Document:

EX-4.3

 Exhibit 4.3 
  

 
 DISCOVER BANK 

as Master Servicer and Servicer, 

DISCOVER FUNDING LLC, 
 as
Transferor, 
 and 
 U.S. BANK
NATIONAL ASSOCIATION 
 as Trustee 

on behalf of the Certificateholders 

[FORM OF] AMENDED AND RESTATED SERIES SUPPLEMENT 

Dated as of [December 1], 2015 

to 
 THIRD AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT 
 Dated as of [December 1], 2015 
  

 
 DISCOVER CARD MASTER TRUST I 

SERIES 2007-CC 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
			
	 Section 1.
	 	 Definitions
	  	 	1	  
			
	 Section 2.
	 	 No Subordination
	  	 	11	  
			
	 Section 3.
	 	 Representations, Warranties and Covenants of the Transferor
	  	 	11	  
			
	 Section 4.
	 	 Representations, Warranties and Covenants of Discover Bank as Master Servicer and Servicer
	  	 	13	  
			
	 Section 5.
	 	 Representations and Warranties of Other Servicers
	  	 	13	  
			
	 Section 6.
	 	 Representations, Warranties and Covenants of the Trustee
	  	 	14	  
			
	 Section 7.
	 	 Authentication of Certificates
	  	 	14	  
			
	 Section 8.
	 	 Establishment and Administration of Investor Accounts
	  	 	14	  
			
	 Section 9.
	 	 Allocations of Collections
	  	 	15	  
			
	 Section 10.
	 	 Servicing Compensation
	  	 	23	  
			
	 Section 11.
	 	 Investor Certificateholders’ Monthly Statement
	  	 	23	  
			
	 Section 12.
	 	 Purchase of Notes; Sales of Receivables
	  	 	23	  
			
	 Section 13.
	 	 Ratification of Pooling and Servicing Agreement
	  	 	24	  
			
	 Section 14.
	 	 Counterparts
	  	 	24	  
			
	 Section 15.
	 	 Governing Law
	  	 	24	  
			
	 Section 16.
	 	 Intention of Parties
	  	 	24	  
			
	 Section 17.
	 	 Amendment for Sale Accounting Purposes
	  	 	25	  
			
	 Section 18.
	 	 Election Under Delaware Asset-Backed Securities Facilitation Act
	  	 	25	  
			
	 Section 19.
	 	 Increases to Series Investor Interest
	  	 	25	  
			
	 Section 20.
	 	 Amendments for Additional Collateral Certificates
	  	 	26	  
			
	 Section 21.
	 	 Dispute Resolution
	  	 	27	  
			
	 Section 22.
	 	 Asset Representations Review
	  	 	29	  
			
	 Section 23.
	 	 Effectiveness
	  	 	29	  

  
 -i- 

 EXHIBITS 
  

			
	EXHIBIT A:	  	Form of Series 2007-CC Investor Certificate
		
	EXHIBIT B:	  	Form of Certificateholders’ Monthly Statement

  
 ii 

 THIS AMENDED AND RESTATED SERIES SUPPLEMENT, dated as of [December 1], 2015 (this “Series
Supplement”), by and among DISCOVER BANK, a Delaware banking corporation (“Discover Bank”), as Master Servicer and Servicer, DISCOVER FUNDING LLC, a Delaware limited liability company (“Discover Funding”),
as Transferor, and U.S. BANK NATIONAL ASSOCIATION (the “Trustee”), as Trustee under the Third Amended and Restated Pooling and Servicing Agreement, dated as of [December 1], 2015, among Discover Bank, as Servicer, Discover Funding,
as Transferor, and the Trustee (as amended and supplemented from time to time the “Pooling and Servicing Agreement”), relates to the series of Master Trust Certificates to be known as the DISCOVER CARD MASTER TRUST I, SERIES 2007-CC
COLLATERAL CERTIFICATE (“Series 2007-CC”). Series 2007-CC is an Interchange Series that is a member of Group One of the Discover Card Master Trust I and is eligible for reallocations to and from other Series in Group One. (For
purposes of any Series Supplement for any other Series that requires that Interchange Series be so designated in their Series Term Sheet, this introductory paragraph shall constitute the Series Terms Sheet for this Series. For purposes of any Series
Supplement for any other Series that allocates payments sequentially by Class, the entire Series Investor Interest of this Series shall constitute Class A.) 

WHEREAS, the Trustee and Discover Bank have heretofore executed and delivered a Series Supplement, dated as of November 3, 2004 (as
amended, supplemented or otherwise modified prior to the Effective Date, the “Original Series 2007-CC Supplement”); 

WHEREAS, Discover Funding, as Transferor, Discover Bank, as Servicer, and the Trustee have executed the Pooling and Servicing Agreement in
order to substitute Discover Funding in the place of Discover Bank as the Seller (now referred to as the Transferor); 
 WHEREAS, the
parties hereto desire to amend and restate in its entirety the Original Series 2007-CC Supplement to, among other things, provide for the substitution of Discover Funding in the place of Discover Bank, in its capacity as Seller (now referred to as
the Transferor). 
 NOW, THEREFORE, in consideration of the promises and the agreements contained herein, the Original Series 2007-CC
Supplement is hereby amended and restated in its entirety as follows: 
 SECTION 1. Definitions. 

(a) Capitalized terms not otherwise defined in this Series Supplement shall have the meanings ascribed to them in the Pooling and Servicing
Agreement. Capitalized terms that refer to a Series refer to Series 2007-CC unless the context otherwise requires. For purposes of determining any amount or making any calculation hereunder, such amount or calculation, (i) if specified to be as
of the first day of any Due Period, shall (a) include any increase in the Series Investor Interest occurring during such Due Period as if such increase had occurred on the first day of such Due Period and (b) give effect to any payments,
deposits or other allocations made on the Distribution Date related to the prior Due Period; and (ii) if specified to be as of the close of business on the last day of any Due Period, shall give effect to any reduction to the Series Investor
Interest as a result of payments, deposits or allocations made on the related Distribution Date. For purposes of this Series Supplement, a reference to any agreement, document, policy, or procedure is to that agreement, document, policy, or
procedure as may be amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time. 

 (b) The following terms have the definitions set forth below with respect to Series 2007-CC,
unless the context otherwise clearly requires: 
 “60-Day Delinquent Receivables” means, as of any date of determination,
all Receivables, other than Receivables in Charged-Off Accounts, in the Trust that are 60 or more days delinquent as of the last day of the Due Period immediately preceding such date, as determined in accordance with the related Servicer’s
customary servicing practices. 
 “Accumulation Period’’ with respect to any Note, shall have the meaning set forth in
the applicable Indenture Supplement. 
 “Additional Collateral Certificate” shall have the meaning set forth in the
Indenture. “Calculation Agent” shall have the meaning set forth in the Indenture. 
 “ADR Proceeding”
shall mean a mediation or arbitration instituted pursuant to Section 21 hereof. 
 “Asset Representations Review
Agreement” means that certain Asset Representations Review Agreement among Discover Bank, as Master Servicer and Servicer, the Issuer and the Asset Representations Reviewer, dated as of [December 1], 2015. 

“Asset Representations Reviewer” shall mean the entity appointed to be the “asset representations reviewer”
pursuant to the Asset Representations Review Agreement. 
 “Charge-offs” shall have the meaning set forth in the Indenture.

 “Class A Cumulative Investor Charged-Off Amount” on any Distribution Date, shall have the meaning set forth in step
(21) (Allocation from the DCMT Group One Finance Charge Collections Reallocation Account) of Section 3.01 of the Indenture Supplement for the DiscoverSeries, as adjusted pursuant to Sections 9(b)(7) and 9(b)(l0) and,
as applicable, with respect to each other Series of Investor Certificates then outstanding, shall have the meaning set forth in the applicable Series Supplement. 

“Class A Principal Distribution Amount Shortfall” shall have the meaning set forth in step (64) (Allocation from the
DCMT Group One Principal Collections Reallocation Account for Principal Shortfalls other than Prefunding Shortfalls) of Section 3.01 of the Indenture Supplement for the DiscoverSeries, as adjusted pursuant to Section 9(b)(15)
and, as applicable, with respect to each other Series of Investor Certificates then outstanding, shall have the meaning set forth in the applicable Series Supplement. 

“Class A Required Amount Shortfall” on any Distribution Date, shall have the meaning set forth in step
(9) (Allocation from the DCMT Group One Finance Charge Collections Reallocation Account) of Section 3.01 of the Indenture Supplement for the DiscoverSeries, as adjusted pursuant to Section 9(b)(6) and 9(b)(9) and,
as applicable, with respect to each other Series of Investor Certificates then outstanding, shall have the meaning set forth in the applicable Series Supplement. 

  
 2 

 “Class Invested Amount” shall mean the Series Invested Amount. 

“Clean-Up Call Amount” shall have the meaning set forth in Section 12(a). 

“Controlled Liquidation Period” shall mean any period in which the Targeted Principal Deposit minus the Targeted
Prefunding Deposit for any series, class or Tranche of Notes is greater than zero. 
 “Delinquency Percentage” means, for
each Distribution Date and the related Due Period, an amount (expressed as a percentage) equal to the ratio of (i) the aggregate balance of all 60-Day Delinquent Receivables as of the last day of the Due Period immediately preceding such
Distribution Date to (ii) the aggregate balance of Receivables in the Trust as of the last day of the Due Period immediately preceding such Distribution Date. 

“Discover Bank” shall have the meaning set forth in the recitals hereto. 

“Discount Note” shall have the meaning set forth in the applicable Indenture Supplement. 

“Distribution Date” shall mean the 15th day of each calendar month (or,
if such day is not a Business Day, the next succeeding Business Day) commencing in August 2007. When used with respect to a Due Period, the Distribution Date means the first Distribution Date following the end of such Due Period. 

“Early Redemption Event” shall have the meaning set forth in the Indenture. 

“Effective Date” shall have the meaning set forth in the Pooling and Servicing Agreement. 

“Event of Default” shall have the meaning set forth in the Indenture. 

“Excess Spread Amount” shall have the meaning set forth in the applicable Indenture Supplement. 

“Finance Charge Allocation Amount” with respect to any series, class or Tranche of Notes, shall have the meaning set forth in
the Indenture. 
 “Finance Charge Amounts” shall have the meaning set forth in the Indenture. 

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

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

  
 3 

 “Group Principal Collections Reallocation Account” shall have the meaning
specified in Section 8. 
 “Indenture” shall mean that certain Amended and Restated Indenture, dated as of
[December 1], 2015, by and between Discover Card Execution Note Trust, as Issuer, and U.S. Bank National Association, as Indenture Trustee. 

“Indenture Supplement” shall mean, with respect to the DiscoverSeries Notes, that certain Second Amended and Restated
Indenture Supplement, dated as of [December 1], 2015, by and between Discover Card Execution Note Trust, as Issuer, and U.S. Bank National Association, as Indenture Trustee, and with respect to any other series of Notes issued by Discover Card
Execution Note Trust, the applicable indenture supplement entered into pursuant to the Indenture relating to such series. 

“Indenture Trustee” shall have the meaning set forth in the Indenture. 

“Initial Dollar Principal Amount” with respect to any class or Tranche of Notes, shall have the meaning set forth in the
applicable Indenture Supplement. 
 “Interchange Series” shall mean this Series and each series issued by the Trust that
indicates in its Series Supplement that it is an Interchange Series. 
 “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 zero, the product
of the Group Excess Spread and the Interchange Subgroup Shortfall Allocation Percentage. 
 “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 available to be
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. 

  
 4 

 “Investor Accounts” shall mean, in addition to Investor Accounts established
pursuant to the Pooling and Servicing Agreement, the Series Collections 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 Certificateholder” shall mean, at any time, the holder or holders of the
Series 2007-CC Collateral Certificate. 
 “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 Investor Interest on the Series Closing Date). 
 “Investor Servicing Fee Percentage” shall mean
2.0% per annum calculated on the basis of a 360-day year of twelve 30-day months. 
 “Investor Servicing Fee
Shortfall” shall have the meaning specified in Section 9(b)(3). 
 “Monthly Interest Accrual Period”
shall have the meaning set forth in the applicable Indenture Supplement. 
 “Nominal Liquidation Amount” with respect to
any series, class or Tranche of Notes, shall have the meaning set forth in the Indenture. 
 “Note Issuance Trust” shall
mean the Discover Card Execution Note Trust, governed by the Amended and Restated Trust Agreement, dated as of [December 1], 2015, by and between Discover Funding, as Beneficiary, and Wilmington Trust Company, as Owner Trustee. 

“Note Issuance Trust’s Annual Report Date” shall have the meaning specified in Section 4(b). 

“Note Rating Agency” shall have the meaning set forth in the Indenture. 

“Notes” shall mean any notes issued by the Note Issuance Trust under the Indenture and any applicable Indenture Supplement.

 “Outstanding Dollar Principal Amount” with respect to any series, class or Tranche of Notes, shall have the meaning set
forth in the Indenture. 
 “Paying Agent” shall mean the Corporate Trust Office of the Trustee. 

“Pooling and Servicing Agreement” shall have the meaning set forth in the recitals hereto. 

“Prefunding Negative Spread” shall have the meaning set forth in the applicable Indenture Supplement. 

  
 5 

 “Principal Allocation Amount” with respect to any series, class or Tranche of
Notes, shall have the meaning set forth in the Indenture. 
 “Principal Distribution Amount Shortfall” when used for
purposes of any Series Supplement for any other Series in the Group to which the Series established hereby belongs, shall mean the Class A Principal Distribution Amount Shortfall. 

“Public Notes” means any Notes that have been registered under the Securities Act. 

“Rating Agency Condition” shall have the meaning set forth in the Indenture. 

“Required Daily Deposit” shall have the meaning set forth in the Indenture. 

“Revolving Period’’ shall mean each Due Period, prior to the Series Termination Date, for which the Targeted Principal
Deposit for the related Distribution Date for all series, classes or Tranches of Notes, as applicable, is zero. 
 “Series
2007-CC” shall have the meaning set forth in the recitals hereto. 
 “Series 2007-CC Collateral Certificate” shall
mean the Investor Certificate created under this Series Supplement and issued to the Investor Certificateholder. 
 “Series 2007-CC
Collateral Certificate Percentage” shall have the meaning set forth in the Indenture. 
 “Series Charge-Off Allocation
Percentage” shall mean, with respect to any Distribution Date or any “trust Distribution Date, as applicable, the percentage equivalent of a fraction the numerator of which shall be
the amount of the Series 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. 
 “Series Closing Date” shall mean July 26, 2007. 

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

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

“Series Excess Spread” shall, with respect to the Series established hereby, for any Distribution Date (x) so long as
the only collateral certificate owned by the Note Issuance Trust is the Series 2007-CC Collateral Certificate, mean the sum of the Excess Spread Amounts for the DiscoverSeries and each additional series of Notes issued under the Indenture;
provided, however, that solely for purposes of determining the Group Excess Spread and the Interchange Subgroup Shortfall Allocation Percentage for this Series and any other Series in the Group to which this Series belongs, Series Excess
Spread shall be the amount determined as set forth above minus for so long as any Series that is not an Interchange Series is outstanding and the Series Excess Spread is positive, 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 

  
 6 

 
Allocation Percentage, shall not be reduced below zero as a result of this proviso, if any, for such Distribution Date or (y) during any period when Additional Collateral Certificates are
owned by the Note Issuance Trust, have the meaning set forth in the documents relating to such addition (provided that such documents are accepted and agreed to by the parties hereto); and with respect to each other Series of Investor Certificates
then outstanding, shall have the meaning set forth in the applicable Series Supplement. 
 “Series Finance Charge Amounts”
shall, with respect to any series of Notes, have the meaning set forth in the applicable Indenture Supplement. 
 “Series Finance
Charge Collections” shall mean with respect to any day or any Distribution Date or Trust Distribution Date, as applicable, an amount equal to the product of (x) the Series Finance Charge Collections Allocation Percentage 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 Series Finance Charge Collections shall be increased by the lesser of
(i) the amount of Series Prefunding Negative Spread, if any, for each series, class or Tranche of Notes, as applicable (without duplication) and (ii) an amount equal to the product of the total amount of Finance Charge Collections
otherwise allocable to Discover Funding as Holder of the Transferor Certificate for the related Due Period and a fraction the numerator of which is the Series Invested Amount and the denominator of which is the Aggregate Invested Amount. 

“Series Finance Charge Collections Allocation Percentage” shall mean, with respect to any Distribution Date or any Trust
Distribution Date, as applicable, 
 (a) so long as an Early Redemption Event or an Event of Default is not then continuing with respect to
any series, class or Tranche of Notes or an Amortization Event is not then continuing with respect to this Series 2007-CC, the percentage equivalent of a fraction the numerator of which shall be the amount of the Series 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; 

(b) if an Early Redemption Event or an Event of Default for any series, class or Tranche of Notes issued by the Note Issuance Trust has
occurred and is then continuing, the percentage equivalent of a fraction the numerator of which shall be the sum of the Finance Charge Allocation Amounts for each series, class or Tranche of Notes (without duplication) multiplied by the
Series 2007-CC Collateral Certificate Percentage; 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; or
 
 (c) if an Amortization Event has occurred and is then continuing with respect to this Series 2007-CC, the percentage equivalent
of a fraction, the numerator of which shall be the amount of the Series Investor Interest on the last day of the Due Period immediately preceding such 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; 

  
 7 

 provided, however, in the event that clause (b) and clause (c) of this definition are both
applicable (i.e., if an Early Redemption Event or an Event of Default for any series, class or Tranche of Notes issued by the Note Issuance Trust has occurred and is then continuing and an Amortization Event has occurred and is continuing), then the
“Series Finance Charge Collections Allocation Percentage” shall be the higher of the amount determined in accordance with clause (b) and the amount determined in accordance with clause (c). 

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

“Series Interchange Allocation Percentage” shall mean, with respect to any Distribution Date or Trust Distribution Date, as
applicable, the percentage equivalent of a fraction the numerator of which shall be the amount of the Series 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. 
 “Series Invested
Amount” shall mean the product of (x) the sum of the Outstanding Dollar Principal Amounts for all Notes and (y) the Series 2007-CC Collateral Certificate Percentage. 

“Series Investor Charged-Off Amount” shall mean, with respect to this Series for any Distribution Date, an amount equal to
the product of (a) the Charged-Off Amount for such Distribution Date and (b) the Series Charge-Off Allocation Percentage. 

“Series Investor Interest” as of any date of determination shall (i) so long as the only collateral certificate owned by
the Note Issuance Trust is the Series 2007-CC Collateral Certificate, mean an amount equal to the sum, without duplication, of the Nominal Liquidation Amounts for each series, class or Tranche of Notes then outstanding or (ii) during any period
when Additional Collateral Certificates are owned by the Note Issuance Trust, have meaning set forth in the documents relating to such addition (provided that such documents are accepted and agreed to by the parties hereto). 

“Series Minimum Principal Receivables Balance” shall mean, with respect to the Series established hereby, on any date of
determination (a) if no series, class or Tranche of Notes has a Targeted Principal Deposit that is greater than zero or no Amortization Event has occurred and is then continuing with respect to this Series 2007-CC, the Series Investor Interest
on such date of 

  
 8 

 
determination, divided by 0.93, and (b)(i) if any series, class or Tranche of Notes has a Targeted Principal Deposit that is greater than zero, the sum of, without duplication, the Principal
Allocation Amounts for each such series, class or Tranche, multiplied by the Series 2007-CC Collateral Certificate Percentage, divided by 0.93 or (ii) if an Amortization Event has occurred and is continuing with respect to this Series
2007-CC, the Series Investor Interest as of the last day of the calendar month preceding the date of the occurrence of the Amortization Event, divided by 0.93 (in the event that clause (i) and clause (ii) are both applicable, then the
“Series Minimum Principal Receivables Balance” shall be the higher of the amount determined in accordance with clause (i) and the amount determined in accordance with clause (ii)) divided by 0.93; provided, however, that
Discover Funding as Holder of the Transferor Certificate may, upon 30 days’ prior notice to the Trustee and the Rating Agencies, reduce the Series Minimum Principal Receivables Balance by increasing the divisors set forth above, subject to the
condition that Discover Funding as Holder of the Transferor Certificate shall have been notified by the Rating Agencies that such reduction would not result in the lowering below or withdrawal of the Required Rating of any Class of any Series then
outstanding or of any series, class or Tranche of Notes then outstanding, and provided, further, that the divisors set forth above may not be increased to more than 0.98. 

“Series Percentage” shall mean, (a) for this Series with respect to Principal Collections, the “Series Principal
Collections Allocation Percentage,” and for each other Series with respect to Principal Collections, shall have the meaning set forth in the applicable Series Supplement, and (b) for this Series with respect to Finance Charge Collections,
the “Series Finance Charge Collections Allocation Percentage,” and for each other Series with respect to Finance Charge Collections, shall have the meaning set forth in the applicable Series Supplement. 

“Series Prefunding Negative Spread” shall mean the sum of the amounts of Prefunding Negative Spread for each Tranche of Notes
multiplied by the Series 2007-CC Collateral Certificate Percentage. 
 “Series Principal Amounts” with respect to
any series of Notes, shall have the meaning set forth in the applicable Indenture Supplement. 
 “Series Principal
Collections” shall mean, with respect to any day or any Distribution Date or Trust Distribution Date, as applicable, an amount equal to the product of (x) the Series Principal Collections Allocation Percentage for the related
Distribution Date and (y) the amount of Principal Collections for such day or for the related Due Period, as applicable. 

“Series Principal Collections Allocation Percentage” shall mean, with respect to any Distribution Date or any Trust
Distribution Date, as applicable, 
 (a) if no series, class or Tranche of Notes has a Targeted Principal Deposit that is greater than zero
or an Amortization Event is not then continuing with respect to this Series 2007-CC, the percentage equivalent of a fraction the numerator of which shall be the amount of the Series 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; 

  
 9 

 (b) if any series, class or Tranche of Notes has a Targeted Principal Deposit that is greater
than zero, the percentage equivalent of a fraction, the numerator of which shall be the sum of the Principal Allocation Amounts for each series, class or Tranche of Notes (without duplication) multiplied by the Series 2007-CC Collateral
Certificate Percentage; 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) if an Amortization Event has occurred and is then continuing with respect to this Series 2007-CC, the percentage equivalent of a fraction,
the numerator of which shall be the amount of the Series Investor Interest on the last day of the Due Period immediately preceding such 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 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, in the event that clause
(b) and clause (c) of this definition are both applicable (i.e., if the Targeted Principal Deposit of any series, class or Tranche of Notes issued by the Note Issuance Trust is greater than zero and an Amortization Event has occurred and
is then continuing), then the “Series Principal Collections Allocation Percentage” shall be the higher of the amount determined in accordance with clause (b) and the amount determined in accordance with clause (c). 

“Series Required Principal Amount” shall mean, with respect to each Distribution Date of any Controlled Liquidation Period,
the product of (x) (i) if the related Due Period does not occur in February, 1.15 or (ii) if the related Due Period occurs in February, 1.05, and (y) the product of (A) the sum of the Targeted Principal Deposits minus
Targeted Prefunding Deposits for each Tranche of Notes for such Distribution Date and (B) the Series 2007-CC Collateral Certificate Percentage. 

“Series Servicing Fee” with respect to any series of Notes shall have the meaning set forth in the Indenture Supplement. 

“Series Supplement” shall have the meaning set forth in the recitals hereto or, as applicable, with respect to any other
Series issued by the Trust, the series supplement(s) relating to such Series, as such agreement may be amended, restated or supplemented from time to time. 

“Series Termination Date” shall mean, unless extended by the parties hereto, July 1, 2028 or, if earlier, the date on
which the Nominal Liquidation Amount for all series, classes and Tranches of Notes has been reduced to zero. 
 “Statement
Date” shall mean each Distribution Date, commencing in August 2007. 

  
 10 

 “Targeted Prefunding Deposit” with respect to any series, class or Tranche of
Notes shall have the meaning set forth in the applicable Indenture Supplement. 
 “Targeted Principal Deposit” with respect
to any series, class or Tranche of Notes shall have the meaning set forth in the applicable Indenture Supplement. 

“Tranche” shall have the meaning set forth in the Indenture. 

“Transferred Assets” shall have the meaning set forth in Section 18 hereto. 

“Trustee” shall have the meaning set forth in the recitals hereto. 

“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. 
 “Unscheduled Principal Distribution Amount Shortfall” shall
have the meaning set forth in step (65) (Allocation from the DCMT Group One Principal Collections Reallocation Account for Prefunding Shortfalls) of Section 3.01 of the Indenture Supplement for the DiscoverSeries and, as applicable,
with respect to each other Series of Investor Certificates then outstanding, shall have the meaning set forth in the applicable Series Supplement. 

“Verified Note Owner” shall have the meaning set forth in the Indenture. 

(c) Any provision of the Pooling and Servicing Agreement that requires confirmation that any action, amendment, event or other circumstance
will not result in a reduction below the Required Rating or withdrawal of the rating of any Class of any Series then outstanding as confirmed in writing by the Rating Agencies shall require satisfaction of the Rating Agency Condition with respect to
any applicable Note Rating Agency. 
 SECTION 2. No Subordination. Series 2007-CC shall not be subordinated in right of
payment to any other Series, whether currently outstanding or to be issued in the future. No other Series issued by the Trust may be subordinated in right of payment to Series 2007-CC. 

SECTION 3. Representations, Warranties and Covenants of the Transferor. 

(a) Representations and Warranties. The representations and warranties of the Transferor 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 Effective Date and/or the date set forth in the Pooling and Servicing Agreement, as applicable. The Transferor also represents and warrants to the
Trust as of the Effective Date that: 
 (i) The execution, delivery and performance of this Series Supplement by such Transferor have been
duly authorized by all necessary limited liability company 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 Formation or the
Limited Liability Company Agreement of the Transferor, 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 the 

  
 11 

 
Transferor’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 the Transferor, 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. 

(ii) 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 the Transferor, 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. 
 (iii) The Receivables constitute “accounts”
within the meaning of Article 9 of the applicable UCC. 
 (iv) The Transferor has caused or will have caused, within ten days of the
Effective Date, 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. 
 (v) 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 Transferor has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Receivables. 

(vi) The Transferor has not authorized the filing of and is not aware of any financing statements against the Transferor 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. 

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

(viii) The representations and warranties set forth in this Section 3(a) shall survive the transfer and assignment to the Trust
of the Receivables transferred to the Trust by the Transferor. 
 (b) Notice of Other Securitization. The Transferor shall provide
prior written notice to each Rating Agency if it enters into other securitization transactions and shall cause the pooling and servicing agreement or indenture related to such other securitization transactions to contain a provision similar to
Section 1602 of the Indenture. 

  
 12 

 SECTION 4. Representations, Warranties and Covenants of Discover Bank as Master Servicer
and Servicer. 
 (a) Representations and Warranties. 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 Effective Date. Discover Bank as Master Servicer and Servicer also represents and warrants to the Trust as of the Effective Date 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. 
 (b) Regulation AB Compliance. The Master Servicer and each Servicer agree that the provisions of Article XIV of
the Pooling and Servicing Agreement shall be for the benefit of the Note Issuance Trust. Without limiting the foregoing, the Master Servicer and each Servicer agree that (i) they will make available to the depositor for the Note Issuance Trust,
on or before the date on which the Note Issuance Trust is required to file its Annual Report pursuant to Section l3 or 15(d) of the Securities Exchange Act of 1934 on Form 10-K with the Commission (the “Note Issuance Trust’s Annual
Report Date”), such assessments, attestations, compliance certificates and other materials consistent in scope with those provided to the Transferor under Article XIV, (ii) they will provide such additional information and disclosures
as shall be necessary for any prospectus or other offering document for the Notes to comply with Regulation AB, consistent with the requirements of Article XIV, and (iii) they shall use their best efforts to cause any Servicing Participant used
by them (directly or indirectly) for the benefit of the Transferor to comply with the provisions of this Section 4(b) to the same extent as if such Servicing Participant were the Master Servicer or the Servicer. The Master Servicer and
each Servicer acknowledge that the depositor for the Note Issuance Trust or any other Person that will be responsible for signing the Sarbanes Certification on behalf of the Note Issuance Trust may rely on the certifications provided pursuant to
this Section 4(b) in signing a Sarbanes Certification and filing such certification with the Commission. 
 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 Effective Date. Each such Servicer also represents and warrants to the Trust as of the Effective Date 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 

  
 13 

 
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, Warranties and Covenants of the Trustee. 
 (a) Representations and Warranties. 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 Effective Date. The Trustee also represents and warrants as of the Effective Date 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 performance by it of this Series Supplement, and this Series Supplement has been duly executed and
delivered by the Trustee. 
 (b) Regulation AB Compliance. The Trustee agrees that the provisions of Article XIV of the Pooling and
Servicing Agreement shall be for the benefit of the Note Issuance Trust. Without limiting the foregoing, the Trustee agrees that (i) it will make available to the depositor for the Note Issuance Trust, on or before the Note Issuance
Trust’s Annual Report Date, such assessments, attestations, compliance certificates and other materials consistent in scope with those provided to the Transferor under Article XIV and (ii) it will provide such additional information and
disclosures as shall be necessary for any prospectus or other offering document for the Notes to comply with Regulation AB, consistent with the requirements of Article XIV. The Trustee acknowledges that the depositor for the Note Issuance Trust or
any other Person that will be responsible for signing the Sarbanes Certification on behalf of the Note Issuance Trust may rely on the certifications provided pursuant to this Section 6(b) in signing a Sarbanes Certification and filing
such certification with the Commission. 
 SECTION 7. Authentication of Certificates. Pursuant to the Original Series 2007-CC
Supplement, the Trustee has duly authenticated and delivered the Series 2007-CC Collateral Certificate in accordance with Section 6.06 of the Pooling and Servicing Agreement. The Series 2007-CC Collateral Certificate has been issued in fully
registered form, without coupons. 
 SECTION 8. Establishment and Administration of Investor Accounts. 

(a) The Series Distribution Account and Series 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, two non-interest bearing segregated trust accounts (the “Series Distribution
Account;” and, for Collections, the “Series 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 from time to time in the Series Distribution Account and the Series Collections Account and in all proceeds thereof; 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 Transferor Certificate in 

  
 14 

 
accordance with Section 4.02(c) of the Pooling and Servicing Agreement. Pursuant to authority granted to it pursuant to Section 3.0l(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 and the Series 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 and the Series 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 and similar amounts for other Series in the Group of which this Series is a member, the “Group Finance Charge Collections Reallocation Account,” for
reallocated Series Principal Collections and amounts used to reimburse charge-offs for this Series and other Series in the Group of which this Series is a member, the “Group Principal Collections Reallocation Account” and for reallocated
Series Interchange and similar amounts for other Series in the Group of which this Series is a member, 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 Group Interchange Reallocation Account and in all proceeds thereof; 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 Transferor
Certificate in accordance with Section 4.02(c) of the Pooling and Servicing Agreement. Pursuant to authority granted to it pursuant to Section 3.0l (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) Transfer of Investor Accounts. If at any time any of the Investor
Accounts established in Sections 8(a) and 8(b) 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. 

  
 15 

 (b) Deposits. The Master Servicer shall, on or before each Distribution Date, 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. 

(1) Series Finance Charge Collections and Series Interchange to Series Distribution Account. An amount equal to the sum of
(x) Series Finance Charge Collections and (y) Series Interchange shall be withdrawn from the Series Collections Account and deposited into the Series Distribution Account. 

(2) Series Principal Collections to Series Distribution Account. An amount equal to the Series Principal Collections shall be
withdrawn from the Series Collections Account and deposited into the Series Distribution Account. 
 (3) Investor Servicing Fee from
Series Distribution Account. An amount equal to the lesser of 
  

	 	(x)	the Investor Servicing Fee and 

  

	 	(y)	the portion of the Series Servicing Fee payable to the Master Servicer under step 7 (Series Servicing Fees from Series Finance Charge Amounts) of Section 3.01 of the Indenture Supplement for
the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable) 

 shall be withdrawn from the Series
Distribution Account and paid to the Master Servicer. The amount by which the Investor Serving Fee exceeds the amount of such payment shall be the “Investor Servicing Fee Shortfall.” 

(4) Reallocation to Group Finance Charge Collections Reallocation Account. An amount, if any, equal to the portion of Series Finance
Charge Amounts for each series of Notes that are to be reallocated to the Group Finance Charge Collections Reallocation Account under step (56) (Reallocation of Series Finance Charge Amounts to the DCMT Group One Finance Charge Collections
Reallocation Account) of Section 3.01 of the Indenture Supplement for the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable) shall be withdrawn from the Series Distribution Account and deposited
into the Group Finance Charge Collections Reallocation Account. 
 (5) Reallocation to Group Interchange Reallocation Account. An
amount, if any, equal to the portion of Series Finance Charge Amounts for each series of Notes that are to be reallocated to the Group Interchange Reallocation Account under step (57) (Reallocation of Series Finance Charge Amounts to the
DCMT Group One Interchange Reallocation Account) of Section 3.01 of the Indenture Supplement for the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable) shall be withdrawn from the Series
Distribution Account and deposited into the Group Interchange Reallocation Account. 

  
 16 

 (6) Reallocation from Group Finance Charge Collections Reallocation Account for Class A
Required Amount Shortfall. An amount equal to the lesser of 
  

	 	(x)	the Class A Required Amount Shortfall and 

  

	 	(y)	the product of 

  

	 	(1)	a fraction the numerator of which is the Class A Required Amount Shortfall for this Series and the denominator of which is the sum of the Class A Required Amount Shortfalls for this Series and the Class A
Required Amount Shortfalls for all Classes designated as Class A of all other 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 (6)) 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 Distribution Account. The
Class A Required Amount Shortfall shall be reduced by the amount of such deposit. 
 (7) Reallocation from Group Finance Charge
Collections Reallocation Account for Class A Cumulative Investor Charged-Off Amount. An amount equal to the lesser of 
  

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

  

	 	(y)	the product of 

  

	 	(1)	a fraction the numerator of which is the Class A Cumulative Investor Charged-Off Amount for this Series and the denominator of which is the sum of the Class A Cumulative Investor Charged-Off Amounts for this
Series and the Class A Cumulative Investor Charged-Off Amounts for all Classes designated as Class A of all other 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 (7)) 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,

  
 17 

 shall be withdrawn from the Group Finance Charge Collections Reallocation Account and deposited into the Series
Distribution Account. The Class A Cumulative Investor Charged-Off Amount shall be reduced by the amount of such deposit. 
 (8)
Reallocation from Group Finance Charge Collections Reallocation Account for other Series. After the allocations set forth in clauses (6) and (7) are made, then (i) if there are one or more Subordinate Classes with respect to
any other Series in the Group to which the Series established hereby belongs, the allocations set forth in other Series Supplements which are substantially similar to clauses (6) and (7) shall be made with respect to each other such Class,
in alphabetical order, to the extent that funds are available pursuant to this clause (8) and (ii) following the allocations set forth in clause (i), any other allocations set forth in other Series Supplements with respect to funds on
deposit in the Group Finance Charge Collections Reallocation Account shall be made in accordance with such Series Supplements, to the extent that funds are available pursuant to this clause (8). For purposes of calculating the amount to 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 Credit Enhancement Agreement, the Series Investor Interest of the Series
established hereby shall be treated as zero. 
 (9) Reallocation from Group Interchange Reallocation Account for Class A Required
Amount Shortfall. An amount equal to the lesser of 
  

	 	(x)	the Class A Required Amount Shortfall and 

  

	 	(y)	the product of 

  

	 	(l)	a fraction the numerator of which is the Class A Required Amount Shortfall and the denominator of which is the sum of the Class A Required Amount Shortfalls for this Series and the Class A Required Amount
Shortfall for all Classes designated as Class A of all other 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 (9)) and 

  

	 	(3)	 the amount on deposit in the Group Interchange Reallocation Account before any withdrawals

  
 18 

	 	
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 A Required Amount
Shortfall shall be reduced by the amount of such deposit. 
 (10) Reallocation from Group Interchange Reallocation Account for
Class A Cumulative Investor Charged-Off Amount. An amount equal to the lesser of 
  

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

  

	 	(y)	the product of 

  

	 	(1)	a fraction the numerator of which is the Class A Cumulative Investor Charged-Off Amount for this Series and the denominator of which is the sum of the Class A Cumulative Investor Charged-Off Amounts for this
Series and the Class A Cumulative Investor Charged-Off Amount for all Classes designated as Class A of all other 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 (10)) 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 A
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such deposit. 
 (11) Reallocation from Group Interchange
Reallocation Account for other Series. After the allocations set forth in clauses (9) and (10) are made, then (i) if there are one or more Subordinate Classes with respect to any other Interchange Series in the Group to which the
Series established hereby belongs, the allocations set forth in other Series Supplements which are substantially similar to the allocations set forth in clauses (9) and (10) shall be made with respect to each other such Class, in
alphabetical order, to the extent that funds are available pursuant to this clause (11) and (ii) following the allocations set forth in clause (i), any other allocations set forth in other Series Supplements with respect to funds on
deposit in the Group Interchange Reallocation Account shall be made in accordance with such Series Supplements, to the extent that funds are available pursuant to this clause (11). For purposes of calculating the

  
 19 

 
amount to 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 Credit Enhancement
Agreement, the Series Investor Interest of the Series established hereby shall be treated as zero. 
 (12) Investor Servicing Fee
from Series Distribution Account after Reallocations. An amount equal to the lesser of 
  

	 	(x)	the Investor Servicing Fee Shortfall after step (3) and 

  

	 	(y)	the portion of the Series Servicing Fee payable to the Master Servicer under step 14 (Series Servicing Fee Shortfall from Reallocated Finance Charge Amounts) of Section 3.01 of the Indenture Supplement for
the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable), 

 shall be withdrawn from the Series
Distribution Account and paid to the Master Servicer. The Investor Servicing Fee Shortfall shall be reduced by the amount of such payment. 

(13) Reallocation from Subordinated Notes Principal for Investor Servicing Fee Shortfall. An amount equal to the lesser of 

 

	 	(x)	the Investor Servicing Fee Shortfall after step (12) and 

  

	 	(y)	the portion of the Series Servicing Fee payable to the Master Servicer under each of steps (41) (Series Servicing Fee Shortfall from Class D Principal), (42) (Series Servicing Fee Shortfall from Class C
Principal) and (43) (Series Servicing Fee Shortfall from Class B Principal), as applicable, of Section 3.01 of the Indenture Supplement for the DiscoverSeries (and any comparable steps under any other Indenture
Supplement, as applicable) 

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

(14) Reallocation to Group Principal Collections Reallocation Account. An amount, if any, equal to the portion of Series Principal
Amounts for each series of Notes that are to be reallocated to the Group Principal Collections Reallocation Account under step (79) (Reallocation of Series Principal Amounts to the DCMT Group One Principal Collections Reallocation
Account) of Section 3.01 of the Indenture Supplement for the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable) shall be withdrawn from the Series Distribution Account and deposited into the Group
Principal Collections Reallocation Account. 

  
 20 

 (15) Reallocation from Group Principal Collections Reallocation Account for Class A
Principal Distribution Amount Shortfall. An amount equal to the lesser of 
  

	 	(x)	the Class A Principal Distribution Amount Shortfall and 

  

	 	(y)	the product of 

  

	 	(1)	a fraction the numerator of which is the Class A Principal Distribution Amount Shortfall for this Series and the denominator of which is the sum of the Class A Principal Distribution Amount Shortfall for this
Series and the Principal Distribution Amount Shortfalls allocable to all Class A Certificates of all other 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 (15)) and 

 

	 	(2)	the amount on deposit in the Group Principal 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 Principal Collections Reallocation Account and deposited into the Series Distribution Account. The
Class A Principal Distribution Amount Shortfall shall be reduced by the amount of such deposit. 
 (16) Reallocation from Group
Principal Collections Reallocation Account for other Series. After the allocations set forth in clause (15) are made, then (i) if there are one or more Subordinate Classes with respect to any other Series in the Group to which the
Series established hereby belongs, the allocations set forth in other Series Supplements which are substantially similar to clause (15) shall be made with respect to each other such Class, in alphabetical order and (ii) following the
allocations set forth in clause (i), any other allocations set forth in other Series Supplements with respect to funds on deposit in the Group Principal Collections Reallocation Account shall be made in accordance with such Series Supplements, to
the extent that funds are available pursuant to this clause (16). 
 (17) Reallocation from Group Principal Collections Reallocation
Account for Unscheduled Principal Distribution Amount Shortfall. An amount equal to the lesser of 
  

	 	(x)	the Unscheduled Principal Distribution Amount Shortfall and 

  
 21 

	 	(y)	the product of 

  

	 	(1)	a fraction the numerator of which is the Unscheduled Principal Distribution Amount Shortfall for this Series and the denominator of which is the sum of the Unscheduled Principal Distribution Amount Shortfall for this
Series and the Unscheduled Principal Distribution Amount Shortfall for any other 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 (17)), and 

  

	 	(2)	the amount on deposit in the Group Principal 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 Principal Collections Reallocation Account and deposited into the Series Distribution Account. 

(18) 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. 
 (19) An amount equal to the portion of Series Principal
Amounts for each series of Notes that are to be deposited into the Collections Account pursuant to step (80) (Remaining Series Principal Amounts to Collections Account for the DCMT for Reinvestment in New Receivables) of
Section 3.01 of the Indenture Supplement for the DiscoverSeries (and any comparable step under any other Indenture Supplement, as applicable) shall be withdrawn from the Series Distribution Account and deposited into the Collections Account.

 (20) All remaining amounts in the Series Distribution Account shall be paid to the Indenture Trustee for application in accordance with
the Indenture and each applicable Indenture Supplement. 
 (21) 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 Transferor Interest and 

  

	 	(y)	the amount on deposit in the Collections Account 

  
 22 

 shall be paid to the Holder of the Transferor 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. 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 (including, without limitation, its servicing activities as Calculation Agent under the Indenture), the Master Servicer
shall be entitled to receive the Investor Servicing Fees 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. The Investor Servicing Fees shall be paid to the Master Servicer on each Distribution Date pursuant to the terms hereof and the Indenture and each applicable Indenture Supplement. 

SECTION 11. Investor Certificateholders’ Monthly Statement. On each Statement Date, a statement substantially in the
form of Exhibit B as prepared by the Trustee (based on information provided by the Master Servicer) setting forth the information listed thereon shall be available to the Investor Certificateholder and to any holder of Notes from the Trustee
and each Paying Agent. 
 SECTION 12. Purchase of Notes; Sales of Receivables. 

(a) The Indenture Supplement for the DiscoverSeries and any additional Indenture Supplement issued with respect to any Notes may provide that
if, as of any Distribution Date (after giving effect to any payments calculated pursuant to Section 3.01 or an equivalent section of the applicable Indenture Supplement made on such Distribution Date), the Outstanding Dollar Principal Amount
with respect to any series, class or Tranche of Notes is less than or equal to 5% of the Initial Principal Dollar Amount of each corresponding Tranche or Tranches of Notes, the Transferor, or an Affiliate of the Transferor, may elect to repurchase
such series, class or Tranche of Notes. In the event of such election, the Calculation Agent shall request that Discover Funding, as Holder of the Transferor Certificate, purchase and cancel a portion of the Series Investor Interest equal to the
product of (x) the Nominal Liquidation Amount of such series, class or Tranche of Notes and (y) the Series 2007-CC Collateral Certificate Percentage (such portion, the “Clean-Up Call Amount”) by depositing into the Series
Distribution Account, on the immediately succeeding Distribution Date, an amount equal to the Clean-Up Call Amount. If Discover Funding as Holder of the Transferor Certificate deposits the Clean-Up Call Amount into the Series Distribution Account,
the Master Servicer shall direct the Trustee in writing to withdraw the Clean-Up Call Amount from the Series Distribution Account and pay such amount to the Indenture Trustee for distribution in accordance with the applicable Indenture Supplement.

 (b) If there has been an Event of Default and acceleration of any series, class or Tranche of Notes under the Indenture, and the
Indenture Trustee is directed to cause the sale of Receivables in accordance with Section 705 of the Indenture and the provisions of the applicable Indenture Supplement, or if the applicable Indenture Supplement otherwise authorizes the
Indenture Trustee (in its discretion) to cause a sale and any conditions precedent thereto have been satisfied, the Indenture Trustee shall notify the Trustee of the amount of Receivables to be 

  
 23 

 
sold, which shall equal the Nominal Liquidation Amount of each affected series, class or Tranche, as applicable, plus accrued interest thereon multiplied by the Series 2007-CC Collateral
Certificate Percentage (the “Receivables Sale Amount”). Receivables (or interests therein) in an amount equal to the Receivables Sale Amount shall be sold on behalf of the Trust by an institution acceptable to the Trustee, the Indenture
Trustee and the Master Servicer that is either (i) a nationally recognized investment bank, (ii) a nationally recognized commercial bank or (iii) any other institution whose regular business includes the sale of receivables similar to
the Receivables in the Trust; provided, however, that in no event shall the amount of Receivables sold hereunder with respect to any series, class or Tranche, as applicable, exceed the product of (A) the aggregate amount of Receivables
in the Trust and (B) a fraction the numerator of which is the product of the Nominal Liquidation Amount of such series, class or Tranche, as applicable, and the Series 2007-CC Collateral Certificate Percentage, and the denominator of which is
the Aggregate Investor Interest, in each case, as of the close of business on the last day of the Due Period immediately preceding the month in which such Receivables sale occurs; and provided, further, the Receivables selected to be sold
hereunder shall not be materially different from the Receivables remaining in the Trust as of such selection date and shall be selected at random from the Receivables. The proceeds (the “Receivables Sale Proceeds”) therefrom shall
be paid to the Trust and immediately deposited into the Series Distribution Account and paid to the Indenture Trustee immediately following such deposit. Such payment shall be deemed to be the final distribution with respect to the affected Tranche.
No Originator and no affiliate or agent of any Originator shall be permitted to bid for or purchase Receivables pursuant to this Section 12(b); provided, however, that an affiliate or agent of any Originator may act as selling
institution for the sale as specified in the first sentence of this Section 12(b), so long as such affiliate or agent does not act as principal in connection with such sale. 

SECTION 13. 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 14. 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 15.
Governing Law. This Series Supplement and all disputes arising out of or relating to it shall be construed in accordance with the internal laws of the State of New York, without reference to its conflict of law provisions that would result in
the application of the law of any state other than New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. 

SECTION 16. 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 (unless otherwise required under applicable law). The parties intend the sale, transfer,
assignment or conveyance of Receivables in connection herewith to be treated as a sale for accounting purposes. 

  
 24 

 SECTION 17. Amendment for Sale Accounting Purposes. If the Transferor determines that
(i) an amendment to this Agreement or the Pooling and Servicing Agreement is necessary or desirable for such Transferor to maintain or establish sale accounting treatment under then-applicable financial accounting standards, and (ii) the
Transferor 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 Transferor, 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 Rating Agency Condition shall have been satisfied. 

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 17 in the Series Supplements for other Series then outstanding (except that Investor Certificates beneficially owned by the Transferor or any affiliate or agent of the Transferor will not be included in any
such calculation). 
 SECTION 18. 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 An. tit. 6, § 2701 A 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 Transferor; (2) the Transferor, its creditors or, in any insolvency proceeding with respect to the Transferor or the Transferor’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 Transferor any of the Transferred
Assets; and (3) in the event of a bankruptcy, receivership or other insolvency proceeding with respect to the Transferor or the Transferor’s property, such Transferred Assets shall not be deemed to be part of the Transferor’s
property, assets, rights or estate. 
 SECTION 19. Increases to Series Investor Interest. In connection with any issuance of
Notes, Discover Funding shall transfer to the Note Issuance Trust an additional fractional undivided interest in the assets of the Trust as represented by an increase in the Series Investor Interest for the Series 2007-CC Collateral Certificate from
time to time, subject to the satisfaction of the conditions described below: 
 (a) The Calculation Agent shall have notified Discover
Funding, as Holder of the Transferor Certificate, of the issuance of such Notes and Discover Funding shall have 

  
 25 

 
notified the Calculation Agent of its intention to transfer to the Note Issuance Trust an additional fractional undivided interest in the assets of the Trust as represented by an increase in the
Series Investor Interest in an amount equal to the product of (i) the Nominal Liquidation Amount of any Notes to be issued by the Note Issuance Trust and (ii) the percentage of the Nominal Liquidation Amount of such Notes to be allocated
to the Series 2007-CC Collateral Certificate, as determined by Discover Funding as beneficiary of the Note Issuance Trust; 
 (b) Discover
Funding, as Holder of the Transferor Certificate, shall have received an amount equal to (i) the issuance proceeds received by the Note Issuance Trust in connection with the corresponding issuance of Notes, multiplied by the percentage
of the Nominal Liquidation Amount of such Notes to be allocated to the Series 2007-CC Collateral Certificate, minus (ii) the sum of (x) any issuance expenses relating to such notes multiplied by the percentage of the Nominal
Liquidation Amount of such Notes to be allocated to the Series 2007-CC Collateral Certificate and (y) any amounts required to be retained in any reserve account or subaccount for the Note Issuance Trust in connection with such issuance of
Notes, multiplied by the percentage of the Nominal Liquidation Amount of such Notes to be allocated to the Series 2007-CC Collateral Certificate; 

(c) Discover Funding, as Holder of the Transferor Certificate, shall have notified the Trustee, in writing, at least one business day in
advance of the date upon which the Series Investor Interest is to be increased, which notice shall state the amount of such increase in the Series Investor Interest; 

(d) The Transferor shall have delivered to the Trustee written confirmation from the Rating Agencies that they will not, as a result of the
increase, reduce the rating below the Required Rating of any Class of any Series outstanding at the time of the increase; and 
 (e)
Discover Funding, as Holder of the Transferor Certificate, shall not be required to designate Additional Accounts or convey a Participation interest to the Trust pursuant to Section 2.10(a) of the Pooling and Servicing Agreement as a result of
such increase. 
 Upon any increase in the Series Investor Interest the Trustee shall make appropriate entries in the certificate registrar
for the Series 2007-CC Collateral Certificate in the amount of the increase. 
 SECTION 20. Amendments for Additional Collateral
Certificates. Concurrently with the effectiveness of any documents relating to the assignment of any Additional Collateral Certificates (or, if applicable, direct interests in pools of credit card receivables) to the Note Issuance Trust, the
parties hereto may amend this agreement without notice to or the consent of any Investor Certificateholder (or the holders of any series, class or Tranche of Notes then outstanding) to the extent necessary to reflect any changes in the definitions
of “Series Excess Spread” and “Series Investor Interest” set forth herein, and to otherwise reflect any allocations or other provision with respect to the Notes or such Additional Collateral Certificates (or, if applicable,
direct interests in pools of credit card receivables) subject to the condition that Discover Funding as Holder of the Transferor Certificate shall have been notified by the Rating Agencies that such amendment would not result in the lowering or
withdrawal of the rating below the Required Rating of any Class of any Series then outstanding. 

  
 26 

 SECTION 21. Dispute Resolution. 

(a) If Discover Funding fails to repurchase a Receivable pursuant to Section 2.07 of the Pooling and Servicing Agreement within 180 days
of the related Receivable Repurchase Event, the Issuer, the Trustee (acting on behalf and at the direction of any Certificateholder) or the Indenture Trustee (acting on behalf and at the direction of any Verified Note Owner) (in such capacity, the
“Requesting Party”) will have the right to refer the matter, at its discretion, to either mediation (including non-binding arbitration) or arbitration pursuant to this Section 21; provided, however, that
any such referral shall be made within [90] days of the delivery of the monthly statement following the end of such 180 day period; provided, further, that if the Trustee or the Indenture Trustee is the Requesting Party, the selection of mediation
or arbitration shall be made by the directing Certificateholder(s) or Verified Note Owner(s), respectively. 
 (b) The Requesting Party will
provide notice in accordance with the provisions of Section 13.05 of the Pooling and Servicing Agreement of its intention to refer the matter to mediation (including non-binding arbitration) or arbitration, as applicable, to Discover Funding,
with a copy to the Note Issuance Trust, the Trustee and the Indenture Trustee. Discover Funding agrees to the resolution method selected by the Requesting Party. Discover Funding shall provide notice to Discover Bank, the Note Issuance Trust, the
Trustee and the Indenture Trustee that Discover Funding has received a request to mediate or arbitrate a repurchase request. Upon receipt of such notice, the Issuer, the Trustee (acting on behalf and at the direction of any Certificateholder) and
the Indenture Trustee (acting on behalf and at the direction of any Verified Note Owner), as applicable, shall have [thirty (30)] days to advise the Requesting Party and Discover Funding of an intent to join in the mediation or arbitration, which
shall result in their being joined as a Requesting Party in the proceeding. Any settlement reached in a mediation and any decision by an arbitrator shall be binding upon the Issuer, the Trustee (on behalf of the Certificateholders) and the Indenture
Trustee (on behalf of the Note Owners) (regardless of whether any such party has joined the proceeding in accordance with the preceding sentence) with respect to the Receivable that is the subject matter of the repurchase request. Issues relating to
any such Receivable may not be re-litigated by them or the subject of a subsequent repurchase request in mediation, arbitration, court or otherwise. 

(c) If the Requesting Party selects mediation as the resolution method, the following provisions will apply: 

(i) The mediation will be administered by [a nationally recognized arbitration and mediation association] pursuant to such association’s
mediation procedures in effect at such time. 
 (ii) The fees and expenses of the mediation will be allocated as mutually agreed by the
parties as part of the mediation. 
 (iii) The mediator will be appointed from a roster of neutrals maintained by the American Arbitration
Association (the “AAA”) and must be an attorney admitted to practice in the State of New York and have at least [15] years of experience in commercial litigation and, if possible, consumer finance or asset-backed securitization
matters. 

  
 27 

 (d) If the Requesting Party selects arbitration as the resolution method, the following
provisions will apply: 
 (i) The arbitration will be administered by [a nationally recognized arbitration and mediation association], and
conducted pursuant to such association’s arbitration procedures in effect at such time. 
 (ii) The arbitrator will be appointed from
a roster of neutrals maintained by AAA and must be an attorney admitted to practice in the State of New York and have at least [15] years of experience in commercial litigation and, if possible, consumer finance or asset-backed securitization
matters. 
 (iii) The arbitrator will make its final determination no later than [90] days after appointment or as soon as practicable
thereafter. The arbitrator will resolve the dispute in accordance with the terms of this Agreement and the Pooling and Servicing Agreement, and may not modify or change this Agreement or the Pooling and Servicing Agreement in any way. The arbitrator
will not have the power to award punitive damages or consequential damages in any arbitration conducted by it, and Discover Funding shall not be required to pay more than the amount required under Section 2.07 of the Pooling and Servicing
Agreement plus any fees and expenses related to the arbitration with respect to any Receivable which such Requested Party is required to repurchase under the terms of the Pooling and Servicing Agreement. In its final determination, the arbitrator
will determine and award the costs of the arbitration (including the fees of the arbitrator, cost of any record or transcript of the arbitration, and administrative fees) and reasonable attorneys’ fees to the parties as determined by the
arbitrator in its reasonable discretion. The determination of the arbitrator will be in writing and counterpart copies will be promptly delivered to the parties. The determination will be final and non-appealable absent manifest error and may be
enforced in any court of competent jurisdiction. 
 (iv) By selecting arbitration, the Requesting Party is waiving the right to sue in
court, including the right to a trial by jury. 
 (v) No person may bring a putative or certified class action to arbitration. 

(e) The following provisions will apply to both mediations and arbitrations: 

(i) Any mediation or arbitration will be held in [New York, New York] or such other location mutually agreed to by the Requesting Party and
Discover Funding; 
 (ii) Notwithstanding this dispute resolution provision, the parties will have the right to seek provisional relief
from a competent court of law, including a temporary restraining order, preliminary injunction or attachment order, provided such relief would otherwise be available by law; 

(iii) Each ADR Proceeding, including the occurrence of such ADR Proceeding, the nature and amount of any relief sought or granted and the
results of any discovery taken in such ADR Proceeding, shall be kept strictly confidential by each of Discover 

  
 28 

 
Funding and the Requesting Party (including any Certificateholders and Verified Note Owners that may be directing the Trustee and/or Indenture Trustee), except as necessary in connection with a
judicial challenge to or enforcement of an award, or as otherwise required by law. The Trustee and the Indenture Trustee shall have no obligation to provide any Certificateholder or Note Owner (other than any Certificateholder or Verified Note Owner
directing the Trustee’s or Indenture Trustee’s actions pursuant to this Section 21) with any information that it receives with respect to an ADR Proceeding by virtue of its being a Requesting Party. 

(iv) Any expenses incurred by the Trustee or Indenture Trustee acting as the Requesting Party pursuant to this Section 21 shall
be subject to reimbursement pursuant to the terms set forth in Section 11.05 of the Pooling and Servicing Agreement and Section 806 of the Indenture, as applicable. 

SECTION 22. Asset Representations Review. Discover Funding shall (i) cooperate with procedures for a review of the
representations and warranties to be tested pursuant to the Asset Representations Review Agreement, and (ii) provide the Asset Representations Reviewer with reasonable access to Discover Funding’s offices and information databases upon the
initiation of an Asset Representations Review as set forth in Section 715 of the Indenture. 
 SECTION 23. Effectiveness.
This Series Supplement amends and restates the Original Series 2007-CC Supplement as of the Effective Date. Prior to the Effective Date, the Original Series 2007-CC Supplement shall remain in full force and effect and is in all respects ratified and
confirmed. Upon the effectiveness of this Series Supplement on the Effective Date, the terms and provisions of the Original Series 2007-CC Supplement shall be restated in their entirety (other than as set forth in Section 2.01(d) of the Pooling
and Servicing Agreement) and each reference to the Original Series 2007-CC Supplement in any other document, instrument or agreement shall mean a reference to this Series Supplement. 

  
 29 

 IN WITNESS WHEREOF, the Transferor, the Master Servicer, the Servicer 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 Master Servicer and Servicer
	
	  

	Michael F. Rickert
	Vice President, Chief Financial Officer and Treasurer
	
	 DISCOVER FUNDING LLC,
 as
Transferor

	
	  

	
	 U.S. BANK NATIONAL ASSOCIATION,
 as
Trustee

	
	  

	Edwin Janis
	Vice President

 EXHIBIT A 

Form of Series 2007-CC Investor Certificate 

 EXHIBIT B 

Form of investor Certificateholders’ Monthly Statement 

Discover Card Master Trust I 

Series 2007-CC Monthly Statement 

 Exhibit B 

Form of Investor Certificateholders’ Monthly Statement 

Discover Card Master Trust I 

Series 2007-CC Monthly Statement 
  

					
	Distribution Date:                  ,         	 		  	Month Ending:                  ,         

 Pursuant to the Series Supplement dated as of [December 1], 2015, as amended, (the “Series Supplement”) relating to
the Third Amended and Restated Pooling and Servicing Agreement dated as of [December 1], 2015, as amended, by and between Discover Bank and U.S. Bank National Association as Trustee (the “Pooling and Servicing Agreement”), the Trustee is
required to prepare certain information each month regarding current distributions to investors and the performance of Discover Card Master Trust I (the “Master Trust”). We have set forth below this information and certain other
information required under the Securities Exchange Act of 1934, as amended, for the Distribution Date listed above, as well as for the calendar month ended on the date listed above. Capitalized terms used in this report without definition have the
meanings given to them in the Pooling and Servicing Agreement and the Series Supplement. The Pooling and Servicing Agreement and the Series Supplement were filed with the Securities and Exchange Commission as follows: 

 

			
	Third Amended and Restated Pooling and Servicing Agreement	  	As Exhibit [    ] to the [            ] filed on [            ] under the file number
[            ], as amended.
		
	Series Supplement	  	As Exhibit [    ] to the [            ] filed on [            ] under the file number
[            ], as amended.

  

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

  

											
	 	 	 	  	Beginning
Principal Balance	 	  	Ending
Principal Balance	 
	 (a)
	 	 Aggregate Investor Interest (including Series 2007-CC Investor Interest)
	  	$	            	  	  	$	            	  
				
		 	 Seller Interest
	  	$	            	  	  	$	            	  
				
		 	 Total Master Trust
	  	$	            	  	  	$	            	  
				
	 (b)
	 	 Group One Investor Interest
	  	$	            	  	  	$	            	  
				
	 (c)
	 	 Series 2007-CC Investor Interest
	  	$	            	  	  	$	            	  
				
	 (d)
	 	 Total Master Trust # of Accounts
	  				  			
			
	 (e)
	 	 Minimum Principal Receivables Balance at the End of Month 1
	   
	  	$	                	  
			
	 (f)
	 	 Amount by which Master Trust Receivables Exceeded the Minimum Principal Receivables Balance at the End of Month
	    
	  	$	            	  
			
	 (g)
	 	 Percentage of the principal receivables that reflect Seller Interest
	   
	  	 	    	% 

  

	2.	Allocation Percentages at the beginning of [Month][Year] (after giving effect to any increases in the Aggregate Investor Interest or the Series 2007-CC Investor Interest occurring during the month)

  

							
	 (a)
	  	 Series 2007-CC Finance Charge Collections Allocation Percentage
	  	 	    	% 
			
	 (b)
	  	 Series 2007-CC Principal Collections Allocation Percentage
	  	 	    	% 
			
	 (c)
	  	 Series 2007-CC Charge-Off Allocation Percentage
	  	 	    	% 
			
	 (d)
	  	 Series 2007-CC Interchange Allocation Percentage
	  	 	    	% 

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

  

															
	 	  	 	  	Finance Charge
Collections	 	 	Principal
Collections	 	  	Interchange	 
	 (a)
	  	 Allocation between Investors and Seller:
	  				 				  			
					
		  	 Aggregate Investor Allocation (including Series 2007-CC Allocation)
	  	$	            	  	 	$	            	  	  	$	            	  
					
		  	 Seller Allocation
	  	$	            	  	 	$	            	  	  	$	            	  
					
	 (b)
	  	 Group One Allocation
	  	$	            	  	 	$	            	  	  	$	            	  
					
	 (c)
	  	 Series 2007-CC Allocation
	  	$	            	  	 	$	            	  	  	$	            	  
					
	 (d)
	  	 Reallocation to Series 2007-CC from Other Series
	  	$	            	  	 	$	            	  	  	$	            	  
					
	 (e)
	  	 Reallocation from Series 2007-CC to Other Series
	  	$	            	  	 	$	            	  	  	$	            	  
					
	 (f)
	  	 Group One Portfolio Yield, as an annualized percentage of the Aggregate Investor Interest (FCC yield excludes principal
recoveries)
	  	 	    	% 	 	 	N/A	  	  	 	    	% 
					
	 (g)
	  	 Series 2007-CC Portfolio Yield, as an annualized percentage of the Series Investor Interest (FCC yield excludes principal
recoveries)
	  	 	    	% 	 	 	N/A	  	  	 	    	% 
			
	 (h)
	  	 Principal Collections as a monthly percentage of Master Trust Receivables at the beginning of [Month][Year]
	    
	  	 	    	% 
			
	 (i)
	  	 Finance Charge Collections as a monthly percentage of Master Trust Receivables at the beginning of [Month][Year]
	    
	  	 	    	% 
			
	 (j)
	  	 Total Collections as a monthly percentage of Master Trust Receivables at the beginning of [Month][Year]
	    
	  	 	    	% 
			
	 (k)
	  	 Interchange as a monthly percentage of Master Trust Receivables at the beginning of [Month][Year]
	    
	  	 	    	% 
			
	 (l)
	  	 Total Collections and Interchange as a monthly percentage of Master Trust Receivables at the beginning of
[Month][Year]
	    
	  	 	    	% 
				
	 	  	 	 	 	Prior Month	 	  	[Month][Year]	 
	 (m)
	  	 Trust Collections deposited for the month 2
	   
	 	$	            	  	  	$	            	  

  

	4.	Investor Charged-Off Amount 

  

											
	 	  	 	  	[Month][Year]	 	 	Cumulative
Reductions in
Series Investor
Interests Due to
Unreimbursed
Investor
Charged-off
Amounts	 
	 (a)
	  	 Group One
	  	$	            	  	 	$	            	  
				
	 (b)
	  	 Series 2007-CC
	  	$	            	  	 	$	            	  
				
	 (c)
	  	 As an annualized percentage of Principal Receivables at the Beginning of [Month][Year]
	  	 	    	% 	 	 	N/A	  

 
  

	5.	Investor Monthly Servicing Fee payable to Discover Bank on this Distribution Date 

  

							
	 (a)
	  	 Group One
	  	$	            	  
	 (b)
	  	 Series 2007-CC
	  	$	            	  

  

	6.	Delinquency Summary 

  

							
	 (a)
	  	 Master Trust Receivables Outstanding at the end of [Month][Year]
	  	$	            	  

  

											
	Payment Status	  	Number of
Delinquent
Accounts	  	Delinquent
Amount Ending
Balance	 	  	Percentage of
Ending
Receivables
Outstanding	 
	 30 – 59 days
	  		  	$	            	  	  	 	    	% 
				
	 60 – 89 days
	  		  	$	            	  	  	 	    	% 
				
	 90 – 119 days
	  		  	$	            	  	  	 	    	% 
				
	 120 – 149 days
	  		  	$	            	  	  	 	    	% 
				
	 150 – 179 days
	  		  	$	            	  	  	 	    	% 
				
	 180+ days
	  		  	$	            	  	  	 	    	% 
		  	  
	  	  
	  
	 	  	  
	  
	 
				
	 Total
	  		  	$	            	  	  	 	    	% 
		  	  
	  	  
	  
	 	  	  
	  
	 

  

	 	(b)	Delinquency Percentage: [    ]% 

  
 B-2 

	7.	Investor Principal Charge-Offs on this Distribution Date 3 

  

											
	 	  	 	  	Amount	 	  	Rate	 
	 (a)
	  	 Gross Charge-offs (rate shown as an annualized percentage of Investor Principal Receivables at the Beginning of [Month][Year])
	  	$	            	  	  	 	    	% 
				
	 (b)
	  	 Recoveries (rate shown as an annualized percentage of Investor Principal Receivables at the Beginning of [Month][Year])
	  	$	            	  	  	 	    	% 
				
	 (c)
	  	 Net Charges-offs (rate shown as an annualized percentage of Investor Principal Receivables at the Beginning of [Month][Year])
	  	$	            	  	  	 	    	% 

  

	1 	The Discover Card Master Trust I is required to maintain Principal Receivables greater than or equal to the Minimum Principal Receivables Balance. The Minimum Principal Receivables Balance is generally calculated by
dividing the Investor Interest by 93%. If the Principal Receivables in the Master Trust are less than the Minimum Principal Receivables Balance, and Discover Bank fails to assign sufficient Receivables to eliminate the deficiency, then an
amortization event would occur. This would also cause an early redemption event for the notes issued by Discover Card Execution Note Trust. 

	2 	Only the portion of Master Trust Collections required to be deposited under the Master Trust’s Required Daily Deposit provisions will typically be deposited in the Master Trust Collections Account each month, and
these required amounts may vary markedly from month to month depending on whether any - Notes (or Certificates) are maturing on the following distribution date (in which case additional Principal Collections are retained in such account).
Accordingly, the amount deposited in the account is not meaningful as an indicator of Master Trust performance. 

	3 	For purposes of allocations to investors, all recoveries are treated as Finance Charge Collections and are included as such in Item 3 above. 

  
 B-3tph-ex101_12.htm

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the "Agreement") is entered into as of  November 19, 2015 (the "Effective Date"), by and between Douglas F. Bauer ("Executive") and TRI Pointe Group, Inc.  (the "Company").

Whereas, Executive is currently employed by Company as its Chief Executive Officer, and Company desires to have Executive's employment continue in such capacity, and Executive desires to continue to serve in such capacity, pursuant to the terms and conditions set forth in this Agreement.

Now, Therefore, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

ARTICLE I
DEFINITIONS

For purposes of the Agreement, the following terms are defined as follows:

1.1."Board" means the Board of Directors of the Company.

1.2."Cause" means any of the following events:  (i) Executive's willful failure to follow the reasonable and lawful directions of the Board; (ii) conviction of a felony (or a plea of guilty or nolo contendere by the Executive to a felony); (iii) acts of fraud, dishonesty or misappropriation committed by the Executive and intended to result in substantial personal enrichment at the expense of the Company; (iv) willful misconduct by the Executive in the performance of the Executive's material duties required by this Agreement which is likely to materially damage the financial position or reputation of the Company; or (v) a material breach of this Agreement.  The foregoing is an exclusive list of the acts or omissions that shall be considered "Cause" provided, however, with respect to the acts or omissions set forth in clauses (i), (iii), (iv) and (v) above, (x) the Board shall provide the Executive with 30 days advance written notice detailing the basis for the termination of employment for Cause, (y) during the 30 day period after the Executive has received such notice, the Executive shall have an opportunity to cure such alleged Cause events and to present his case to the full Board (with the assistance of his own counsel) before any termination for Cause is finalized by a vote of a majority of the Board and (z) the Executive shall continue to receive the compensation and benefits provided by this Agreement during the 30 day cure period; provided, further, no act or failure to act of Executive shall be willful or intentional if performed in good faith with the reasonable belief that the action or inaction was in the best interest of the Company.

1.3."Change in Control" means (i) the acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1986, as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its Subsidiaries, or any employee benefit plan (or related trust) of the Company or its Subsidiaries, or any entity with 

 

 

respect to which, following such acquisition, more than 65% of, respectively, the then outstanding equity of such entity and the combined voting power of the then outstanding voting equity of such entity entitled to vote generally in the election of all or substantially all of the members of such entity's governing body is then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners, respectively, of the Common Stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of Common Stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or (ii) the consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Common Stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation; or (iii) a complete liquidation or dissolution of the Company or the sale or other disposition of all or substantially all of the assets of the Company. 

Notwithstanding the foregoing, (i) any bona fide primary or secondary public offering shall not constitute a Change in Control and (ii) if a Change in Control constitutes a payment event with respect to any payment or benefit that provides for the deferral of compensation and is subject to Section 409A, the Change in Control transaction or event with respect to such payment or benefit must also constitute a "change in control event," as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section 409A.

1.4."COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

1.5."Code" means the Internal Revenue Code of 1986, as amended.

1.6."Company" means TRI Pointe Group, Inc. or any successor thereto.

1.7."Covered Termination" means (a) an Involuntary Termination Without Cause or (b) a voluntary termination for Good Reason.  For the avoidance of doubt, neither (i) the termination of Executive's employment as a result of Executive's death or Disability nor (ii) the expiration of this Agreement due to non-renewal pursuant to the terms of Section 2.2 of this Agreement will be deemed to be a Covered Termination.

1.8."Disability" shall mean a termination of Executive's employment due to Executive's absence from Executive's duties with the Company on a full-time basis for at least 180 consecutive days as a result of Executive's incapacity due to physical or mental illness which is determined to be total and permanent by a physician selected by the Company or its insurers.

1.9."Good Reason" means any of the following are undertaken without Executive's prior written consent:  (a) a material diminution in Executive's authority, duties, or responsibilities which 

 

 

substantially reduces the nature or character of Executive's position with the Company; (b) a reduction by the Company of Executive's base salary as in effect immediately prior to such reduction; (c) a material reduction by the Company of Executive's Target Bonus as in effect immediately prior to such reduction; (d) relocation of Executive's principal office (defined as a relocation of Executive's principal office to a location that increases Executive's one-way commute by more than fifty (50) miles), provided, that, for the avoidance of doubt, reasonable required travel by Executive on the Company's business shall not constitute a relocation; or (e) any material breach by the Company of any provision of this Agreement.  Notwithstanding the foregoing, Executive's resignation shall not constitute a resignation for "Good Reason" as a result of any event described in the preceding sentence unless (A) Executive provides written notice thereof to the Company within thirty (30) days after the first occurrence of such event, (B) to the extent correctable, the Company fails to remedy such circumstance or event within thirty (30) days following the Company's receipt of such written notice and (C) the effective date of Executive's resignation for "Good Reason" is not later than ninety (90) days after the initial existence of the circumstances constituting Good Reason. 

1.10."Involuntary Termination Without Cause" means Executive's dismissal or discharge by the Company other than for Cause.  

1.11."Section 409A" means Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.

1.12."Separation from Service" means Executive's termination of employment constitutes a "separation from service" within the meaning of Treasury Regulation Section 1.409A-1(h).

ARTICLE II
EMPLOYMENT BY THE COMPANY

2.1.Position and Duties.  Subject to terms set forth herein, Executive shall continue to serve in an executive capacity and shall continue to perform such duties as are customarily associated with the position of Chief Executive Officer and such other duties as are assigned to Executive by the Board.  Executive shall also continue to serve as a member of the Board, and, while Executive is employed hereunder, the Company shall nominate Executive for reelection as a member of the Board at the end of each Board term.  During the term of Executive's employment with the Company, Executive will devote Executive's best efforts and substantially all of Executive's business time and attention (except for vacation periods and reasonable periods of illness or other incapacities permitted by the Company's general employment policies or as otherwise set forth in this Agreement) to the business of the Company.  

2.2.Term.  The initial term of this Agreement shall commence on the Effective Date and shall terminate on the earlier of (i) the third anniversary of the Effective Date and (ii) the termination of Executive's employment under this Agreement.  On the third anniversary of the Effective Date and each annual anniversary of such date thereafter (in either case, provided Executive's employment has not been terminated under this Agreement prior thereto), this Agreement shall automatically be extended for one additional year unless either Executive or the Company gives written notice of non-renewal to the other at least 60 days prior to the automatic extension date.  If a Change in 

 

 

Control occurs during the initial or an extended term of this Agreement, the term of this Agreement shall, notwithstanding anything to the contrary in this Agreement, continue in effect for a period of not less than eighteen (18) months beyond the month in which the Change in Control occurred.  The period from the Effective Date until the earlier of (i) termination of Executive's employment under this Agreement and (ii) the expiration of this Agreement due to non-renewal pursuant to this Section 2.2 is referred to as the "Term."   

2.3.Employment at Will.  Both the Company and Executive shall have the right to terminate Executive's employment with the Company at any time, with or without cause, and with or without prior notice.  Upon certain terminations of Executive's employment with the Company, Executive may become eligible to receive the severance benefits provided in Article IV of this Agreement.

2.4.Employment Policies.  The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company, including those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control.

ARTICLE III
COMPENSATION

3.1.Base Salary.  As of the Effective Date, Executive shall receive for services to be rendered hereunder an annual base salary of $600,000 ("Base Salary"), payable on the regular payroll dates of the Company (but no less often than monthly), subject to increase in the sole discretion of the Board or a committee of the Board.

3.2.Annual Bonus.  For each calendar year ending during the term of Executive's employment, Executive shall be eligible to receive an annual performance bonus (the "Annual Bonus") targeted at one-hundred and ten percent (110%) of Base Salary (the "Target Bonus"), on such terms and conditions determined by the Board or a committee of the Board.  The actual amount of any Annual Bonus (if any) will be determined in the discretion of the Board or a committee of the Board and will be (a) subject to achievement of any applicable bonus objectives and/or conditions determined by the Board or a committee of the Board, (b) subject to Executive's continued employment with the Company through the date the Annual Bonus is paid, which shall be at the same time as bonuses other Company executives are paid related annual bonuses generally, but in no event later than March 15th of the year following the year to which such Annual Bonus relates.

3.3.Standard Company Benefits.  During the Term, Executive shall be entitled to all rights and benefits for which Executive is eligible under the terms and conditions of the standard Company benefits and compensation practices that may be in effect from time to time and are provided by the Company to its executive employees generally, as well as any additional benefits provided to Executive consistent with past practice.  Notwithstanding the foregoing, this Section 3.3 shall not create or be deemed to create any obligation on the part of the Company to adopt or maintain any benefits or compensation practices at any time.

3.4.Paid Time Off.  During the Term, Executive shall be entitled to such periods of paid time off ("PTO") each year as provided from time to time under the Company's PTO policy and as 

 

 

otherwise provided for executive officers, as it may be amended from time to time, but notwithstanding anything to the contrary in this Agreement, Executive shall be entitled to a minimum of twenty (20) vacation days per year (prorated for any partial year). 

3.5.Equity Awards.  Executive will be eligible to receive stock options and other equity incentive grants as determined by the Board or a committee of the Board in its sole discretion.

ARTICLE IV
SEVERANCE AND CHANGE IN CONTROL BENEFITS

4.1.Severance Benefits.  Upon Executive's termination of employment, Executive shall receive any accrued but unpaid Base Salary and other accrued and unpaid compensation, including any accrued but unpaid vacation and Annual Bonus that has been earned with respect to any calendar year ending prior to Executive's termination date, but remains unpaid as of the date of the termination.  If the termination is due to a Covered Termination, provided that Executive delivers an effective general release of all claims against the Company and its affiliates in a form acceptable to the Company (a "Release of Claims") that becomes effective and irrevocable within sixty (60) days following the Covered Termination, Executive shall be entitled to receive the severance benefits described in Section 4.1(a) or (b), as applicable.  If the termination is due to Executive's death or Disability, provided that Executive (or Executive's beneficiaries or estate) delivers an effective Release of Claims that becomes effective and irrevocable within sixty (60) days following such termination of employment, Executive shall be entitled to receive the severance benefits described in Section 4.1(c).  

(a)Covered Termination Not Related to a Change in Control.  If Executive's employment terminates due to a Covered Termination which occurs prior to a Change in Control or more than eighteen (18) months after a Change in Control, Executive shall receive the following:

(i)An amount equal to two times the sum of (i) Executive's Base Salary at the rate in effect (or required to be in effect before any diminution that is the basis of Executive's termination for Good Reason) at the time of Executive's termination of employment and (ii) the greater of (A) the average of the annual cash bonuses received by Executive for the two fiscal years ending before the date of Executive's termination of employment and (B) Executive's target annual bonus for the year in which the date of Executive's termination of employment occurs, payable in a lump sum payment, less applicable withholdings, as soon as administratively practicable following the date on which the Release of Claims becomes effective and, in any event, no later than the sixtieth (60th) day following the date of the Covered Termination.

(ii)If Executive elects to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive's covered dependents through the earlier of (i) the eighteen (18) month anniversary of the date of Executive's termination of employment and (ii) the date Executive and Executive's covered dependents, if any, become eligible for healthcare coverage under another employer's plan(s).  Notwithstanding the foregoing, (i) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is otherwise unable to continue to cover 

 

 

Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.  After the Company ceases to pay premiums pursuant to this Section 4.1(a)(ii), Executive may, if eligible, elect to continue healthcare coverage at Executive's expense in accordance the provisions of COBRA. 

(b)Covered Termination Related to a Change in Control.  If Executive's employment terminates due to a Covered Termination that occurs during the eighteen (18) month period commencing on a Change in Control, Executive shall receive the following:

(i)An amount equal to three times the sum of (i) Executive's Base Salary at the rate in effect (or required to be in effect before any diminution that is the basis of Executive's termination for Good Reason) at the time of Executive's termination of employment and (ii) the greater of (A) the average of the annual cash bonuses received by Executive for the two fiscal years ending before the date of Executive's termination of employment and (B) Executive's target annual bonus for the year in which the date of Executive's termination of employment occurs, payable in a lump sum payment, less applicable withholdings, as soon as administratively practicable following the date on which the Release of Claims becomes effective and, in any event, no later than the sixtieth (60th) day following the date of the Covered Termination.

(ii)If Executive elects to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive's covered dependents through the earlier of (i) the eighteen (18) month anniversary of the date of Executive's termination of employment and (ii) the date Executive and Executive's covered dependents, if any, become eligible for healthcare coverage under another employer's plan(s).  Notwithstanding the foregoing, (i) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is otherwise unable to continue to cover Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.  After the Company ceases to pay premiums pursuant to this Section 4.1(b)(ii), Executive may, if eligible, elect to continue healthcare coverage at Executive's expense in accordance the provisions of COBRA.

If there is a dispute as to whether grounds triggering termination with or without Cause or resignation with or without Good Reason have occurred, in each case in connection with a Change in Control, then any fees and expenses arising from the resolution of such dispute (including any reasonably incurred attorneys' fees and expenses of Executive) shall be paid by the Company or its successor, as the case may be; provided, that Executive shall reimburse the Company on a net after-tax basis to cover expenses incurred by Executive for claims brought by Executive that are judicially determined to be frivolous or advanced in bad faith.

(c)Termination Due to Death or Disability.  In the event that Executive's employment is terminated at any time due to Executive's death or Disability, Executive (or 

 

 

Executive's beneficiaries or estate) shall be entitled to receive a pro-rata portion of Executive's Annual Bonus for the fiscal year in which Executive's termination occurs based on actual results for such year (determined by multiplying the amount of the Annual Bonus which would be due for the full fiscal year by a fraction, the numerator of which is the number of days during the fiscal year of termination that Executive is employed by the Company and the denominator of which is 365) payable at the same time bonuses for such year are paid to other senior executives of the Company.   

4.2.280G Provisions.  Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise ("Payment") would (a) constitute a "parachute payment" within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such Payment shall either be (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion the Payment may be taxable under Section 4999 of the Code.  The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The accounting firm shall provide its calculations to the Company and Executive within fifteen (15) calendar days after the date on which Executive's right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.  Any reduction in payments and/or benefits pursuant to this Section 4.2 will occur in the following order:  (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable to Executive.

4.3.Section 409A.

(a)Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of his Separation from Service to be a "specified employee" for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code which would subject Executive to a tax obligation under Section 409A of the Code, such portion of Executive's benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six- month period measured from the date of the Executive's Separation from Service or (ii) the date of Executive's death.  Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 4.3(a) shall be paid in a lump sum to Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

(b)Any reimbursements payable to Executive pursuant to the Agreement shall be paid to Executive no later than 30 days after Executive provides the Company with a written request for reimbursement, and to the extent that any such reimbursements are deemed to constitute 

 

 

"nonqualified deferred compensation" within the meaning of Section 409A of the Code (i) such amounts shall be paid or reimbursed to Executive promptly, but in no event later than December 31 of the year following the year in which the expense is incurred, (ii) the amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and (iii) Executive's right to such payments or reimbursement shall not be subject to liquidation or exchange for any other benefit. 

(c)For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive's right to receive installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.

4.4.Mitigation.  Executive shall not be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer or by any retirement benefits received by Executive after the date of the Covered Termination, or otherwise.

4.5.Equity Coordination.  For the avoidance of doubt, all equity awards, including stock options, restricted stock units and other equity-based compensation granted by the Company to Executive under the Company's equity-based compensation plans shall be subject to the terms of such plans and Executive's equity award agreements with respect thereto.

ARTICLE V
PROPRIETARY INFORMATION OBLIGATIONS

5.1.Agreement.  All Company Innovations shall be the sole and exclusive property of the Company without further compensation and are "works made for hire" as that term is defined under the United States copyright laws.  Executive shall promptly notify the Company of any Company Innovations that Executive solely or jointly Creates.  "Company Innovations" means all Innovations, and any associated intellectual property rights, which Executive may solely or jointly Create, during Executive's employment with the Company, which (i) relate, at the time Created, to the Company's business or actual or demonstrably anticipated research or development, or (ii) were developed on any amount of the Company's time or with the use of any of the Company's equipment, supplies, facilities or trade secret information, or (iii) resulted from any work Executive performed for the Company.  Executive is notified that Company Innovations does not include any Innovation which qualifies fully under the provisions of California Labor Code Section 2870.  "Create" means to create, conceive, reduce to practice, derive, develop or make.  "Innovations" means processes, machines, manufactures, compositions of matter, improvements, inventions (whether or not protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright laws), mask works, trademarks, trade names, trade dress, trade secrets, know-how, ideas (whether or not protectable under trade secret laws), and other subject matter protectable under patent, copyright, moral rights, mask work, trademark, trade secret or other laws regarding proprietary rights, including new or useful art, combinations, discoveries, formulae, manufacturing techniques, technical developments, discoveries, artwork, software and designs.  Executive hereby assigns 

 

 

(and will assign) to the Company all Company Innovations.  Executive shall perform (at the Company's expense), during and after Executive's employment, all acts reasonably deemed necessary or desirable by the Company to assist the Company in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Company Innovations.  Such acts may include execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of patent, copyright, mask work or other applications, (ii) in the enforcement of any applicable Proprietary Rights, and (iii) in other legal proceedings related to the Company's Innovations.  "Proprietary Rights" means patents, copyrights, mask work, moral rights, trade secrets and other proprietary rights.  No provision in this Agreement is intended to require Executive to assign or offer to assign any of Executive's rights in any invention for which Executive can establish that no trade secret information of the Company were used, and which was developed on Executive's own time, unless the invention relates to the Company's actual or demonstrably anticipated research or development, or the invention results from any work performed by Executive for the Company. 

5.2.Remedies.  Executive's duties under this Article V shall survive termination of Executive's employment with the Company and the termination of this Agreement.  Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of Article V, as well as Executive's obligations pursuant to Section 6.2 and Article VII below, would be inadequate, and Executive therefore agrees that the Company shall be entitled to seek injunctive relief in case of any such breach or threatened breach.

ARTICLE VI
OUTSIDE ACTIVITIES

6.1.Other Activities.

(a)Except as otherwise provided in Section 6.1(b), Executive shall not, during the term of this Agreement undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor, unless he obtains the prior written consent of the Board.

(b)Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executive's duties hereunder.  In addition, subject to Executive providing prior written notice to the Board, Executive shall be allowed to serve as a member of the board of directors of one (1) other for-profit entity at any time during the term of this Agreement, so long as such service does not materially interfere with the performance of Executive's duties hereunder; provided, however, that the Board, in its discretion, may require that Executive resign from such director position if it determines that such resignation would be in the best interests of the Company.

6.2.Competition/Investments.  During the term of Executive's employment by the Company and for a period of one (1) year following Executive's termination of employment for any reason, Executive shall not (except on behalf of the Company) directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever which 

 

 

are known by Executive to compete directly with the Company, throughout the world, in any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive's direct holdings in any one such corporation do not, in the aggregate, constitute more than 1% of the voting stock of such corporation.  The provisions of this Section 6.2 shall survive the termination of Executive's employment with the Company and shall be fully enforceable thereafter.  If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 6.2 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.  Company and Executive understand that the post-employment restrictive covenants under this Section 6.2 do not apply and will not be enforced in California or other states where such restrictive covenants are not permitted. 

ARTICLE VII
NONINTERFERENCE

Executive shall not during the term of Executive's employment by the Company and for a period of one (1) year following Executive's termination of employment for any reason, either on Executive's own account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner or stockholder or otherwise on behalf of any other person, firm or corporation, directly or indirectly solicit, induce attempt to solicit any of (i) its customers or clients to terminate their relationship with the Company or to cease purchasing services or products from the Company or (ii) its officers or employees or offer employment to any person who is an officer or employee of the Company; provided, however, that a general advertisement to which an employee of the Company responds shall in no event be deemed to result in a breach of this Article VII.  

Executive agrees not to harass or disparage the Company or its employees, clients, directors or agents, and the Company hereby agrees not to, and to instruct its officers and directors not to, harass or disparage Executive; provided, however, that nothing in this Agreement shall restrict Executive or the Company from making truthful statements (a) when required by law, subpoena, court order or the like; (b) when requested by a governmental, regulatory, or similar body or entity; (c) in confidence to a professional advisor for the purpose of securing professional advice; or (d) in the course of performing his duties during the Term.

The provisions of this Article VII shall survive the termination of Executive's employment with the Company and shall be fully enforceable thereafter.  If it is determined by a court of competent jurisdiction in any state that any restriction in this Article VII is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.

 

 

ARTICLE VIII
GENERAL PROVISIONS

8.1.Notices.  Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by facsimile) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive's address as listed on the Company's books and records.

8.2.Tax Withholding.  Executive acknowledges that all amounts and benefits payable under this Agreement are subject to deduction and withholding to the extent required by applicable law.

8.3.Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.

8.4.Waiver.  If either party should waive any breach of any provisions of this Agreement, they shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

8.5.Complete Agreement.  This Agreement, together with the Indemnification Agreement between the Company and Executive, dated as of January 30, 2013, as amended, constitute the entire agreement between Executive and the Company and is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter, and will supersede all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect to the subject matter hereof, including, without limitation, the Amended and Restated Senior Officer Employment Agreement by and between TRI Pointe Homes, Inc. and Executive dated January 30, 2013, any offer letter agreement or promise of change in control or severance protection.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein or therein, and cannot be modified or amended except in a writing signed by a duly-authorized officer of the Company and Executive.

8.6.Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

8.7.Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

8.8.Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

 

 

8.9.Arbitration.  Unless otherwise prohibited by law or specified below, all disputes, claims and causes of action, in law or equity, arising from or relating to this Agreement or its enforcement, performance, breach, or interpretation (each, a "Claim") shall be resolved solely and exclusively by final and binding arbitration held in Orange County, California through Judicial Arbitration & Mediation Services ("JAMS") in conformity with the then-existing JAMS employment arbitration rules and California law.  The arbitrator shall:  (a) provide adequate discovery for the resolution of the dispute; and (b) issue a written arbitration decision, to include the arbitrator's essential findings and conclusions and a statement of the award.  However, nothing in this section is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  The Company shall bear the costs of any such arbitration.  Executive and the Company understand that by agreement to arbitrate any Claim pursuant to this Section 8.9, they will not have the right to have any Claim decided by a jury or a court, but shall instead have any Claim decided through arbitration.  Executive and the Company waive any constitutional or other right to bring claims covered by this Agreement other than in their individual capacities.  Except as may be prohibited by applicable law, the foregoing waiver includes the ability to assert claims as a plaintiff or class member in any purported class or representative proceeding.   

8.10.Executive Acknowledgement.  Executive acknowledges that (a) he has consulted with or has had the opportunity to consult with independent counsel of his own choice concerning this Agreement, and has been advised to do so by the Company, and (b) that he has read and understands the Agreement, is fully aware of its legal effect, and has entered into it freely based on his own judgment.

8.11.Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California without regard to the conflicts of law provisions thereof.

[Signature page follows]

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

TRI POINTE GROUP, INC.

By: /s/ Michael D. Grubbs
      Michael D. Grubbs

Title: Chief Financial Officer

Accepted and Agreed:

/s/ Douglas F. Bauer
Douglas F. Bauer

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