 	 	 	 	 	 	 
	9.	 	The aggregate amount of Class B Principal Collections processed
during [month] [year] is equal to	 	$                    
	 
	 	 	 	 	 	 
	10.	 	The aggregate amount of Class B Finance Charge Collections
processed during [month] [year] is equal to	 	$                    
	 
	 	 	 	 	 	 
	11.	 	The aggregate amount of Class B Interchange processed during
[month][year] is equal to	 	$                    
	 
	 	 	 	 	 	 
	12a.	 	The aggregate amount of Class B Principal Collections
recharacterized as Series Yield Collections during [month] [year] is
equal to	 	$                    
	 
	 	 	 	 	 	 
	12b.	 	The aggregate amount of Class B Additional Funds for this
Distribution Date is equal to	 	$                    
	 
	 	 	 	 	 	 
	13.	 	The amount of drawings under the Credit Enhancement required to be
made and not immediately reimbursed on the related Drawing Date
pursuant to the Series Supplement:	 	 
	 
	 	 	 	 	 	 
	

	 	(a)
	 	with respect to the Class B Required Amount Shortfall
is equal to
	 	$                    
	 
	 	 	 	 	 	 
	

	 	(b)
	 	with respect to the Class B Cumulative Investor
Charged-Off Amount is equal to
	 	$                    
	 
	 	 	 	 	 	 
	

	 	(c)
	 	with respect to the Class B Investor Interest is equal
to
	 	$                    
	 
	 	 	 	 	 	 
	14.	 	The sum of all amounts payable to the Class B Certificateholders on
the current Distribution Date is equal to	 	$                    
	 
	 	 	 	 	 	 
	15.	 	Attached hereto is a true copy of the statement required to be
delivered by the Master Servicer on the date of this Certificate to the
Trustee pursuant to the section entitled Master Servicer’s Monthly
Certificate of the Series Supplement.	 	 






C-2









 





     IN WITNESS WHEREOF, the undersigned has duly executed and delivered this certificate this      
day of                     ,      .


	 	 	 	 	 
	 	DISCOVER BANK,

  as Master Servicer

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 





C-3