Document:

exv4w2

 

EXHIBIT 4.2

DISCOVER BANK

Master Servicer, Servicer and Seller

and

U.S. BANK NATIONAL ASSOCIATION

Trustee

on behalf of the Certificateholders

SERIES SUPPLEMENT

Dated as of December 2, 2004

to

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT

Dated as of November 3, 2004

Subseries 1

$1,250,000,000 Class A, Subseries 1 Certificates

$65,790,000 Class B, Subseries 1 Certificates

Subseries 2

$500,000,000 Class A, Subseries 2 Certificates

$26,316,000 Class B, Subseries 2 Certificates

DISCOVER CARD MASTER TRUST I

SERIES 2004-2 CERTIFICATES

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	SERIES TERM SHEET
	 	 	1	 
	ANNEX
	 	 	1	 
	SECTION 1. Definitions
	 	 	1	 
	SECTION 2. Subordination
	 	 	28	 
	SECTION 3. Representations and Warranties of the Sellers
	 	 	29	 
	SECTION 4. Representations and Warranties of Discover Bank as Master Servicer and Servicer
	 	 	30	 
	SECTION 5. Representations and Warranties of Other Servicers
	 	 	30	 
	SECTION 6. Representations and Warranties of the Trustee
	 	 	30	 
	SECTION 7. Authentication of Certificates
	 	 	31	 
	SECTION 8. Establishment and Administration of Investor Accounts and the Credit Enhancement Account
	 	 	31	 
	SECTION 9. Allocations of Collections
	 	 	35	 
	SECTION 10. Payments
	 	 	51	 
	SECTION 11. Credit Enhancement
	 	 	54	 
	SECTION 12. Alternative Credit Support Election
	 	 	56	 
	SECTION 13. Calculation of Investor Losses
	 	 	57	 
	SECTION 14. Servicing Compensation
	 	 	57	 
	SECTION 15. Class Interest Rate Caps
	 	 	57	 
	SECTION 16. Class Interest Rate Swaps
	 	 	59	 
	SECTION 17. Investor Certificateholders’ Monthly Statement
	 	 	59	 
	SECTION 18. Master Servicer’s Monthly Certificate
	 	 	59	 
	SECTION 19. Notices
	 	 	60	 
	SECTION 20. Additional Amortization Events
	 	 	60	 
	SECTION 21. Early Accumulation Events; Additional Amortization Events
	 	 	60	 
	SECTION 22. Purchase of Investor Certificates and Series Termination
	 	 	61	 
	SECTION 23. Variable Accumulation Period
	 	 	62	 
	SECTION 24. Optional Accumulation Period Commencement
	 	 	63	 
	SECTION 25. Series Yield Factor
	 	 	63	 
	SECTION 26. Ratification of Pooling and Servicing Agreement
	 	 	63	 
	SECTION 27. Counterparts
	 	 	63	 
	SECTION 28. Governing Law
	 	 	63	 
	SECTION 29. Intention of Parties
	 	 	63	 
	SECTION 30. Amendment for Sale Accounting Purposes
	 	 	64	 
	SECTION 31. Election Under Delaware Asset-Backed Securities Facilitation Act
	 	 	64	 
	SECTION 32. Issuance of Additional Certificates
	 	 	64	 

i

 

EXHIBITS

	 	 	 
	EXHIBIT A-1:

	 	Form of Investor Certificates, Subseries 1
	 
	EXHIBIT A-2:

	 	Form of Investor Certificates, Subseries 2
	 
	EXHIBIT B-1:

	 	Form of Certificateholders’ Monthly Statement, Subseries 1
	 
	EXHIBIT B-2:

	 	Form of Certificateholders’ Monthly Statement, Subseries 2
	 
	EXHIBIT C-1:

	 	Form of Master Servicer’s Monthly Certificate, Subseries 1
	 
	EXHIBIT C-2:

	 	Form of Master Servicer’s Monthly Certificate, Subseries 2

ii

 

DISCOVER CARD MASTER TRUST I

SERIES 2004-2 CERTIFICATES

     This Series of Master Trust Certificates is established pursuant to
Section 6.06 of that certain Amended and Restated Pooling and Servicing
Agreement, dated as of November 3, 2004, by and between DISCOVER BANK, a
Delaware banking corporation (“Discover Bank”), as Master Servicer, Servicer
and Seller and U.S. BANK NATIONAL ASSOCIATION (the “Trustee”), as Trustee (the
“Pooling and Servicing Agreement”). This SERIES TERM SHEET and the ANNEX
attached hereto, by and among the Master Servicer, the Servicers, the Sellers
and the Trustee, constitute the SERIES SUPPLEMENT (the “Series Supplement”).
The Pooling and Servicing Agreement and this Series Supplement together
establish the Series of Master Trust Certificates to be known as the DISCOVER
CARD MASTER TRUST I, SERIES 2004-2 CERTIFICATES.

     This Series is comprised of two Subseries (as such term is defined in
Section 1(b) of the Annex attached hereto), each of which shall be treated as a
separate Series of the Discover Card Master Trust I, as more fully set forth in
the definition of “Subseries.” The Subseries of the Discover Card Master Trust
I, Series 2004-2 shall be known as “Subseries 1” and “Subseries 2.”

SERIES TERM SHEET

SUBSERIES 1

	 	 	 
	Date of Series Term Sheet

	 	December 2, 2004
	 
	 	 
	Group

	 	One.
	 
	 	 
	Interchange Series

	 	Yes.
	 
	 	 
	Series Initial Investor Interest

	 	$1,315,790,000.
	 
	 	 
	Class Initial Investor Interest of each Class
of Investor Certificates

	 	Class A - $1,250,000,000; plus the
face amount of any Class A
Certificates issued in an increase of
the Series Investor Interest pursuant
to Section 32.

Class B - $65,790,000; plus the face
amount of any Class B Certificates
issued in an increase of the Series
Investor Interest pursuant to Section
32.
	 
	 	 
	Class A Expected Final Payment Date

	 	The Distribution Date in November 2007.
	 
	 	 
	Class B Expected Final Payment Date

	 	The Distribution Date in December 2007.
	 
	 	 
	Type of Structure

	 	Bullet Maturity.

1

 

	 	 	 
	Certificate Rates

	 	Class A – LIBOR + 0.02% per annum,
calculated on the basis of the actual
number of days elapsed and a 360-day
year, provided, however, that for the
Interest Accrual Period from and
including the Series Closing Date, to
but excluding the distribution date in
January 2005, the Class A Certificate
Rate shall be 2.339375%.
	 
	 	 
	

	 	Class B – LIBOR + 0.16% per annum,
calculated on the basis of the actual
number of days elapsed and a 360-day
year, provided, however, that for the
Interest Accrual Period from and
including the Series Closing Date, to
but excluding the distribution date in
January 2005, the Class B Certificate
Rate shall be 2.479375%.
	 
	 	 
	Subseries

	 	1 of 2.
	 
	 	 
	Monthly Amortization Rate

	 	Not applicable.
	 
	 	 
	Prepayment Calculation Table

	 	Not applicable.
	 
	 	 
	Prepayment Determination Date

	 	Not applicable.
	 
	 	 
	Class Cap Rate

	 	Not applicable.
	 
	 	 
	Class Maximum Rate

	 	Not applicable.
	 
	 	 
	Class Interest Rate Swap

	 	Not applicable.
	 
	 	 
	Interest Rate Swap Counterparty

	 	Not applicable.
	 
	 	 
	Swap Trust Rate

	 	Not applicable.
	 
	 	 
	Swap Counterparty Rate

	 	Not applicable.
	 
	 	 
	Monthly Swap Deposit

	 	Not applicable.
	 
	 	 
	LIBOR Determination Date

	 	The second LIBOR Business Day
immediately preceding the commencement
of an Interest Accrual Period.
	 
	 	 
	Series Yield Factor

	 	Initially zero, but may be increased
pursuant to Section 25.
	 
	 	 
	Series Cut-Off Date

	 	December 1, 2004.
	 
	 	 
	Series Closing Date

	 	December 2, 2004.

2

 

	 	 	 
	Date from which Interest for first Interest

Payment Date Shall Accrue

	 	Series Closing Date.
	 
	 	 
	Distribution Dates

	 	The 15th day of each calendar month
(or, if such day is not a Business
Day, the next succeeding Business
Day), commencing in January 2005.
	 
	 	 
	Interest Payment Dates

	 	Class A - The
15th day of each
calendar month (or, if such day is not
a Business Day, the next succeeding
Business Day), commencing in January
2005.
	 
	 	 
	

	 	Class B - The 15th day of each
calendar month (or, if such day is not
a Business Day, the next succeeding
Business Day), commencing in January
2005.
	 
	 	 
	Statement Dates

	 	Each Distribution Date, commencing in
January 2005.
	 
	 	 
	Principal Payment Date

	 	Not applicable.
	 
	 	 
	Interest Calculation Dates

	 	Not applicable.
	 
	 	 
	Accumulation Commencement Date

	 	Not applicable.
	 
	 	 
	Accumulation Period

	 	Unless an Amortization Event shall
have occurred prior thereto, the
period commencing on the Principal
Commencement Date and ending on the
earliest to occur of (x) the payment
in full of the Series Invested Amount,
(y) the Amortization Commencement
Date, and (z) the Series Termination
Date.
	 
	 	 
	Accumulation Amount

	 	(a) Through the Class A Expected Final
Payment Date, (i) $104,166,666.67 or
(ii) if the Master Servicer elects to
delay commencement of the Accumulation
Period in accordance with Section 23
or if an increase in the Series
Investor Interest pursuant to Section
32 has occurred, the Class A Initial
Investor Interest divided by the
number of Distribution Dates from the
commencement of the Accumulation
Period through and including the Class
A Expected Final Payment Date, and (b)
thereafter, (i) $65,790,000 or (ii) if
an increase in the Series Investor
Interest

3

 

	 	 	 
	

	 	pursuant to Section 32 has
occurred, the Class B Initial Investor
Interest.
	 
	 	 
	Principal Commencement Date

	 	The first day of the Due Period
related to the December 2006
Distribution Date (or such later
Distribution Date as the Master
Servicer may elect in accordance with
Section 23).
	 
	 	 
	Revolving Period

	 	From the Series Cut-Off Date to but
excluding the earlier to occur of (i)
the Principal Commencement Date, and
(ii) the Amortization Commencement
Date.
	 
	 	 
	Controlled Liquidation Period

	 	Not applicable.
	 
	 	 
	Early Accumulation Period

	 	Not applicable.
	 
	 	 
	Type of Credit Enhancement

	 	Cash collateral account.
	 
	 	 
	Stated Shared Credit Enhancement Amount

	 	There shall be no Shared Credit
Enhancement.
	 
	 	 
	Stated Class A Credit Enhancement Amount
	 	 
	 
	 	 
	

	 	There shall be no Class A Cash
Collateral Credit Enhancement.
	 
	 	 
	Stated Class B Credit Enhancement Amount

	 	$98,684,250.
	 
	 	 
	Credit Enhancement Provider

	 	Collectively, the one or more lenders
making a loan in order to provide the
initial funds on deposit in the Credit
Enhancement Account, or any successor
provider of the Credit Enhancement.
	 
	 	 
	Maximum Shared Credit Enhancement Amount

	 	There shall be no Shared Credit
Enhancement.
	 
	 	 
	Maximum Class A Credit Enhancement Amount

	 	There shall be no Class A Cash
Collateral Credit Enhancement.
	 
	 	 
	Maximum Class B Credit Enhancement Amount

	 	On any Distribution Date (a) prior to
the making of an Effective Alternative
Credit Support Election, the greatest
of (i) $13,157,900, (ii) an amount
equal to 1% of the Series Initial
Investor Interest, and (iii) (x) if a
Supplemental Credit Enhancement Event
has not occurred, an amount equal to
7.5% of the Series Investor Interest
as of the last day of the related Due
Period, or (y) if a Supplemental
Credit

4

 

	 	 	 
	

	 	Enhancement Event has occurred,
an amount equal to 8.0% of the Series
Investor Interest as of the last day
of the related Due Period or (b)
subsequent to the making of an
Effective Alternative Credit Support
Election, the greatest of (i)
$13,157,900, (ii) an amount equal to
1% of the Series Initial Investor
Interest, and (iii) an amount equal to
12.5% of the Series Investor Interest
as of the last day of the related Due
Period; provided, however, that if an
Amortization Event with respect to the
Series established hereby occurs, the
Maximum Class B Credit Enhancement
Amount for each Distribution Date
thereafter shall equal the Maximum
Class B Credit Enhancement Amount for
the Distribution Date immediately
preceding the occurrence of the
Amortization Event; and provided,
further, that if a Credit Enhancement
Drawing has been made, until such time
as the Available Class B Credit
Enhancement Amount has been reinstated
in an amount at least equal to the
amount of such Credit Enhancement
Drawing, the Maximum Class B Credit
Enhancement Amount shall be the
Maximum Class B Credit Enhancement
Amount as of the date of such Credit
Enhancement Drawing.
	 
	 	 
	Total Maximum Credit Enhancement Amount

	 	On any Distribution Date, the Maximum
Class B Credit Enhancement Amount for
such Distribution Date.
	 
	 	 
	Additional Credit Support Amount

	 	The lesser of (x)(i) prior to the
occurrence of a Supplemental Credit
Enhancement Event, 5% of the Series
Initial Investor Interest or (ii)
following the occurrence of a
Supplemental Credit Enhancement Event,
4.5% of the Series Initial Investor
Interest and (y) the difference
between the Maximum Class B Credit
Enhancement Amount (after giving
effect to an Alternative Credit
Support Election) and the Available
Class B Credit Enhancement Amount
(immediately before giving effect to
the Alternative Credit Support
Election).

5

 

	 	 	 
	Supplemental Credit Enhancement Amount

	 	The lesser of (x)(i) prior to the
occurrence of an Alternative Credit
Support Election, 0.5% of the Series
Initial Investor Interest or (ii) zero
following the occurrence of an
Alternative Credit Support Election
and (y) the difference between the
Maximum Class B Credit Enhancement
Amount (after giving effect to the
occurrence of a Supplemental Credit
Enhancement Event) and the Available
Class B Credit Enhancement Amount
(immediately before giving effect to
the occurrence of a Supplemental
Credit Enhancement Event).
	 
	 	 
	Initial Subordinated Amount

	 	$164,473,750.
	 
	 	 
	Additional Subordinated Amount

	 	Prior to the occurrence of a
Supplemental Credit Enhancement Event,
5% of the Series Initial Investor
Interest and following the occurrence
of a Supplemental Credit Enhancement
Event, 4.5% of the Series Initial
Investor Interest.
	 
	 	 
	Supplemental Subordinated Amount

	 	Prior to the effectiveness of an
Alternative Credit Support Election,
0.5% of the Series Initial Investor
Interest and zero following the
effectiveness of an Alternative Credit
Support Election.
	 
	 	 
	Series Buffer Amount

	 	Zero.
	 
	 	 
	Interchange Subgroup Buffer Amount

	 	Zero.
	 
	 	 
	Group Buffer Amount

	 	Zero.
	 
	 	 
	Investor Servicing Fee Percentage

	 	2.0% per annum calculated on the basis
of a 360-day year of twelve 30-day
months.
	 
	 	 
	Supplemental Servicing Fee Percentage

	 	Zero.
	 
	 	 
	Amount of Additional Funds

	 	Initially, zero.
	 
	 	 
	Eligible for Reallocations to and from Other
Series in Group

	 	Yes.
	 
	 	 
	Series Termination Date

	 	The first Business Day following the
Distribution Date in May 2010.
	 
	 	 
	Estimated Investment Shortfall

	 	On any date of determination, the
positive difference, if any, between
(i) the

6

 

	 	 	 
	

	 	Certificate Rate for the Class
for whose benefit the amounts on
deposit in the Series Principal
Funding Account are held as of such
date of determination and (ii) the
weighted average yield (expressed as a
Money Market Yield) on the investments
in the Series Principal Funding
Account as of such date of
determination.
	 
	 	 
	Estimated Yield

	 	On any date of determination, the
Portfolio Yield for the immediately
preceding Due Period less 2.00%.
	 
	 	 
	Classes, if any, subject to Regulation S
restrictions

	 	Not applicable.
	 
	 	 
	Classes, if any, subject to ERISA restrictions

	 	Class B.
	 
	 	 
	Bearer Certificates

	 	Not applicable.
	 
	 	 
	Registered Certificates

	 	Class A and Class B Certificates.
	 
	 	 
	Class A Certificate

	 	Each certificate executed by the
Sellers and authenticated by or on
behalf of the Trustee, substantially
in the form of Exhibit A-1-A.
	 
	 	 
	Class B Certificate

	 	Each certificate executed by the
Sellers and authenticated by or on
behalf of the Trustee, substantially
in the form of Exhibit A-1-B.
	 
	 	 
	Principal Paying Agent

	 	Class A – Not applicable.

Class B – Not applicable.
	 
	 	 
	Paying Agents

	 	Class A and Class B – the Corporate
Trust Office of the Trustee.

SUBSERIES 2

	 	 	 
	Date of Series Term Sheet

	 	December 2, 2004
	 
	 	 
	Group

	 	One.

7

 

	 	 	 
	Interchange Series

	 	Yes.
	 
	 	 
	Series Initial Investor Interest

	 	$526,316,000.
	 
	 	 
	Class Initial Investor Interest of each Class
of Investor Certificates

	 	Class A - $500,000,000; plus the face
amount of any Class A Certificates
issued in an increase of the Series
Investor Interest pursuant to Section
32.
	 
	 	 
	

	 	Class B - $26,316,000; plus the face
amount of any Class B Certificates
issued in an increase of the Series
Investor Interest pursuant to Section
32.
	 
	 	 
	Class A Expected Final Payment Date

	 	The Distribution Date in November 2009.
	 
	 	 
	Class B Expected Final Payment Date

	 	The Distribution Date in December 2009.
	 
	 	 
	Type of Structure

	 	Bullet Maturity.
	 
	 	 
	Certificate Rates

	 	Class A – LIBOR + 0.07% per annum,
calculated on the basis of the actual
number of days elapsed and a 360-day
year, provided, however, that for the
Interest Accrual Period from and
including the Series Closing Date, to
but excluding the distribution date in
January 2005, the Class A Certificate
Rate shall be 2.389375%.
	 
	 	 
	

	 	Class B – LIBOR + 0.24% per annum,
calculated on the basis of the actual
number of days elapsed and a 360-day
year, provided, however, that for the
Interest Accrual Period from and
including the Series Closing Date, to
but excluding the distribution date in
January 2005, the Class B Certificate
Rate shall be 2.559375%.
	 
	 	 
	Subseries

	 	2 of 2.
	 
	 	 
	Monthly Amortization Rate

	 	Not applicable.
	 
	 	 
	Prepayment Calculation Table

	 	Not applicable.
	 
	 	 
	Prepayment Determination Date

	 	Not applicable.
	 
	 	 
	Class Cap Rate

	 	Not applicable.
	 
	 	 
	Class Maximum Rate

	 	Not applicable.

8

 

	 	 	 
	Class Interest Rate Swap

	 	Not applicable.
	 
	 	 
	Interest Rate Swap Counterparty

	 	Not applicable.
	 
	 	 
	Swap Trust Rate

	 	Not applicable.
	 
	 	 
	Swap Counterparty Rate

	 	Not applicable.
	 
	 	 
	Monthly Swap Deposit

	 	Not applicable.
	 
	 	 
	LIBOR Determination Date

	 	The second LIBOR Business Day
immediately preceding the commencement
of an Interest Accrual Period.
	 
	 	 
	Series Yield Factor

	 	Initially zero, but may be increased
pursuant to Section 25.
	 
	 	 
	Series Cut-Off Date

	 	December 1, 2004.
	 
	 	 
	Series Closing Date

	 	December 2, 2004.
	 
	 	 
	Date from which Interest for first Interest

Payment Date Shall Accrue

	 	Series Closing Date.
	 
	 	 
	Distribution Dates

	 	The 15th day of each calendar month
(or, if such day is not a Business
Day, the next succeeding Business
Day), commencing in January 2005
	 
	 	 
	Interest Payment Dates

	 	Class A - The
15th day of each
calendar month (or, if such day is not
a Business Day, the next succeeding
Business Day), commencing in January
2005
	 
	 	 
	

	 	Class B - The
15th day of each
calendar month (or, if such day is not
a Business Day, the next succeeding
Business Day), commencing in January
2005.
	 
	 	 
	Statement Dates

	 	Each Distribution Date, commencing in
January 2005.
	 
	 	 
	Principal Payment Date

	 	Not applicable.
	 
	 	 
	Interest Calculation Dates

	 	Not applicable.
	 
	 	 
	Accumulation Commencement Date

	 	Not applicable.
	 
	 	 
	Accumulation Period

	 	Unless an Amortization Event shall
have occurred prior thereto, the
period commencing on the Principal

9

 

	 	 	 
	

	 	Commencement Date and ending on the
earliest to occur of (x) the payment
in full of the Series Invested Amount,
(y) the Amortization Commencement
Date, and (z) the Series Termination
Date.
	 
	 	 
	Accumulation Amount

	 	(a) Through the Class A Expected Final
Payment Date, (i) $41,666,666.67 or
(ii) if the Master Servicer elects to
delay commencement of the Accumulation
Period in accordance with Section 23
or if an increase in the Series
Investor Interest pursuant to Section
32 has occurred, the Class A Initial
Investor Interest divided by the
number of Distribution Dates from the
commencement of the Accumulation
Period through and including the Class
A Expected Final Payment Date, and (b)
thereafter, (i) $26,316,000 or (ii) if
an increase in the Series Investor
Interest pursuant to Section 32 has
occurred, the Class B Initial Investor
Interest.
	 
	 	 
	

	 	The first day of the Due Period
related to the December 2008
Distribution Date (or such later
Distribution Date as the Master
Servicer may elect in accordance with
Section 23).
	 
	 	 
	Revolving Period

	 	From the Series Cut-Off Date to but
excluding the earlier to occur of (i)
the Principal Commencement Date, and
(ii) the Amortization Commencement
Date.
	 
	 	 
	Controlled Liquidation Period

	 	Not applicable.
	 
	 	 
	Early Accumulation Period

	 	Not applicable.
	 
	 	 
	Type of Credit Enhancement

	 	Cash collateral account.
	 
	 	 
	Stated Shared Credit Enhancement Amount

	 	There shall be no Shared Credit
Enhancement.
	 
	 	 
	Stated Class A Credit Enhancement Amount

	 	There shall be no Class A Cash
Collateral Credit Enhancement.
	 
	 	 
	Stated Class B Credit Enhancement Amount

	 	$39,473,700.
	 
	 	 
	Credit Enhancement Provider

	 	Collectively, the one or more lenders
making a loan in order to provide the
initial

10

 

	 	 	 
	

	 	funds on deposit in the Credit
Enhancement Account, or any successor
provider of the Credit Enhancement.
	 
	 	 
	Maximum Shared Credit Enhancement Amount

	 	There shall be no Shared Credit
Enhancement.
	 
	 	 
	Maximum Class A Credit Enhancement Amount
	 	 
	 
	 	 
	

	 	There shall be no Class A Cash
Collateral Credit Enhancement.
	 
	 	 
	Maximum Class B Credit Enhancement Amount

	 	On any Distribution Date (a) prior to
the making of an Effective Alternative
Credit Support Election, the greatest
of (i) $5,263,160, (ii) an amount
equal to 1% of the Series Initial
Investor Interest, and (iii) (x) if a
Supplemental Credit Enhancement Event
has not occurred, an amount equal to
7.5% of the Series Investor Interest
as of the last day of the related Due
Period, or (y) if a Supplemental
Credit Enhancement Event has occurred,
an amount equal to 8.0% of the Series
Investor Interest as of the last day
of the related Due Period or (b)
subsequent to the making of an
Effective Alternative Credit Support
Election, the greatest of (i)
$5,263,160, (ii) an amount equal to 1%
of the Series Initial Investor
Interest, and (iii) an amount equal to
12.5% of the Series Investor Interest
as of the last day of the related Due
Period; provided, however, that if an
Amortization Event with respect to the
Series established hereby occurs, the
Maximum Class B Credit Enhancement
Amount for each Distribution Date
thereafter shall equal the Maximum
Class B Credit Enhancement Amount for
the Distribution Date immediately
preceding the occurrence of the
Amortization Event; and provided,
further, that if a Credit Enhancement
Drawing has been made, until such time
as the Available Class B Credit
Enhancement Amount has been reinstated
in an amount at least equal to the
amount of such Credit Enhancement
Drawing, the Maximum Class B Credit
Enhancement Amount shall be the
Maximum Class B Credit Enhancement
Amount as of the date of such Credit
Enhancement Drawing.

11

 

	 	 	 
	Total Maximum Credit Enhancement Amount

	 	On any Distribution Date, the Maximum
Class B Credit Enhancement Amount for
such Distribution Date.
	 
	 	 
	Additional Credit Support Amount

	 	The lesser of (x)(i) prior to the
occurrence of a Supplemental Credit
Enhancement Event, 5% of the Series
Initial Investor Interest or (ii)
following the occurrence of a
Supplemental Credit Enhancement Event,
4.5% of the Series Initial Investor
Interest and (y) the difference
between the Maximum Class B Credit
Enhancement Amount (after giving
effect to an Alternative Credit
Support Election) and the Available
Class B Credit Enhancement Amount
(immediately before giving effect to
the Alternative Credit Support
Election).
	 
	 	 
	Supplemental Credit Enhancement Amount

	 	The lesser of (x)(i) prior to the
occurrence of an Alternative Credit
Support Election, 0.5% of the Series
Initial Investor Interest or (ii) zero
following the occurrence of an
Alternative Credit Support Election
and (y) the difference between the
Maximum Class B Credit Enhancement
Amount (after giving effect to the
occurrence of a Supplemental Credit
Enhancement Event) and the Available
Class B Credit Enhancement Amount
(immediately before giving effect to
the occurrence of a Supplemental
Credit Enhancement Event).
	 
	 	 
	Initial Subordinated Amount

	 	$65,789,500.
	 
	 	 
	Additional Subordinated Amount

	 	Prior to the occurrence of a
Supplemental Credit Enhancement Event,
5% of the Series Initial Investor
Interest and following the occurrence
of a Supplemental Credit Enhancement
Event, 4.5% of the Series Initial
Investor Interest.
	 
	 	 
	Supplemental Subordinated Amount

	 	Prior to the effectiveness of an
Alternative Credit Support Election,
0.5% of the Series Initial Investor
Interest and zero following the
effectiveness of an Alternative Credit
Support Election.
	 
	 	 
	Series Buffer Amount

	 	Zero.

12

 

	 	 	 
	Interchange Subgroup Buffer Amount

	 	Zero.
	 
	 	 
	Group Buffer Amount

	 	Zero.
	 
	 	 
	Investor Servicing Fee Percentage

	 	2.0% per annum calculated on the basis
of a 360-day year of twelve 30-day
months.
	 
	 	 
	Supplemental Servicing Fee Percentage

	 	Zero.
	 
	 	 
	Amount of Additional Funds

	 	Initially, zero.
	 
	 	 
	Eligible for Reallocations to and from Other
Series in Group

	 	Yes.
	 
	 	 
	Series Termination Date

	 	The first Business Day following the
Distribution Date in May 2012.
	 
	 	 
	Estimated Investment Shortfall

	 	On any date of determination, the
positive difference, if any, between
(i) the Certificate Rate for the Class
for whose benefit the amounts on
deposit in the Series Principal
Funding Account are held as of such
date of determination and (ii) the
weighted average yield (expressed as a
Money Market Yield) on the investments
in the Series Principal Funding
Account as of such date of
determination.
	 
	 	 
	Estimated Yield

	 	On any date of determination, the
Portfolio Yield for the immediately
preceding Due Period less 2.00%.
	 
	 	 
	Classes, if any, subject to Regulation S
restrictions

	 	Not applicable.
	 
	 	 
	Classes, if any, subject to ERISA restrictions

	 	Class B.
	 
	 	 
	Bearer Certificates

	 	Not applicable.
	 
	 	 
	Registered Certificates

	 	Class A and Class B Certificates.
	 
	 	 
	Class A Certificate

	 	Each certificate executed by the
Sellers and authenticated by or on
behalf of the Trustee, substantially
in the form of Exhibit A-2-A.

13

 

	 	 	 
	Class B Certificate

	 	Each certificate executed by the
Sellers and authenticated by or on
behalf of the Trustee, substantially
in the form of Exhibit A-2-B.
	 
	 	 
	Principal Paying Agent

	 	Class A – Not applicable.

Class B – Not applicable.
	 
	 	 
	Paying Agents

	 	Class A and Class B – the Corporate
Trust Office of the Trustee.

14

 

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

	 	 	 
	

	 	DISCOVER BANK,
	

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

	 	
 
	

	 	Michael F. Rickert
	

	 	Vice President, Chief Accounting
Officer and Treasurer
	 
	 	 
	

	 	U.S. BANK NATIONAL ASSOCIATION,
	

	 	   as Trustee
	
	 
	 
	 	/s/ Patricia M. Child
	

	 	
 
	

	 	Patricia M. Child
	

	 	Vice President

 

 

ANNEX

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

     SECTION 1. Definitions

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

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

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

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

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

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

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

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

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

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

     “Amortization Period” shall mean the period from, and including, the
Amortization Commencement Date to, and including, the earlier of (i) the date
of the final distribution to Investor Certificateholders of the Series
established hereby and (ii) the Series Termination Date.

 

 

The first Distribution Date of the Amortization Period shall be the Distribution Date in
the calendar month following the Amortization Commencement Date.

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

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

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

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

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

2

 

          (b) the amount of Series Excess Servicing;

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

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

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

     “Cedel” shall mean Clearstream Banking.

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

3

 

Closing Date to but excluding the 15th day of the month in which current Interest Payment Date
occurs, assuming 30-day months); provided, that, if an increase in the Series
Investor Interest has been made pursuant to Section 32 on or prior to such
Interest Payment Date but during the calendar month in which such Interest Payment Date occurred, the Class
Invested Amount for each Class for such Interest Payment Date shall be deemed
to exclude the portion of the Class Invested Amount represented by Investor
Certificates issued in connection with such increase and such Investor
Certificates shall only bear interest from such Interest Payment Date; and
provided, further, that if an increase in the Series Investor Interest has been
made pursuant to Section 32 during the related Interest Accrual Period but
prior to the calendar month in which such Interest Payment Date occurred, any
Investor Certificates so issued shall bear interest from the prior Interest
Payment Date (or, in the case of the first Interest Payment Date, from the
Series Closing Date).

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

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

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

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

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

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

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

4

 

of Class B Finance Charge Collections, Class B Yield Collections, if any, Class B Investment Income, if applicable, Class B
Interchange in each case for the related Due Period and Class B Additional
Funds for such Distribution Date (less Class B Excess Servicing).

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

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

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

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

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

5

 

Period, if any, and Class Additional Funds for such Distribution Date, if any, and (ii)
the Class Required Amount.

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

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

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

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

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

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

6

 

     “Class Interest Rate Cap Payment” shall mean, with respect to a Class or
Subclass that does not have a fixed or maximum Certificate Rate, with respect
to any Interest Payment Date, any payment required to be made on such Interest
Payment Date by the Interest Rate Cap Provider with respect to the Class
Interest Rate Cap for such Class or Subclass.

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

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

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

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

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

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

7

 

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

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

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

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

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

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

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

     (c) when used with respect to Principal Collections on and
after the occurrence of a Fixed Principal Allocation Event, the
percentage equivalent of a fraction, the numerator of which shall
be the amount of the Class Investor Interest on the last day of
the Due Period prior to the occurrence of a Fixed Principal
Allocation Event and the denominator of which shall be the greater
of (i) the amount of Principal Receivables in the Trust on the
first day of the related Due Period and (ii) the sum of the
numerators used in calculating the components of

8

 

the Series Percentage with respect to Principal Collections for each Series
then outstanding (including the Series established hereby) as of
such Distribution Date or Trust Distribution Date, as applicable;
provided, however, that from and after the Fully Funded Date, if
any, the Class Percentage with respect to Principal Collections
will equal zero; or

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

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

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

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

9

 

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

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

10

 

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

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

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

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

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

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

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

11

 

published in either H.15 (519) or Composite Quotations, the Commercial
Paper Rate for such date shall be calculated by the Trustee and shall be the
Money Market Yield of the arithmetic mean (rounded to the nearest one-hundredth
of a percent, with five hundred one-thousandths of a percent rounded upward) of
the offered rates, as of 11:00 a.m., New York City time, of three leading
dealers of commercial paper in New York City selected by the Trustee on such
date, for commercial paper having a maturity of 30 days placed for an
industrial issuer whose bond rating is “AA” or the equivalent, from either
Rating Agency. In the event that such rates are not available on such date,
then the Commercial Paper Rate shall be the Money Market Yield of the rate for commercial paper so provided in a comparable source. The
Commercial Paper Rate shall be determined by the Trustee.

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

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

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

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

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

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

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

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

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

12

 

     “Deficit Accumulation Amount” shall mean, with respect to the first
Distribution Date of the Accumulation Period, zero, and with respect to any
other Distribution Date of the Accumulation Period, the amount, if any, by
which the amount deposited into the Series Principal Funding Account on the
preceding Distribution Date is less than the Controlled Accumulation Amount for
such preceding Distribution Date.

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

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

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

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

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

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

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

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

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

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

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

     “Excess Income” on any Distribution Date shall mean an amount equal to the
excess, if any, of (a) interest and other income (net of investment expenses)
on such Distribution Date with respect to the funds on deposit in the Series
Principal Funding Account during the related Interest Period over (b) the
amount on deposit in the Series Principal Funding Account in respect of
Certificate Principal during such Interest Period multiplied by a fraction, the
numerator of

13

 

which is the Certificate Rate or the Class Weighted Average
Certificate Rate, as applicable, for the Class for whose benefit the amounts on
deposit in the Series Principal Funding Account are held during such Interest
Period and the denominator of which is (x) if the relevant Certificate Rate is
to be calculated on the basis of the actual number of days elapsed and a
360-day year, 360 divided by the actual number of days from and including the
immediately preceding Distribution Date to but excluding the current
Distribution Date or (y) if the relevant Certificate Rate is to be calculated
on the basis of a 360-day year of twelve 30-day months, twelve.

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

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

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

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

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

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

14

 

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

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

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

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

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

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

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

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

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

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

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

15

 

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

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

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

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

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

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

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

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

     “Interest Rate Cap Provider,” if any, shall mean the entity listed as the
Interest Rate Cap Provider in the Series Term Sheet, in its capacity as obligor
under the Class Interest Rate Caps, or if any Replacement Class Interest Rate
Caps or Qualified Substitute Cap Arrangements are

16

 

obtained pursuant to Section 15, the obligor with respect to such Replacement Class Interest Rate Caps or
Qualified Substitute Cap Arrangements.

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

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

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

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

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

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

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

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

17

 

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

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

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

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

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	Money Market Yield

	 	=
	 	D x 360
	 	x
	 	 	100	 
	

	 	 	 	
 	 	 	 	 	 	 
	

	 	 	 	360 - (D x M)	 	 	 	 	 	 

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

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

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

     “Net Swap Payment,” if applicable, shall mean, with respect to any Class
that is subject to a Class Interest Rate Swap, (x) on any Interest Payment Date
prior to the early termination of the

18

 

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

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

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

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

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

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

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

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

     “Principal Distribution Amount” shall mean, with respect to any
Distribution Date occurring in (i) the Accumulation Period, the Controlled
Accumulation Amount, (ii) the Controlled Liquidation Period, the Controlled
Liquidation Amount, (iii) the Early Accumulation

19

 

Period, the Series Investor Interest, or (iv) in the Amortization Period, the Series Investor Interest.

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

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

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

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

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

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

20

 

Distribution Date to but excluding the current Distribution Date or (B) if each Interest Payment Date is
not also a Distribution Date, 360 divided by the actual number of days from and
including the Interest Calculation Date in the preceding calendar month to but
excluding the Interest Calculation Date following the current Distribution Date
or (y) if the relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve.

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

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

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

	 	(a)	 	during the Revolving Period and the Accumulation
Period or the Controlled Liquidation Period, as applicable,
the sum of
	 
	 	 	 	(x)(1) during the Revolving Period, an amount equal to the
sum of (i) the sum of the Class Finance Charge Collections
and the Class Yield Collections for each Class for such day
and (ii) the amount of Class B Principal Collections for such
day; minus the sum of the Class B Yield Collections for such
day and all accrued but unfunded Class A Monthly Servicing
Fees; or
	 
	 	 	 	(2) during the Accumulation Period or the Controlled
Liquidation Period, as applicable, an amount equal to the sum
of (i) the amount set forth in clause (1) above and (ii)(A)
until the aggregate amount deposited during such Due Period
pursuant to this clause (ii) equals the Controlled
Accumulation Amount or the Controlled Liquidation Amount, as
applicable, for the related Distribution Date, the amount of
Class A Principal Collections for such day less the amount of
Class A Yield Collections for such day and (B) thereafter,
zero provided, however, that

21

 

	 	 	 	with respect to any day on which the Controlled Accumulation Amount or the Controlled
Liquidation Amount, as applicable, for the related
Distribution Date can not be determined, the aggregate amount
to be deposited for such Due Period shall be the Controlled
Accumulation Amount or the Controlled Liquidation Amount, as
applicable, for the Distribution Date preceding the related
Distribution Date; plus

(y) the positive difference, if any, between

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

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

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

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

     Notwithstanding the foregoing, (i) upon the occurrence of any circumstance
described in Section 10.02(d), (e) or (f) of the Pooling and Servicing
Agreement with respect to any Servicer,

22

 

the Required Daily Deposit for any Series then outstanding shall equal the amount described in paragraph (b) above
for such Servicer and (ii) a Servicer may use Collections received by it for
its own account prior to the applicable Distribution Date as permitted by
Sections 3.03(b) and 4.03(b) of the Pooling and Servicing Agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

24

 

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

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

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

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

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

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

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

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

25

 

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

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

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

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

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

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

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

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

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

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

26

 

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

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

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

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

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

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

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

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

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

27

 

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

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

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

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

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

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

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

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

     SECTION 2. Subordination.

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

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

28

 

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

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

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

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

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

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

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

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

29

 

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

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

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

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

30

 

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

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

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

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

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

31

 

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

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

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

32

 

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

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

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

33

 

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

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

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

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

34

 

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

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

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

     SECTION 9. Allocations of Collections.

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

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

35

 

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

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

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

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

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

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

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

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

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

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

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

36

 

          (5) An amount equal to the lesser of

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

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

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

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

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

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

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

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

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

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

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

37

 

	(2)	 	the Class B Subordinated
Payment

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

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

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

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

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

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

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

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

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

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

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

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

38

 

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

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

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

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

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

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

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

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

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

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

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

39

 

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

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

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

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

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

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

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

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

40

 

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

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

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

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

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

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

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

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

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

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

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

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

41

 

	(y)	 	the Available Class B Credit
Enhancement Amount

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

          (22) An amount equal to the lesser of

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

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

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

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

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

          (A) An amount equal to the lesser of

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

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

42

 

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

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

          (B) An amount equal to the lesser of

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

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

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

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

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

43

 

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

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

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

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

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

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

44

 

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

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

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

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

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

45

 

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

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

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

          (A) An amount equal to the lesser of

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

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

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

          (B) An amount equal to the lesser of

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

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

46

 

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

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

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

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

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

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

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

47

 

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

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

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

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

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

48

 

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

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

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

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

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

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

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

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

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

49

 

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

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

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

     An amount equal to the lesser of

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

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

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

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

50

 

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

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

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

     SECTION 10. Payments.

     (a) Payments.

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

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

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

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

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

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

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

51

 

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

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

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

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

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

          (6) Reserved.

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

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

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

52

 

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

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

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

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

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

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

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

53

 

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

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

     SECTION 11. Credit Enhancement.

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

     (b) Successor Credit Enhancement.

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

54

 

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

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

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

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

55

 

     SECTION 12. Alternative Credit Support Election.

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

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

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

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

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

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

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

56

 

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

     SECTION 13. Calculation of Investor Losses.

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

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

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

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

     SECTION 15. Class Interest Rate Caps.

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

57

 

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

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

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

58

 

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

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

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

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

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

     SECTION 17. Investor Certificateholders’ Monthly Statement. On each
Statement Date, a statement substantially in the form of Exhibit B-1 or Exhibit
B-2, as applicable to Subseries 1 or Subseries 2, respectively, and each as
prepared by the Trustee (based on information provided by the Master Servicer)
setting forth the information listed thereon shall be available from the
Trustee, each Paying Agent and, if applicable, the Listing Agent.

     SECTION 18. Master Servicer’s Monthly Certificate. On or before the
second Business Day preceding each Statement Date, the Master Servicer shall
forward to Discover Bank on

59

 

behalf of the Holder of the Seller Certificate, the
Trustee and each Paying Agent a certificate of a Servicing Officer
substantially in the form of Exhibit C-1 or Exhibit C-2, as applicable to
Subseries 1 or Subseries 2, respectively and each setting forth the information
listed thereon.

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

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

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

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

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

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

     SECTION 21. Early Accumulation Events; Additional Amortization Events. If
the Series established hereby is eligible to have an Early Accumulation Period,
each of the events

60

 

described in clause (a), (b), (g), (i) or (j) of Section
9.01 of the Pooling and Servicing Agreement shall not be Amortization Events
but shall instead be Early Accumulation Events. In addition, for purposes of
this Series Supplement, each of the following events shall be (i) Early
Accumulation Events, if the Series established hereby is eligible to have an
Early Accumulation Period, or (ii) Amortization Events, if the Series
established hereby is not eligible to have an Early Accumulation Period:

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

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

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

     SECTION 22. Purchase of Investor Certificates and Series Termination.

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

61

 

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

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

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

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

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

62

 

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

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

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

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

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

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

63

 

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

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

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

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

64

 

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

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

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

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

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

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

65

 

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

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

66

 

EXHIBIT A-1-A

FORM OF CLASS A CERTIFICATE

[FORM OF THE FACE OF THE CLASS A CERTIFICATES]

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

	 	 	 	 	 
	                NO.

	 	$	 	 

CUSIP NO.                    

DISCOVER CARD MASTER TRUST I, SERIES 2004-2

FLOATING RATE CLASS A, SUBSERIES 1 CREDIT CARD PASS-THROUGH

CERTIFICATE

DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER

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

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

A-1-A-1

 

(formerly First Bank National Association, successor trustee to Bank of
America Illinois, formerly Continental Bank, National Association) as Trustee
(the “Trustee”) and Discover Bank as Master Servicer, Servicer and Seller (the
“Pooling and Servicing Agreement”), a summary of certain of the pertinent
provisions of which is set forth herein below, and benefits under any Credit
Enhancement with respect to any Series of investor certificates issued from
time to time pursuant to the Pooling and Servicing Agreement, to the extent
applicable. Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as if set forth at this place.

     This Class A Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of December 2, 2004 (the “Series Supplement”), by and
between the Trustee and Discover Bank or any amendment thereto, or become
vested or obligatory for any purpose until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee under the Pooling
and Servicing Agreement.

A-1-A-2

 

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

	 	 	 	 	 
	 	 	DISCOVER BANK
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

A-1-A-3

 

[FORM OF THE REVERSE OF THE CLASS A CERTIFICATES]

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

     To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement provided, however, that such capitalized terms shall only have the
meanings applicable to Subseries 1 of Series 2004-2. This Class A Certificate
is issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement and the Series Supplement, to which Pooling and
Servicing Agreement and Series Supplement, as each may be amended from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and by which the Class A Certificateholder is bound.

     This Class A Certificate is one of a series of Certificates entitled
“Discover Card Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 1
Credit Card Pass-Through Certificates” (the “Class A Certificates”), each of
which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement and the Series
Supplement to be deposited in the Investor Accounts with respect to Discover
Card Master Trust I, Series 2004-2, Subseries 1 or paid to the Class A
Certificateholders. Also issued under the Pooling and Servicing Agreement and
the Series Supplement are Investor Certificates designated as “Discover Card
Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 1 Credit Card
Pass-Through Certificates” (the “Class B Certificates”). The Class A
Certificates and the Class B Certificates are collectively referred to herein
as the Investor Certificates.

     The aggregate interest represented by the Class A Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class A
Investor Interest at such time, plus accrued but unpaid Certificate Interest
for the Class A Certificates and any interest thereon. The Class Initial
Investor Interest of the Class A Certificates is $1,250,000,000; plus the face
amount of any Class A Certificates issued in an increase of the Series Investor
Interest pursuant to Section 32 of the Series Supplement. The Class A Invested
Amount on any Distribution Date will be an amount equal to the Class A Initial
Investor Interest minus the sum of (a) the aggregate amount of payments of
Certificate Principal paid to the Class A Certificateholders prior to such
Distribution Date, (b) the aggregate amount of Investor Losses for such Class
not reimbursed prior to such Distribution Date and (c) the aggregate amount of
losses of principal on investments in funds on deposit for the benefit of such
Class in the Series Principal Funding Account. In addition to the Investor
Certificates, a Seller Certificate has been issued pursuant to the Pooling and
Servicing Agreement which represents, at any time, the undivided interest in
the Trust not represented by the Investor Certificates or the investor
certificates of any other Series of investor certificates then outstanding.
Subject to the terms and conditions of the Pooling and Servicing Agreement, the
Sellers may from time to time direct the Trustee, on behalf of the

A-1-A-4

 

Trust, to issue one or more new Series of investor certificates, which
will represent Fractional Undivided Interests in the Trust.

     During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in January 2005, or if such 15th
day is not a Business Day, on the next succeeding Business Day (an “Interest
Payment Date”), to the Class A Certificateholders of record as of the last day
of the month preceding the related Interest Payment Date. Principal on the
Class A Certificates is scheduled to be paid in a single payment on the
Distribution Date in November 2007 (the “Class A Expected Final Payment Date”),
but may be paid sooner or later and in installments if an Amortization Event
occurs. During the Amortization Period, if any, Certificate Interest and
Certificate Principal collected by the Master Servicer will be distributed to
the Class A Certificateholders on the Distribution Date of each calendar month,
commencing in the month following the commencement of the Amortization Period.
In any event, the final payment of principal of either class will be made no
later than the first Business Day following the Distribution Date in May 2010
(the “Series Termination Date”).

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

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

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

A-1-A-5

 

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

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

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

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

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

A-1-A-6

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

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

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Authorized Officer

A-1-A-7

 

EXHIBIT A-1-B

FORM OF CLASS B CERTIFICATE

[FORM OF THE FACE OF THE CLASS B CERTIFICATES]

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

	 	 	 	 	 
	NO.

	 	$	 	 

CUSIP NO.                    

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

DISCOVER CARD MASTER TRUST I, SERIES 2004-2

FLOATING RATE CLASS B, SUBSERIES 1 CREDIT CARD PASS-THROUGH

CERTIFICATE

DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER

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

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

     This certifies that Cede & Co. (the “Class B Certificateholder”) is the
registered owner of a Fractional Undivided Interest in the Discover Card Master
Trust I (the “Trust”), the corpus of which consists of a portfolio of
receivables (the “Receivables”) existing as of the Cut-Off Date (or, with
respect to Receivables in Additional Accounts, as of the applicable Additional
Account

A-1-B-1

 

Cut-Off Date) or thereafter created under certain open end credit card
accounts for specified Persons (the “Accounts”) originated by Discover Bank
(formerly Greenwood Trust Company), a Delaware banking corporation (“Discover
Bank”), or an affiliate of Discover Bank, and transferred to the Trust by
Discover Bank or one or more Additional Sellers, all monies due or to become
due with respect thereto, all proceeds (as defined in Section 9-102(a)(64) of
the Uniform Commercial Code as in effect in the Applicable State or any
successor provision thereto) of such Receivables and interchange pursuant to an
Amended and Restated Pooling and Servicing Agreement, dated as of November 3,
2004, by and between U.S. Bank National Association (formerly First Bank
National Association, successor trustee to Bank of America Illinois, formerly
Continental Bank, National Association) as Trustee (the “Trustee”) and Discover
Bank as Master Servicer, Servicer and Seller (the “Pooling and Servicing
Agreement”), a summary of certain of the pertinent provisions of which is set
forth herein below, and benefits under any Credit Enhancement with respect to
any Series of investor certificates issued from time to time pursuant to the
Pooling and Servicing Agreement, to the extent applicable. Reference is hereby
made to the further provisions of this Class B Certificate set forth on the
reverse hereof, and such further provisions shall for all purposes have the
same effect as if set forth at this place.

     This Class B Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of December 2, 2004 (the “Series Supplement”), by and
between the Trustee and Discover Bank or any amendment thereto, or become
vested or obligatory for any purpose until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee under the Pooling
and Servicing Agreement.

A-1-B-2

 

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

	 	 	 	 	 
	 	 	DISCOVER BANK
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

A-1-B-3

 

[FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]

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

     To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement; provided, however, that such capitalized terms shall only have the
meanings applicable to Subseries 1 of Series 2004-2. This Class B Certificate
is issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement and the Series Supplement, to which Pooling and
Servicing Agreement and Series Supplement, as each may be amended from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and by which the Class B Certificateholder is bound.

     This Class B Certificate is one of a class of Certificates entitled
“Discover Card Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 1
Credit Card Pass-Through Certificates” (the “Class B Certificates”), each of
which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement and the Series
Supplement to be deposited in the Investor Accounts with respect to Discover
Card Master Trust I, Series 2004-2, Subseries 1 or paid to the Class B
Certificateholders. Also issued under the Pooling and Servicing Agreement and
the Series Supplement are Investor Certificates designated as “Discover Card
Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 1 Credit Card
Pass-Through Certificates” (the “Class A Certificates”). The Class A
Certificates and the Class B Certificates are collectively referred to herein
as the Investor Certificates.

     The aggregate interest represented by the Class B Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class
Investor Interest of the Class B Certificates at such time, plus accrued but
unpaid Certificate Interest for the Class B Certificates and any interest
thereon. The Class B Certificateholders are also entitled to the benefit of
the Credit Enhancement, to the extent provided in the Series Supplement. The
Class Initial Investor Interest of the Class B Certificates is $65,790,000;
plus the face amount of any Class B Certificates issued in an increase of the
Series Investor Interest pursuant to Section 32 of the Series Supplement. The
Class B Invested Amount on any Distribution Date will be an amount equal to the
Class B Initial Investor Interest minus the sum of (a) the aggregate amount of
payments of Certificate Principal paid to the Class B Certificateholders prior
to such Distribution Date, (b) the aggregate amount of Investor Losses for such
Class not reimbursed prior to such Distribution Date and (c) the aggregate
amount of losses of principal on investments in funds on deposit for the
benefit of such Class in the Series Principal Funding Account. In addition to
the Investor Certificates, a Seller Certificate has been issued pursuant to the
Pooling and Servicing Agreement which represents, at any time, the undivided interest in the
Trust not represented by

A-1-B-4

 

the Investor Certificates or the investor certificates
of any other Series of investor certificates then outstanding. Subject to the
terms and conditions of the Pooling and Servicing Agreement, the Sellers may
from time to time direct the Trustee, on behalf of the Trust, to issue one or
more new Series of investor certificates, which will represent Fractional
Undivided Interests in the Trust.

     During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in January 2005, or if such 15th
day is not a Business Day, on the next succeeding Business Day (each, an
“Interest Payment Date”), to the Class B Certificateholders of record as of the
last day of the month preceding the related Interest Payment Date. Principal
on the Class B Certificates is scheduled to be paid in a single payment on the
Distribution Date in December 2007 (the “Class B Expected Final Payment Date”),
but may be paid sooner or later or in installments under certain circumstances.
During the Amortization Period, if any, Certificate Interest and Certificate
Principal collected by the Master Servicer will be distributed to the Class B
Certificateholders on the Distribution Date of each calendar month, commencing
in the month following the commencement of the Amortization Period; provided,
however, that no Certificate Principal will be distributed to the Class B
Certificateholders until the Class A Investor Interest has been reduced to
zero. The rights of the Class B Certificateholders to receive the
distributions to which they would otherwise be entitled on the Receivables will
be subordinated to the rights of the Class A Certificateholders and the Master
Servicer to the extent described in the Pooling and Servicing Agreement and
Series Supplement. In any event, the final payment of principal of either
Class will be made no later than the first Business Day following the
Distribution Date in May 2010 (the “Series Termination Date”).

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

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

     The Pooling and Servicing Agreement permits, with certain exceptions, the
amendment and modification of the rights and obligations of the Master
Servicer, and the rights of Investor

A-1-B-5

 

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

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

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

A-1-B-6

 

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

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

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

A-1-B-7

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

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

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as
 Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Authorized Office

A-1-B-8

 

EXHIBIT A-2-A

FORM OF CLASS A CERTIFICATE

[FORM OF THE FACE OF THE CLASS A CERTIFICATES]

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

	 	 	 
	               NO.

	 	$

CUSIP NO.                    

DISCOVER CARD MASTER TRUST I, SERIES 2004-2

FLOATING RATE CLASS A, SUBSERIES 2 CREDIT CARD PASS-THROUGH CERTIFICATE

DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER

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

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

A-2-A-1

 

Illinois, formerly Continental Bank, National Association) as Trustee (the
“Trustee”) and Discover Bank as Master Servicer, Servicer and Seller (the
“Pooling and Servicing Agreement”), a summary of certain of the pertinent
provisions of which is set forth herein below, and benefits under any Credit
Enhancement with respect to any Series of investor certificates issued from
time to time pursuant to the Pooling and Servicing Agreement, to the extent
applicable. Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as if set forth at this place.

     This Class A Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of December 2, 2004 (the “Series Supplement”), by and
between the Trustee and Discover Bank or any amendment thereto, or become
vested or obligatory for any purpose until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee under the Pooling
and Servicing Agreement.

A-2-A-2

 

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

	 	 	 	 	 
	 	 	DISCOVER BANK
	 
	 	 	 	 
	

	 	By:
	 	

A-2-A-3

 

[FORM OF THE REVERSE OF THE CLASS A CERTIFICATES]

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

     To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement provided, however, that such capitalized terms shall only have the
meanings applicable to Subseries 2 of Series 2004-2. This Class A Certificate
is issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement and the Series Supplement, to which Pooling and
Servicing Agreement and Series Supplement, as each may be amended from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and by which the Class A Certificateholder is bound.

     This Class A Certificate is one of a series of Certificates entitled
“Discover Card Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 2
Credit Card Pass-Through Certificates” (the “Class A Certificates”), each of
which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement and the Series
Supplement to be deposited in the Investor Accounts with respect to Discover
Card Master Trust I, Series 2004-2, Subseries 2 or paid to the Class A
Certificateholders. Also issued under the Pooling and Servicing Agreement and
the Series Supplement are Investor Certificates designated as “Discover Card
Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 2 Credit Card
Pass-Through Certificates” (the “Class B Certificates”). The Class A
Certificates and the Class B Certificates are collectively referred to herein
as the Investor Certificates.

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

A-2-A-4

 

     During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in January 2005, or if such 15th
day is not a Business Day, on the next succeeding Business Day (an “Interest
Payment Date”), to the Class A Certificateholders of record as of the last day
of the month preceding the related Interest Payment Date. Principal on the
Class A Certificates is scheduled to be paid in a single payment on the
Distribution Date in November 2009 (the “Class A Expected Final Payment Date”),
but may be paid sooner or later and in installments if an Amortization Event
occurs. During the Amortization Period, if any, Certificate Interest and
Certificate Principal collected by the Master Servicer will be distributed to
the Class A Certificateholders on the Distribution Date of each calendar month,
commencing in the month following the commencement of the Amortization Period.
In any event, the final payment of principal of either class will be made no
later than the first Business Day following the Distribution Date in May 2012
(the “Series Termination Date”).

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

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

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

A-2-A-5

 

activities of the Trust may be significantly changed only with the consent
of the Holders of Investor Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Aggregate Invested Amount. Any
such amendment and any such consent by the Class A Certificateholder, including
the deemed consent described in the following sentence, shall be conclusive and
binding on such Class A Certificateholder and upon all future Holders of this
Class A Certificate and of any Class A Certificate issued in exchange hereof or
in lieu hereof whether or not notation thereof is made upon this Class A
Certificate. The Class A Certificateholder, by acceptance of this Class A
Certificate, will be deemed to have consented for all purposes to any amendment
that any Seller determines is necessary or desirable for such Seller to
maintain or establish sale accounting treatment under then-applicable financial
accounting standards.

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

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

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

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

A-2-A-6

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

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

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Authorized Officer

A-2-A-7

 

EXHIBIT A-2-B

FORM OF CLASS B CERTIFICATE

[FORM OF THE FACE OF THE CLASS B CERTIFICATES]

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

	 	 	 
	NO.

	 	$

CUSIP NO.                    ____

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

DISCOVER CARD MASTER TRUST I, SERIES 2004-2

FLOATING RATE CLASS B, SUBSERIES 2 CREDIT CARD PASS-THROUGH CERTIFICATE

DISCOVER BANK

MASTER SERVICER, SERVICER AND SELLER

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

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

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

A-2-B-1

 

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

     This Class B Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement or any amendment thereto, or the Series
Supplement, dated as of December 2, 2004 (the “Series Supplement”), by and
between the Trustee and Discover Bank or any amendment thereto, or become
vested or obligatory for any purpose until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee under the Pooling
and Servicing Agreement.

A-2-B-2

 

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

DISCOVER BANK

	 	 	 
	

	By: 	 
	

	 	

A-2-B-3

 

[FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]

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

     To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement; provided, however, that such capitalized terms shall only have the
meanings applicable to Subseries 2 of Series 2004-2. This Class B Certificate
is issued under and is subject to the terms, provisions and conditions of the
Pooling and Servicing Agreement and the Series Supplement, to which Pooling and
Servicing Agreement and Series Supplement, as each may be amended from time to
time, the Class B Certificateholder by virtue of the acceptance hereof assents
and by which the Class B Certificateholder is bound.

     This Class B Certificate is one of a class of Certificates entitled
“Discover Card Master Trust I, Series 2004-2 Floating Rate Class B, Subseries 2
Credit Card Pass-Through Certificates” (the “Class B Certificates”), each of
which represents a Fractional Undivided Interest in the Trust including the
right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement and the Series
Supplement to be deposited in the Investor Accounts with respect to Discover
Card Master Trust I, Series 2004-2, Subseries 2 or paid to the Class B
Certificateholders. Also issued under the Pooling and Servicing Agreement and
the Series Supplement are Investor Certificates designated as “Discover Card
Master Trust I, Series 2004-2 Floating Rate Class A, Subseries 2 Credit Card
Pass-Through Certificates” (the “Class A Certificates”). The Class A
Certificates and the Class B Certificates are collectively referred to herein
as the Investor Certificates.

     The aggregate interest represented by the Class B Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class
Investor Interest of the Class B Certificates at such time, plus accrued but
unpaid Certificate Interest for the Class B Certificates and any interest
thereon. The Class B Certificateholders are also entitled to the benefit of
the Credit Enhancement, to the extent provided in the Series Supplement. The
Class Initial Investor Interest of the Class B Certificates is $26,316,000;
plus the face amount of any Class B Certificates issued in an increase of the
Series Investor Interest pursuant to Section 32 of the Series Supplement. The
Class B Invested Amount on any Distribution Date will be an amount equal to the
Class B Initial Investor Interest minus the sum of (a) the aggregate amount of
payments of Certificate Principal paid to the Class B Certificateholders prior
to such Distribution Date, (b) the aggregate amount of Investor Losses for such
Class not reimbursed prior to such Distribution Date and (c) the aggregate
amount of losses of principal on investments in funds on deposit for the
benefit of such Class in the Series Principal Funding Account. In addition to
the Investor Certificates, a Seller Certificate has been issued pursuant to the
Pooling and Servicing Agreement which represents, at any time, the undivided
interest in the Trust not represented by the Investor Certificates or the
investor certificates of any other Series of investor certificates then
outstanding. Subject to the terms and conditions of the Pooling and Servicing
Agreement, the Sellers may from time to time direct the Trustee, on behalf of
the Trust, to issue one or more new Series of investor certificates, which will
represent Fractional Undivided Interests in the Trust.

A-2-B-4

 

     During the Revolving Period, which begins on the Series Cut-Off Date, and
during the Accumulation Period, Certificate Interest will be distributed on the
15th day of each calendar month with respect to interest accrued during the
preceding Interest Accrual Period, commencing in January 2005, or if such 15th
day is not a Business Day, on the next succeeding Business Day (each, an
“Interest Payment Date”), to the Class B Certificateholders of record as of the
last day of the month preceding the related Interest Payment Date. Principal
on the Class B Certificates is scheduled to be paid in a single payment on the
Distribution Date in December 2009 (the “Class B Expected Final Payment Date”),
but may be paid sooner or later or in installments under certain circumstances.
During the Amortization Period, if any, Certificate Interest and Certificate
Principal collected by the Master Servicer will be distributed to the Class B
Certificateholders on the Distribution Date of each calendar month, commencing
in the month following the commencement of the Amortization Period; provided,
however, that no Certificate Principal will be distributed to the Class B
Certificateholders until the Class A Investor Interest has been reduced to
zero. The rights of the Class B Certificateholders to receive the
distributions to which they would otherwise be entitled on the Receivables will
be subordinated to the rights of the Class A Certificateholders and the Master
Servicer to the extent described in the Pooling and Servicing Agreement and
Series Supplement. In any event, the final payment of principal of either
Class will be made no later than the first Business Day following the
Distribution Date in May 2012 (the “Series Termination Date”).

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

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

     The Pooling and Servicing Agreement permits, with certain exceptions, the
amendment and modification of the rights and obligations of the Master
Servicer, and the rights of Investor Certificateholders under the Pooling and
Servicing Agreement and Series Supplement, at any time by the Master Servicer,
the Sellers and the Trustee in certain cases (some of which require
confirmation from the Rating Agencies that such amendment will not result in
the downgrading or withdrawal of the rating assigned to the Investor
Certificates) without the consent of the Investor Certificateholders, and in
all other cases with the consent of the Investor Certificateholders owning
Fractional Undivided Interests aggregating not less than 66-2/3% of the Class
Invested Amount of each such affected Class (and with confirmation from the
Rating Agencies that such amendment will not result in the downgrading or
withdrawal of the rating assigned to the Investor Certificates); provided,
however, that no such

A-2-B-5

 

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

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

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

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

     The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent,
and any agent of any of them, may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Master Servicer, the Trust nor the Trustee, the Paying Agent, the

A-2-B-6

 

Transfer Agent, nor any agent of any of them or any such agent shall be
affected by notice to the contrary except in certain circumstances described in
the Pooling and Servicing Agreement.

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

A-2-B-7

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

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

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	

	

	 	 	 	Authorized Officer

A-2-B-8

 

Exhibit B-1

Form of Investor Certificateholders’ Monthly Statement

Discover Card Master Trust I

Series 2004-2, Subseries 1 Monthly Statement

	 	 	 
	Distribution
Date:                    ,                    

	 	Month Ending:                                        ,                    

Pursuant to the Series Supplement dated as of December 2, 2004 relating to the
Amended and Restated Pooling and Servicing Agreement dated as of November 3,
2004 by and between Discover Bank and U.S. Bank National Association as
Trustee, the Trustee is required to prepare certain information each month
regarding current distributions to investors and the performance of the Trust.
We have set forth below this information for the Distribution Date listed
above, as well as for the calendar month ended on the date listed above.

	1.	 	Payments to investors in Series 2004-2, Subseries 1 on this Distribution
Date (per $1,000 of Class Initial Investor Interest)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total	 	Interest	 	Principal
	Series 2004-2, Subseries 1
	 	 	 	 	 	 	 	 	 	 	 	 
	Class A
	 	$	                   	 	 	$	                   	 	 	$	                   	 
	Class B
	 	$	                   	 	 	$	                   	 	 	$	                   	 

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

	 	 	 	 	 	 	 	 	 
	(a)
	 	Aggregate Investor Interest	 	$	                   	 
	 

	 
	 	Seller Interest	 	$	                   	 
	 

	 
	 	TOTAL MASTER TRUST	 	$	                   	 
	 

	(b)
	 	Group One Investor Interest	 	$	                   	 
	 

	(c)
	 	Group One Investor Interest for
Interchange Series	 	$	                   	 
	 

	(d)
	 	Series 2004-2, Subseries 1 Investor Interest	 	$	                   	 
	 

	(e)
	 	Class A Investor Interest	 	$	                   	 
	 

	 
	 	Class B Investor Interest	 	$	                   	 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Finance Charge	 	Principal	 	Interchange	 	 	 	 
	 	 	 	 	 	 	Collections	 	Collections	 	 	 	 	 	 	 	 
	(a)
	 	Allocation of Collections between	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Investors and Seller	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 
	 	Aggregate Investor Allocation	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

	 
	 	Seller Allocation	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

	(b)
	 	Group One Allocation	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

	(c)
	 	Series 2004-2, Subseries 1 Allocations	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

	(d)
	 	Class A Allocations	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

	 
	 	Class B Allocations	 	$	                   	 	 	$	                   	 	 	$	                   	 	 	 	 	 
	 

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

B-1-1

 

	 	 	 	 	 
	(f)

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

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Deposits into the SPFA on	 	Deficit Amount on	 	 	 	 
	 	 	this Distribution Date	 	this Distribution Date	 	SPFA Balance	 	Investment Income
	Series 2004-2, Subseries 1
	 	$            	 	$            	 	$            	 	 	$            	 

	5.	 	Information concerning amount of Controlled Liquidation Payments

	 	 	 	 	 	 	 
	 	 	Amount paid on this	 	Deficit Amount on this	 	Total Payments through this
	 	 	Distribution Date	 	Distribution Date	 	Distribution Date
	Series 2004-2,
	 	 	 	 	 	 
	Subseries 1
	 	 	 	 	 	 
	Class A
	 	N/A	 	N/A	 	N/A
	Class B
	 	N/A	 	N/A	 	N/A

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

	 	 	 	 	 
	 	 	Deposits into the SIFA	 	 
	 	 	on this Distribution Date	 	SIFA Balance
	Series 2004-2, Subseries 1
	 	$            	 	$            

	7.	 	Investor Charged-Off Amount

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Cumulative Investor
	 	 	 	 	[Month][Year]	 	Charged-Off Amount
	(a)
	 	Group One	 	$            	 	$            
	(b)
	 	Series 2004-2, Subseries 1	 	$            	 	$            
	(c)
	 	Class A	 	$            	 	$            
	 
	 	Class B	 	$            	 	$            
	(d)
	 	As an annualized percentage of Principal Receivables at the beginning of
[Month][Year]	 	            	%	N/A

	8.	 	Investor Losses for [Month][Year]

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	(a)
	 	Group One	 	$              	 	$              
	(b)
	 	Series 2004-2, Subseries 1	 	$              	 	$              

B-1-2

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	(c)
	 	Class A	 	$              	 	$              
	 
	 	Class B	 	$              	 	$              

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

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	(a)
	 	Group One	 	$              	 	$              
	(b)
	 	Series 2004-2, Subseries 1	 	$              	 	$              
	(c)
	 	Class A	 	$              	 	$              
	 
	 	Class B	 	$              	 	$              

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

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

	 	Group One	 	$              	 	$              
	(b)

	 	Series 2004-2, Subseries 1
	 	$              	 	$              
	(c)

	 	Class A
	 	$              	 	$              
	

	 	Class B
	 	$              	 	$              

	11.	 	Investor Monthly Servicing Fee payable on this Distribution Date

	 	 	 	 	 
	(a)
	 	Group One	 	$                   
	(b)
	 	Series 2004-2, Subseries 1	 	$                   
	(c)
	 	Class A	 	$                   
	 
	 	Class B	 	$                   

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

	 	 	 	 	 
	 	 	 	 	as a percentage of
	 	 	Total	 	Class A Invested Amount
	Series 2004-2 Class B, Subseries 1
	 	$                   	 	                   %

	13.	 	Total Available Credit Enhancement Amounts

	 	 	 	 	 	 	 
	 	 	 	 	Shared Amount	 	Class B Amount
	(a)
	 	Maximum Amount on this Distribution	 	N/A	 	$              
	 
	 	Date	 	 	 	 
	(b)
	 	Available Amount on this Distribution	 	N/A	 	$              
	 
	 	Date	 	 	 	 
	(c)
	 	Amount of Unreimbursed drawings on Credit	 	 	 	 
	 
	 	Enhancement on this Distribution Date	 	N/A	 	$              
	(d)
	 	Credit Enhancement Fee on this	 	 	 	 
	 
	 	Distribution Date	 	N/A	 	$              

B-1-3

 

	14.	 	Delinquency Summary

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

	 	$                   

	 	 	 	 	 	 	 	 	 
	 	 	Delinquent Amount	 	Percentage of ending
	Payment Status	 	ending balance	 	Receivables outstanding
	30 - 59 days
	 	 	$              	 	 	 	              	%
	60 - 179 days
	 	 	$              	 	 	 	              	%

	15.	 	Excess Spread Percentages on this Distribution
Date1

	 	 	 	 	 
	(a)

	 	Group One2
	 	                   %
	(b)

	 	Interchange Subgroup3
	 	                   %
	(c)

	 	Series 2004-2, Subseries 14
	 	                   %

	16.	 	Net Charge-Offs on this Distribution Date5

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

	 	                   %

	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

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

B-1-4

 

Exhibit B-2

Form of Investor Certificateholders’ Monthly Statement

Discover Card Master Trust I

Series 2004-2, Subseries 2 Monthly Statement

	 	 	 	 	 
	Distribution Date:
                                
       ,                    

	 	Month Ending:                    
                   ,            
       

Pursuant to the
Series Supplement dated as of December 2, 2004 relating to the
Amended and Restated Pooling and Servicing Agreement dated as of November 3,
2004 by and between Discover Bank and U.S. Bank National Association as
Trustee, the Trustee is required to prepare certain information each month
regarding current distributions to investors and the performance of the Trust.
We have set forth below this information for the Distribution Date listed
above, as well as for the calendar month ended on the date listed above.

	1.	 	Payments to investors in Series 2004-2, Subseries 2 on this Distribution
Date (per $1,000 of Class Initial Investor Interest)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total	 	Interest	 	Principal
	Series 2004-2, Subseries 2
	 	 	 	 	 	 	 	 	 	 	 	 
	Class A
	 	$	                   	 	 	$	                   	 	 	$	                   	 
	Class B
	 	$	                   	 	 	$	                   	 	 	$	                   	 

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

	 	 	 	 	 
	(a)
	 	Aggregate Investor Interest	 	$                   
	 

	 
	 	Seller Interest	 	$                   
	 

	 
	 	TOTAL MASTER TRUST	 	$                   
	 

	(b)
	 	Group One Investor Interest	 	$                   
	 

	(c)
	 	Group One Investor Interest for Interchange Series	 	$                   
	 

	(d)
	 	Series 2004-2, Subseries 2 Investor Interest	 	$                   
	 

	(e)
	 	Class A Investor Interest	 	$                   
	 

	 
	 	Class B Investor Interest	 	$                   

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Finance Charge	 	Principal	 	 
	 	 	 	 	Collections	 	Collections	 	Interchange
	(a)
	 	Allocation of Collections between	 	 	 	 	 	 
	 
	 	Investors and Seller	 	 	 	 	 	 
	 

	 
	 	Aggregate Investor Allocation	 	$                   	 	$                   	 	$                   
	 

	 
	 	Seller Allocation	 	$                   	 	$                   	 	$                   
	 

	(b)
	 	Group One Allocation	 	$                   	 	$                   	 	$                   
	 

	(c)
	 	Series 2004-2, Subseries 2 Allocations	 	$                   	 	$                   	 	$                   
	 

	(d)
	 	Class A Allocations	 	$                   	 	$                   	 	$                   
	 

	 
	 	Class B Allocations	 	$                   	 	$                   	 	$                   
	 

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

	(f)
	 	Finance Charge Collections as a	 	 	 	 	 	 
	 
	 	monthly percentage of Master Trust	 	 	 	 	 	 
	 
	 	Receivables	 	 	 	 	 	 

B-2-1

 

	 	 	 	 	 
	

	 	at the beginning of [Month][Year]
	 	                   %
	 
	 	 	 	 
	(g)

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Deposits into the SPFA on	 	Deficit Amount on	 	 	 	 
	 	 	this Distribution Date	 	this Distribution Date	 	SPFA Balance	 	Investment Income
	Series 2004-2, Subseries 2
	 	$              	 	$              	 	$              	 	$              

	5.	 	Information concerning amount of Controlled Liquidation Payments

	 	 	 	 	 	 	 
	 	 	Amount paid on this	 	Deficit Amount on this	 	Total Payments through this
	 	 	Distribution Date	 	Distribution Date	 	Distribution Date
	Series 2004-2,
	 	 	 	 	 	 
	Subseries 2
	 	 	 	 	 	 
	Class A
	 	N/A	 	N/A	 	N/A
	Class B
	 	N/A	 	N/A	 	N/A

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

	 	 	 	 	 
	 	 	Deposits into the SIFA	 	 
	 	 	on this Distribution Date	 	SIFA Balance
	Series 2004-2, Subseries 2
	 	$                   	 	$                   

	7.	 	Investor Charged-Off Amount

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Cumulative Investor
	 	 	 	 	[Month][Year]	 	Charged-Off Amount
	(a)
	 	Group One	 	$                   	 	$                   
	(b)
	 	Series 2004-2, Subseries 2	 	$                   	 	$                   
	(c)
	 	Class A	 	$                   	 	$                   
	 
	 	Class B	 	$                   	 	$                   
	(d)
	 	As an annualized percentage of	 	 	 	 
	 
	 	Principal Receivables at the	 	 	 	 
	 
	 	beginning of [Month][Year]	 	                   %	 	N/A

	8.	 	Investor Losses for [Month][Year]

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	(a)
	 	Group One	 	$                   	 	$                   
	(b)
	 	Series 2004-2, Subseries 2	 	$                   	 	$                   
	(c)
	 	Class A	 	$                   	 	$                   

B-2-2

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	 
	 	Class B	 	$                   	 	$                   

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

	 	 	 	 	 	 	 
	 	 	 	 	 	 	per $1,000 of initial
	 	 	 	 	Total	 	Investor Interest
	(a)
	 	Group One	 	$                   	 	$                   
	(b)
	 	Series 2004-2, Subseries 2	 	$                   	 	$                   
	(c)
	 	Class A	 	$                   	 	$                   
	 
	 	Class B	 	$                   	 	$                   

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

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

	 	Group One
	 	$                   
	 	$                   
	(b)

	 	Series 2004-2, Subseries 2
	 	$                   
	 	$                   
	(c)

	 	Class A
	 	$                   
	 	$                   
	

	 	Class B
	 	$                   
	 	$                   

	11.	 	Investor Monthly Servicing Fee payable on this Distribution Date

	 	 	 	 	 
	(a)
	 	Group One	 	$                   
	(b)
	 	Series 2004-2, Subseries 2	 	$                   
	(c)
	 	Class A	 	$                   
	 
	 	Class B	 	$                   

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

	 	 	 	 	 
	 	 	 	 	as a percentage of
	 	 	Total	 	Class A Invested Amount
	Series 2004-2 Class B, Subseries 2
	 	$            	 	           %

	13.	 	Total Available Credit Enhancement Amounts

	 	 	 	 	 	 	 
	 	 	 	 	Shared Amount	 	Class B Amount
	(a)
	 	Maximum Amount on this Distribution	 	N/A	 	$                   
	 
	 	Date	 	 	 	 
	(b)
	 	Available Amount on this Distribution	 	N/A	 	$                   
	 
	 	Date	 	 	 	 
	(c)
	 	Amount of Unreimbursed drawings on Credit	 	 	 	 
	 
	 	Enhancement on this Distribution Date	 	N/A	 	$                   
	(d)
	 	Credit Enhancement Fee on this	 	 	 	 
	 
	 	Distribution Date	 	N/A	 	$                   

B-2-3

 

	14.	 	Delinquency Summary

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

	 	$                   

	 	 	 	 	 	 	 	 	 
	 	 	Delinquent Amount	 	Percentage of ending
	Payment Status	 	ending balance	 	Receivables outstanding
	30 - 59 days
	 	$	                   	 	 	 	                   	%
	60 - 179 days
	 	$	                   	 	 	 	                   	%

	15.	 	Excess Spread Percentages on this Distribution Date1

	 	 	 	 	 
	(a)

	 	Group One2
	 	                   %
	(b)

	 	Interchange Subgroup3
	 	                   %
	(c)

	 	Series 2004-2, Subseries 24
	 	                   %

	16.	 	Net Charge-Offs on this Distribution Date5

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

	 	                   %

	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

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

B-2-4

 

Exhibit C-1

Form of Master Servicer’s Monthly Certificate

Discover Card Master Trust I, Series 2004-2, Subseries 1

CREDIT CARD

PASS-THROUGH CERTIFICATES

The undersigned, a duly authorized representative of Discover Bank as Master
Servicer pursuant to the Amended and Restated Pooling and Servicing Agreement
dated as of November 3, 2004 (the “Pooling and Servicing Agreement”), and the
Series Supplement, dated as of December 2, 2004 (the “Series Supplement”) by
and between Discover Bank and U.S. Bank National Association as Trustee, does
hereby certify as follows with respect to the Series Supplement for the
Discover Card Master Trust I, Series 2004-2, Subseries 1 Certificates for the
Distribution Date occurring on _______________:

	 	 	 	 	 
	1.

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

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

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

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

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

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

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

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

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

C-1-1

 

	 	 	 	 	 
	9.

	 	The aggregate amount of Class B Principal Collections processed
during [month] [year] is equal to
	 	$                   
	 
	 	 	 	 
	10.

	 	The aggregate amount of Class B Finance Charge Collections
processed during [month] [year] is equal to
	 	$                   
	 
	 	 	 	 
	11.

	 	The aggregate amount of Class B Interchange processed during
[month][year] is equal to
	 	$                   
	 
	 	 	 	 
	12a.

	 	The aggregate amount of Class B Principal Collections
recharacterized as Series Yield Collections during [month] [year] is
equal to
	 	$                   
	 
	 	 	 	 
	12b.

	 	The aggregate amount of Class B Additional Funds for this
Distribution Date is equal to
	 	$                   
	 
	 	 	 	 
	13.

	 	The amount of drawings under the Credit Enhancement required to be
made and not immediately reimbursed on the related Drawing Date
pursuant to the Series Supplement:	 	 
	 
	 	 	 	 
	

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

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

	 	(c) with respect to the Class B Investor Interest is equal
to
	 	$                   
	 
	 	 	 	 
	14.

	 	The sum of all amounts payable to the Class B Certificateholders on
the current Distribution Date is equal to
	 	$                   
	 
	 	 	 	 
	15.

	 	Attached hereto is a true copy of the statement required to be
delivered by the Master Servicer on the date of this Certificate to the
Trustee pursuant to the section entitled Master Servicer’s Monthly
Certificate of the Series Supplement.	 	 

C-1-2

 

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

	 	 	 	 	 	 	 
	 	 	DISCOVER BANK,
	 	 	  as Master Servicer
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	 	 	Title:	 	 

C-1-3

 

Exhibit C-2

Form of Master Servicer’s Monthly Certificate

Discover Card Master Trust I, Series 2004-2, Subseries 2

CREDIT CARD

PASS-THROUGH CERTIFICATES

The undersigned, a duly authorized representative of Discover Bank as Master
Servicer pursuant to the Amended and Restated Pooling and Servicing Agreement
dated as of November 3, 2004 (the “Pooling and Servicing Agreement”), and the
Series Supplement, dated as of December 2, 2004 (the “Series Supplement”) by
and between Discover Bank and U.S. Bank National Association as Trustee, does
hereby certify as follows with respect to the Series Supplement for the
Discover Card Master Trust I, Series 2004-2, Subseries 2 Certificates for the
Distribution Date occurring on _______________:

	 	 	 	 	 
	1.

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

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

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

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

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

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

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

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

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

C-2-1

 

	 	 	 	 	 
	9.

	 	The aggregate amount of Class B Principal Collections processed
during [month] [year] is equal to
	 	$                   
	 
	 	 	 	 
	10.

	 	The aggregate amount of Class B Finance Charge Collections
processed during [month] [year] is equal to
	 	$                   
	 
	 	 	 	 
	11.

	 	The aggregate amount of Class B Interchange processed during
[month][year] is equal to
	 	$                   
	 
	 	 	 	 
	12a.

	 	The aggregate amount of Class B Principal Collections
recharacterized as Series Yield Collections during [month] [year] is
equal to
	 	$                   
	 
	 	 	 	 
	12b.

	 	The aggregate amount of Class B Additional Funds for this
Distribution Date is equal to
	 	$                   
	 
	 	 	 	 
	13.

	 	The amount of drawings under the Credit Enhancement required to be
made and not immediately reimbursed on the related Drawing Date
pursuant to the Series Supplement:	 	 
	 
	 	 	 	 
	

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

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

	 	(c) with respect to the Class B Investor Interest is equal
to
	 	$                   
	 
	 	 	 	 
	14.

	 	The sum of all amounts payable to the Class B Certificateholders on
the current Distribution Date is equal to
	 	$                   
	 
	 	 	 	 
	15.

	 	Attached hereto is a true copy of the statement required to be
delivered by the Master Servicer on the date of this Certificate to the
Trustee pursuant to the section entitled Master Servicer’s Monthly
Certificate of the Series Supplement.	 	 

C-2-2

 

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

	 	 	 	 	 	 	 
	 	 	DISCOVER BANK,
	 	 	  as Master Servicer
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	 	 	Title:	 	 

C-2-3exv4w3

 

Exhibit 4.3

CREDIT ENHANCEMENT AGREEMENT

among

U.S. BANK NATIONAL ASSOCIATION

as Trustee,

DISCOVER BANK

as Master Servicer, Servicer and Seller

and

DISCOVER RECEIVABLES FINANCING CORPORATION

as Credit Enhancement Provider

Dated as of December 2, 2004

DISCOVER CARD MASTER TRUST I

SERIES 2004-2, SUBSERIES 1

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	SECTION 1.

	 	Defined Terms
	 	 	2	 
	SECTION 2.

	 	Loan
	 	 	3	 
	SECTION 3.

	 	Calculation of Amount of Interest Payable on the Loan
	 	 	3	 
	SECTION 4.

	 	Payment of Interest on the Loan
	 	 	4	 
	SECTION 5.

	 	Repayment of Principal of the Loan
	 	 	4	 
	SECTION 6.

	 	Payments to the Holder of the Seller Certificate and the Master Servicer
	 	 	4	 
	SECTION 7.

	 	Deposits to and Withdrawals from the Credit Enhancement Account
	 	 	5	 
	SECTION 8.

	 	Certain Additional Loans
	 	 	6	 
	SECTION 9.

	 	Limited Obligation; Waiver of Setoff; Obligations Absolute
	 	 	6	 
	SECTION 10.

	 	Investments and Information
	 	 	7	 
	SECTION 11.

	 	Servicing Transfer
	 	 	7	 
	SECTION 12.

	 	Representations and Warranties
	 	 	7	 
	SECTION 13.

	 	Covenants
	 	 	8	 
	SECTION 14.

	 	Governing Law
	 	 	9	 
	SECTION 15.

	 	Termination
	 	 	9	 
	SECTION 16.

	 	Notices
	 	 	9	 
	SECTION 17.

	 	Bankruptcy
	 	 	10	 
	SECTION 18.

	 	Limitation of Remedies
	 	 	10	 
	SECTION 19.

	 	No Petition
	 	 	10	 
	SECTION 20.

	 	Amendments
	 	 	10	 
	SECTION 21.

	 	Successors and Assigns; Replacement of Credit Enhancement Provider
	 	 	10	 
	SECTION 22.

	 	Participation
	 	 	11	 

     CREDIT ENHANCEMENT AGREEMENT, dated as of December 2, 2004, among U.S.
BANK NATIONAL ASSOCIATION (formerly First Bank National Association, successor
trustee to

1

 

Bank of America Illinois, formerly Continental Bank, National Association)
as trustee (together with its successors and assigns as trustee, the “Trustee”)
for Discover Card Master Trust I (the “Trust”), DISCOVER BANK (formerly
Greenwood Trust Company) (“Discover Bank”) as Master Servicer, Servicer and
Seller with respect to the Trust and DISCOVER RECEIVABLES FINANCING CORPORATION
as cash collateral depositor (the “Credit Enhancement Provider”).

W I T N E S S E T H

     WHEREAS, Discover Bank as Master Servicer, Servicer and Seller and the
Trustee have entered into an Amended and Restated Pooling and Servicing
Agreement, dated as of November 3, 2004 (as the same may from time to time be
amended, modified or otherwise supplemented, the “Pooling and Servicing
Agreement”), and that certain Series Supplement, dated as of December 2, 2004
(as the same may from time to time be amended, modified or otherwise
supplemented, the “Series Supplement”);

     WHEREAS, the Trust, pursuant to the Pooling and Servicing Agreement and
the Series Supplement, is issuing $1,315,790,000 in aggregate principal amount
of Investor Certificates of Discover Card Master Trust I, Series 2004-2,
Subseries 1 (the “Series”), which will entitle the holders thereof to interest
during the Revolving Period, the Accumulation Period, and the Amortization
Period, if any, and principal on the Class A Expected Final Payment Date, the
Class B Expected Final Payment Date and during the Amortization Period, if any;

     WHEREAS, the principal and interest payments on the Investor Certificates
are to be funded by Principal Collections and Finance Charge Collections
received by the Trust on the Receivables and other Trust income; and

     WHEREAS, it is a condition to the issuance of the Investor Certificates
that at the closing on the date hereof, the Credit Enhancement Provider make a
term loan (the “Loan”) to the Trust, for the benefit of the Investor
Certificateholders of the Series, of $98,684,250 (7.5% of the Series Initial
Investor Interest), for deposit in the Credit Enhancement Account to provide
additional funds to make payments on the Investor Certificates under certain
circumstances.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and adequacy of which
are hereby expressly acknowledged, the parties hereto agree as follows:

     SECTION 1. DEFINED TERMS.

     (a) The capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
or the Series Supplement, as applicable; provided, however, that such defined
terms shall only have the meanings applicable to Subseries 1 of Series 2004-2.

     (b) The following terms have the definitions set forth below:

     “Interest Period” means (i) with respect to the initial Distribution Date,
the period commencing on the Series Closing Date and ending on the day
immediately preceding the initial Distribution Date and (ii) with respect to
each subsequent Distribution Date, the period commencing on the preceding
Distribution Date and ending on the day immediately preceding such Distribution
Date.

     “Lender Rate” means, with respect to each Interest Period, the prime
commercial lending rate per annum established by the Trustee, as in effect on
each day in the Interest Period.

2

 

     “LIBOR-Based Rate” means, with respect to each Interest Period, the per
annum interest rate equal to the London Interbank Offered Rate which appears on
Telerate Page 3750 at approximately 11:00 a.m. (London time) two LIBOR Business
Days prior to the first day of such Interest Period for deposits of United
States dollars for a period of time comparable to the Interest Period, and in
an amount comparable to the principal amount of the Loan, plus 0.50%.

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

     “Provider Amount” means, with respect to each Distribution Date, the
lesser of (i) the unpaid principal amount of the Loan (including any amounts
loaned by the Credit Enhancement Provider pursuant to Section 8 hereof) and
(ii) the amount on deposit in the Credit Enhancement Account, in each case
before giving effect to any payments, allocations or distributions on such
Distribution Date.

     “Series Interest Payment Amount” means, for any Distribution Date, an
amount equal to the amount of interest payable on the Loan on such Distribution
Date, including any accrued but unpaid interest with respect to previous
Interest Periods and interest thereon, less the amount paid to the Credit
Enhancement Provider on such Distribution Date pursuant to Section 4(a) hereof.
The Series Interest Payment Amount shall be the amount of interest payable
pursuant to this Agreement for purposes of calculating the “Credit Enhancement
Fee” for the purpose of, and as such term is defined in, the Series Supplement
and such amount shall be paid in accordance with the provisions of the Series
Supplement.

     SECTION 2. LOAN. The Credit Enhancement Provider hereby makes a term loan
to the Trust, for the benefit of the Investor Certificateholders of the Series,
on the Series Closing Date in an amount equal to $98,684,250, receipt of which
is hereby acknowledged by the Trustee. The amount of such Loan shall be
increased by the amount of any additional loan made by the Credit Enhancement
Provider pursuant to Section 8 hereof.

     SECTION 3. CALCULATION OF AMOUNT OF INTEREST PAYABLE ON THE LOAN.

     (a) The Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum determined for such day as follows.
To the extent the unpaid portion of the principal of the Loan during such
Interest Period equals or is less than the amount on deposit in the Credit
Enhancement Account, the rate for such Interest Period on such principal
portion shall be the LIBOR-Based Rate. To the extent any portion of the unpaid
principal of the Loan exceeds such amount on deposit, the rate for such
Interest Period on such principal portion shall be the Lender Rate.

     (b) Interest shall be payable monthly in arrears on each Distribution
Date. Interest on the Loan shall be calculated on the basis of the actual
number of days elapsed during the applicable Interest Period divided by (i)
360, to the extent the LIBOR-Based Rate is applicable, or (ii) 365 or 366, as
the case may be, to the extent the Lender Rate is applicable. The Trustee
shall, as soon as practicable, notify the Seller, the Master Servicer and the
Credit Enhancement Provider of each determination of the Lender Rate and of the
LIBOR-Based Rate. Each determination thereof by the Trustee pursuant to the
provisions of this Agreement shall be conclusive and binding on the Seller, the
Master Servicer and the Credit Enhancement Provider, in the absence of manifest
error.

3

 

     (c) If any portion of interest due and payable on a Distribution Date is
not paid on such Distribution Date, the unpaid portion of such interest shall
be due and payable on the next succeeding Distribution Date. Any interest that
is not paid on the due date thereof shall accrue interest from the Distribution
Date on which such interest was due and payable to the date such interest is
actually paid at a rate per annum equal to the Lender Rate.

     SECTION 4. PAYMENT OF INTEREST ON THE LOAN. On each Distribution Date,
the Trustee as administrator of the Credit Enhancement shall pay or cause to be
paid to the Credit Enhancement Provider the amount of accrued but unpaid
interest on the Loan from the funds and in the order of priority set forth
below; provided, however, that such payments shall not exceed the amount of
accrued but unpaid interest on the Loan and that such payments will be made
only to the extent such funds are available:

     (a) interest and earnings (net of losses and investment expenses) accrued
since the preceding Distribution Date on the Provider Amount; and

     (b) the Series Interest Payment Amount, to the extent such amount has been
paid to the Trustee as administrator of the Credit Enhancement pursuant to the
Series Supplement.

     SECTION 5. REPAYMENT OF PRINCIPAL OF THE LOAN. The principal amount of
the Loan shall be due and payable on the Series Termination Date. The Trust
shall repay the unpaid principal balance of the Loan in full on or before the
Series Termination Date in accordance with the provisions of this Agreement;
provided, however, that the unpaid principal amount of the Loan shall only be
paid from the funds described below, and only to the extent such funds are
available.

     (a) If, as of any Distribution Date, after giving effect to all other
deposits to and withdrawals from the Credit Enhancement Account as of such
Distribution Date, the amount on deposit in the Credit Enhancement Account
exceeds the Total Maximum Credit Enhancement Amount, (i) the amount of such
excess, up to the amount, if any, by which the amount on deposit in the Credit
Enhancement Account exceeds the unpaid principal amount of the Loan, shall be
withdrawn from the Credit Enhancement Account and paid to Discover Bank on
behalf of the Holder of the Seller Certificate and (ii) the remaining amount of
such excess, if any, after payment of any amounts to be paid to Discover Bank
on behalf of the Holder of the Seller Certificate pursuant to clause (i) of
this Section 5(a), shall be withdrawn from the Credit Enhancement Account and
paid to the Credit Enhancement Provider for application toward the unpaid
principal amount of the Loan.

     (b) On the earlier to occur of (i) the Series Termination Date and (ii)
the day on which the Class Invested Amount with respect to each Class of the
Series is paid in full, and after payment of any amounts to be paid on such day
from the Credit Enhancement Account to or for the benefit of the Investor
Certificateholders of the Series, all amounts remaining on deposit in the
Credit Enhancement Account, up to the amount of the unpaid principal amount of
the Loan, shall be withdrawn from such account and paid to the Credit
Enhancement Provider for application toward the unpaid principal amount of the
Loan.

     SECTION 6. PAYMENTS TO THE HOLDER OF THE SELLER CERTIFICATE AND THE MASTER
SERVICER.

     (a) On each Distribution Date, the Trustee as administrator of the Credit
Enhancement shall pay or cause to be paid to Discover Bank on behalf of the
Holder of the Seller Certificate (i) the interest and earnings (net of losses
and investment expenses) accrued since the

4

 

preceding Distribution Date on an amount equal to the positive difference,
if any, between (x) the amount on deposit in the Credit Enhancement Account and
(y) the Provider Amount and (ii) the positive difference, if any, between (x)
the amount of interest and earnings (net of losses and investment expenses)
accrued since the preceding Distribution Date on the Provider Amount and (y)
the amount paid to the Credit Enhancement Provider on such Distribution Date
pursuant to Section 4(a).

     (b) On each Distribution Date, an amount equal to the amount, if any, paid
to the Trustee as administrator of the Credit Enhancement pursuant to Section
9(b)(27) and 9(b)(32) of the Series Supplement, shall be paid to Discover Bank
on behalf of the Holder of the Seller Certificate.

     (c) On the earlier to occur of (i) the Series Termination Date and (ii)
the day on which the Class Invested Amount with respect to each Class of the
Series is paid in full, and after payment of any amounts to be paid on such day
from the Credit Enhancement Account to or for the benefit of the Investor
Certificateholders of the Series, any amounts remaining on deposit in the
Credit Enhancement Account that are not paid to the Credit Enhancement Provider
pursuant to Section 5(b) hereof shall be withdrawn from such account and paid
to Discover Bank on behalf of the Holder of the Seller Certificate.

     SECTION 7. DEPOSITS TO AND WITHDRAWALS FROM THE CREDIT ENHANCEMENT
ACCOUNT.

     (a) The proceeds of the Loan made by the Credit Enhancement Provider to
the Trust pursuant to Section 2 hereof, for the benefit of the Investor
Certificateholders of the Series, on the Series Closing Date and the proceeds
of any additional loan made by the Credit Enhancement Provider pursuant to
Section 8 hereof, shall be deposited into the Credit Enhancement Account. In
addition, any amounts paid to the Trustee as administrator of the Credit
Enhancement on any Distribution Date with respect to the Total Available Credit
Enhancement Amount or the Available Class B Credit Enhancement Amount pursuant
to the terms of the Series Supplement also shall be deposited into the Credit
Enhancement Account upon receipt of such funds by the Trustee.

     (b) Any withdrawals from the Credit Enhancement Account for the benefit of
the Investor Certificateholders pursuant to Section 9 of the Series Supplement
may be made by the Master Servicer or by the Trustee as administrator of the
Credit Enhancement and shall be deemed to be made first from amounts on deposit
in the Credit Enhancement Account as a result of payments of Series Excess
Servicing and other amounts to the Trustee as administrator of the Credit
Enhancement to fund the Total Available Credit Enhancement Amount, including
any Series Excess Servicing or other such amounts on deposit in the Credit
Enhancement Account as a result of an Alternative Credit Support Election
having been made or as a result of the occurrence of a Supplemental Credit
Enhancement Event, and only after such amounts are exhausted shall any such
withdrawals be deemed to be made from amounts on deposit in the Credit
Enhancement Account that are attributable to the Loan.

     (c) On or before any Distribution Date on which Discover Bank is the
Master Servicer, all payments made pursuant to this Agreement or the Series
Supplement between the Master Servicer or the Holder of the Seller Certificate
and the Credit Enhancement Account, may be aggregated for such Distribution
Date such that Discover Bank, acting as Master Servicer and as agent of the
Holder of the Seller Certificate, may make only one payment to the Credit
Enhancement Account in satisfaction of all payments of the Master Servicer and
the Holder of the Seller Certificate pursuant to this Agreement or the Series
Supplement, to the extent that all payment obligations of the Master Servicer
and the Holder of the Seller Certificate to the Credit Enhancement Account on
such Distribution Date exceed all payment obligations of the Credit Enhancement
Account to the Master Servicer and the Holder of the Seller Certificate on such
Distribution Date.

5

 

     SECTION 8. CERTAIN ADDITIONAL LOANS.

     (a) Alternative Credit Support Election. In the event that an Alternative
Credit Support Election is made pursuant to the provisions of the Series
Supplement, Discover Bank on behalf of the Holder of the Seller Certificate may
request that the Credit Enhancement Provider make an additional loan in the
amount of the Additional Credit Support Amount. If Discover Bank on behalf of
the Holder of the Seller Certificate makes such request, and if the Credit
Enhancement Provider elects to make such loan, the amount of such loan shall be
added to the unpaid principal amount of the Loan. In the event that the
Alternative Credit Support Election does not become effective, the Additional
Credit Support Amount (or, if the entire amount of the Additional Credit
Support Amount is not then on deposit in the Credit Enhancement Account, the
portion of the Additional Credit Support Amount that is then on deposit) shall
be withdrawn from the Credit Enhancement Account and repaid to Discover Bank on
behalf of the Holder of the Seller Certificate (or, if such amount was loaned
by the Credit Enhancement Provider, returned to the Credit Enhancement
Provider).

     (b) Increased Credit Enhancement Amount. In the event the Series Investor
Interest is increased pursuant to Section 32 of the Series Supplement,
requiring an Increased Credit Enhancement Amount, Discover Bank on behalf of
the Holder of the Seller Certificate may request that the Credit Enhancement
Provider make an additional loan in the amount of the Increased Credit
Enhancement Amount. If Discover Bank on behalf of the Holder of the Seller
Certificate makes such request, and if the Credit Enhancement Provider elects
to make such loan, the amount of such loan shall be added to the unpaid
principal amount of the Loan.

     (c) Supplemental Credit Enhancement Event. In the event that a
Supplemental Credit Enhancement Event occurs, Discover Bank as Servicer may
request that the Credit Enhancement Provider make an additional loan in the
amount of the Supplemental Credit Enhancement Amount. If Discover Bank as
Servicer makes such a request, and if the Credit Enhancement Provider elects to
make such loan, the amount of such loan shall be equal to the Supplemental
Credit Enhancement Amount and shall be added to the unpaid principal amount of
the Loan.

     (d) Notice. The Credit Enhancement Provider shall give prior written
notice to Moody’s and Standard & Poor’s of the making of any loan by the Credit
Enhancement Provider other than the additional loans described in this Section
8.

     (e) Interest Rate. At the time of any additional loan described in this
Section 8, Discover Bank as Servicer and the Credit Enhancement Provider may
agree in writing that the Supplemental Credit Enhancement Amount, the Increased
Credit Enhancement Amount or the Additional Credit Support Amount, as
applicable, shall bear interest at a different LIBOR-Based Rate, which rate
shall reflect prevailing market conditions and the expected duration of such
additional loan.

     SECTION 9. LIMITED OBLIGATION; WAIVER OF SETOFF; OBLIGATIONS ABSOLUTE.

     (a) Notwithstanding any provision in any other section of this Agreement
to the contrary, the obligation to repay the Loan, together with interest
thereon, shall be without recourse to any Seller, the Master Servicer, any
Servicer, the Trustee, the Trust, any Certificateholder, or any affiliate,
officer, director, employee or person acting on behalf of any of them, and the
obligation to pay such amounts shall be limited solely to the application of
funds pursuant to this Agreement, in the manner and to the extent such funds
are available, except for the direct recourse indemnification obligation of
each successor Master Servicer pursuant to Section 11 hereof. The Credit
Enhancement Provider agrees that

6

 

its interest in funds on deposit in the Credit Enhancement Account is
subordinated to the interests of the Investor Certificateholders of the Series,
as provided in this Agreement and in the Series Supplement. The Credit
Enhancement Provider further agrees that it shall have no right of setoff or
lender’s lien against any Seller, the Master Servicer, any Servicer, the
Trustee, the Trust, or any Certificateholder.

     (b) The obligations of the Seller, the Trustee, the Credit Enhancement
Provider and the Master Servicer under this Agreement shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement.

     SECTION 10. INVESTMENTS AND INFORMATION.

     (a) The Trustee shall from time to time during the term of this Agreement
invest all amounts on deposit in the Credit Enhancement Account as the Master
Servicer shall direct, which investments shall at all times be made in
compliance with the terms of the Pooling and Servicing Agreement and the Series
Supplement.

     (b) The Master Servicer shall provide the Credit Enhancement Provider with
such background information and data with respect to the Credit Enhancement
Account as the Credit Enhancement Provider may reasonably request.

     SECTION 11. SERVICING TRANSFER. In the event that a successor Master
Servicer is appointed pursuant to the Pooling and Servicing Agreement, from and
after the effective date of such transfer of servicing, the successor Master
Servicer appointed pursuant to the Pooling and Servicing Agreement, and not the
former Master Servicer, shall (a) be responsible for the performance of all
servicing functions to be performed from and after such date, (b) agree to be
bound by the terms, covenants and conditions contained herein applicable to the
Master Servicer and be subject to the duties and obligations of the Master
Servicer hereunder, and (c) agree to indemnify and hold harmless the Credit
Enhancement Provider from and against any and all claims, damages, losses,
liabilities, costs or expenses whatsoever which the Credit Enhancement Provider
may incur (or which may be claimed against the Credit Enhancement Provider) by
reason of the gross negligence or willful misconduct of the successor Master
Servicer in exercising its powers and carrying out its obligations under the
Pooling and Servicing Agreement and the Series Supplement. Such transfer of
servicing shall not affect any rights or obligations of the former Master
Servicer under this Agreement that arose prior to the effective date of the
transfer of servicing, except that such former Master Servicer shall have no
obligation to indemnify the Credit Enhancement Provider as a result of any act
or failure to act of any successor Master Servicer in the performance of the
servicing functions.

     SECTION 12. REPRESENTATIONS AND WARRANTIES.

     (a) The Credit Enhancement Provider hereby represents and warrants to the
Master Servicer and the Trustee that:

     (i) The Credit Enhancement Provider has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, and has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement.

     (ii) This Agreement has been duly authorized, executed and delivered on
the part of the Credit Enhancement Provider.

     (iii) When executed and delivered, this Agreement will constitute a valid
and binding agreement of the Credit Enhancement Provider enforceable against
the Credit Enhancement Provider in

7

 

accordance with its terms, except (A) as the same may be limited by
insolvency, bankruptcy or reorganization or other laws relating to or affecting
the enforcement of creditors’ rights and (B) as the same may be limited by
general equity principles (whether considered in a proceeding at law or in
equity) and by the discretion of the court before which any proceeding therefor
may be brought.

     (b) The Master Servicer hereby represents and warrants to the Credit
Enhancement Provider and the Trustee that:

     (i) The Master Servicer has been duly incorporated and is validly existing
as a banking corporation in good standing under the laws of the State of
Delaware, and has the corporate power and authority to execute, deliver and
perform its obligations under the Pooling and Servicing Agreement, the Series
Supplement and this Agreement.

     (ii) This Agreement, the Pooling and Servicing Agreement and the Series
Supplement have been duly authorized, executed and delivered on the part of the
Master Servicer.

     (iii) When executed and delivered, each of this Agreement, the Pooling and
Servicing Agreement and the Series Supplement will constitute a valid and
binding agreement of the Master Servicer enforceable against the Master
Servicer in accordance with its terms, except (A) as the same may be limited by
insolvency, bankruptcy, receivership or reorganization or other laws relating
to or affecting the enforcement of creditors’ rights and (B) as the same may be
limited by general equity principles (whether considered in a proceeding at law
or in equity) and by the discretion of the court before which any proceeding
therefor may be brought.

     (c) The Trustee hereby represents and warrants to the Credit Enhancement
Provider and the Master Servicer that:

     (i) The Trustee is organized, existing and in good standing under the laws
of the United States of America.

     (ii) The Trustee has full power, authority and right to execute, deliver
and perform this Agreement, the Pooling and Servicing Agreement and the Series
Supplement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement, the Pooling and Servicing
Agreement and the Series Supplement.

     (iii) Each of this Agreement, the Pooling and Servicing Agreement and the
Series Supplement have been duly executed and delivered by the Trustee.

     SECTION 13. COVENANTS. Discover Bank, as Master Servicer and on behalf of
the Holder of the Seller Certificate, covenants and agrees that, so long as
this Agreement shall remain in effect or any monetary obligation arising
hereunder or under the Series Supplement shall remain unpaid, it will change
the terms and provisions of a Credit Agreement with respect to a Discover Bank
Discover Card Account or any other Account with respect to which it is the
Servicer (including, without limitation, the calculation of the amount, or the
timing, of charge-offs) only if it does not believe, after a good faith
assessment of the expected effects of such change, that such change will result
in a reduction of the Portfolio Yield, for any Due Period beginning prior to
the termination of the Series, to less than the Base Rate unless such change
(i) is required by any Requirements of Law or (ii) is deemed necessary by
Discover Bank in its sole reasonable judgment to maintain its credit card
business on a competitive basis. For purposes of this Section 13, “Base Rate”
shall mean (i) the weighted average of the Certificate Rates for each Class of
each Series then outstanding plus (ii) 1% per annum. For purposes of the
immediately preceding sentence, the Certificate Rate for each Class that does
not have a fixed Certificate Rate shall be

8

 

the actual Certificate Rate for such Class for the Interest Accrual Period
commencing in the immediately preceding Due Period. In the event that any
Additional Seller shall transfer Receivables in Additional Accounts to the
Trust, Discover Bank on behalf of the Holder of the Seller Certificate shall
cause the Servicer with respect to such Additional Accounts to make the
covenant set forth above with respect to such Additional Accounts.

     SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 15. TERMINATION. This Agreement shall terminate on the date on
which the Series terminates in accordance with the provisions of the Pooling
and Servicing Agreement and the Series Supplement; provided, however, that this
Agreement may be terminated by the Master Servicer at any time, without
penalty, provided that such termination does not cause the ratings of the
Investor Certificates to be lowered or withdrawn by either of the Rating
Agencies; and provided, further, that all amounts owing to the Credit
Enhancement Provider hereunder with respect to principal and interest on the
Loan shall have been paid in full. Notwithstanding the foregoing, the Credit
Enhancement Provider shall have no rights under this Agreement, and shall not
be entitled to any payments hereunder, if and for so long as there is no Loan
outstanding hereunder and no accrued but unpaid interest.

     SECTION 16. NOTICES. Unless specifically indicated otherwise herein, all
notices and other communications provided for hereunder shall be in writing
and, if to the Credit Enhancement Provider, addressed to:

Discover Receivables Financing Corporation

12 Read’s Way

New Castle, Delaware 19720

Attn: Executive Vice President and Secretary

Phone: (302) 323-7167

Fax: (302) 323-7393

or, if to the Seller or the Master Servicer, addressed to:

Discover Bank

12 Read’s Way

New Castle, Delaware 19720

Attn: Michael F. Rickert

Phone: (302) 323-7434

Fax: (302) 323-7393

or, if to the Trustee, addressed to:

U.S. Bank National Association

209 South LaSalle Street

Suite 300

Chicago, Illinois 60604

Attn: Patricia M. Child

Phone: (312) 836-6713

Fax: (312) 836-6701

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or as to any party at such other address as shall be designated by such party
in a written notice to the other parties.

     Any notice or other communication shall be sufficiently given and shall be
deemed given when delivered to the addressee in writing or when transmitted by
telecopier, receipt of which by the addressee is confirmed by telephone.

     SECTION 17. BANKRUPTCY. To the extent that the Trustee, the Master
Servicer or Discover Bank on behalf of the Holder of the Seller Certificate
makes a payment to the Credit Enhancement Provider or the Credit Enhancement
Provider receives any payment or proceeds with respect to the Loan, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any state or federal insolvency or
bankruptcy law then, to the extent such payment or proceeds are set aside, the
amount or part thereof intended to be satisfied shall be revived and continue
in full force and effect, as if such payment or proceeds had not been received
by the Credit Enhancement Provider.

     SECTION 18. LIMITATION OF REMEDIES. The Credit Enhancement Provider shall
not have the right to cause the Loan or any portion thereof to become due and
payable prior to the due date for the Loan as set forth herein.

     SECTION 19. NO PETITION.

     (a) The Credit Enhancement Provider, by entering into this Agreement,
hereby covenants and agrees that it will not at any time institute, join in or
otherwise cause the institution of, against any Seller, the Master Servicer or
the Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state or similar law prior to a year and a day after the final payment of
all investor certificates issued by any trust with respect to which Discover
Bank is the seller.

     (b) Each of Discover Bank and the Trustee, by entering into this
Agreement, hereby covenants and agrees that it will not at any time institute,
join in or otherwise cause the institution of, against the Credit Enhancement
Provider, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state or similar law prior to a year and a day after the final payment of
all investor certificates issued by any trust with respect to which Discover
Bank is the seller.

     SECTION 20. AMENDMENTS. This Agreement shall not be amended or modified
without the written consent of each of the parties hereto. No amendment hereto
shall become effective without prior confirmation from the Rating Agencies that
such amendment will not cause a lowering or withdrawal of the then current
ratings of the Investor Certificates of the Series. The Master Servicer shall
provide a copy of any amendment hereto to the Rating Agencies.

     SECTION 21. SUCCESSORS AND ASSIGNS; REPLACEMENT OF CREDIT ENHANCEMENT
PROVIDER.

     (a) This Agreement shall be binding upon, and inure to the benefit of, the
Trustee, the Sellers, the Servicers, the Master Servicer and the Credit
Enhancement Provider and their respective successors and permitted assigns.

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     (b) No Seller shall assign its interests hereunder and under the Pooling
and Servicing Agreement or the Series Supplement, or any portion of such
interests, except by an assignment that transfers each such interest to the
same assignee.

     (c) In the event that a successor trustee is appointed pursuant to the
provisions of the Pooling and Servicing Agreement to replace the then current
Trustee, such successor trustee, from and after its appointment, shall be the
Trustee for purposes of this Agreement and shall assume all of the rights and
obligations of the Trustee hereunder.

     (d) The Credit Enhancement Provider may not assign any of its rights or
obligations hereunder without the prior written consent of Discover Bank on
behalf of the Holder of the Seller Certificate and without prior written
confirmation from the Rating Agencies that such assignment will not result in
the lowering or withdrawal of the rating of any Class of any Series then
outstanding.

     SECTION 22. PARTICIPATION. Any successor Credit Enhancement Provider that
is not a special-purpose corporation that is an affiliate of Discover Bank may,
without the consent of the Trustee, the Trust, any Seller, the Master Servicer,
any Servicer or any Certificateholder of the Series, sell participations to one
or more banks or other entities in all or a portion of its rights under this
Agreement (including all or a portion of the Loan); provided, however, that (a)
the Credit Enhancement Provider’s obligations under this Agreement shall remain
unchanged, (b) the Credit Enhancement Provider shall remain solely responsible
to the other parties hereto for the performance of such obligations, (c) the
Trustee, the Trust, the Sellers and the Master Servicer shall continue to deal
solely and directly with the Credit Enhancement Provider in connection with the
Credit Enhancement Provider’s rights and obligations under this Agreement, and
(d) the Credit Enhancement Provider shall retain the sole right to enforce the
obligations of the Trustee, the Trust, the Sellers or the Master Servicer under
this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement.

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     IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed and delivered by the undersigned thereunto duly authorized as of
the day and year first above written.

	 	 	 	 	 	 	 
	 	 	DISCOVER RECEIVABLES FINANCING CORPORATION,

as Credit Enhancement Provider
	 
	 	 	 	 	 	 
	 	 	By: 	 	/s/ Jai Sooklal

Name: Jai Sooklal
	

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	DISCOVER BANK,
	 	 	as Master Servicer, Servicer and Seller
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Michael F. Rickert

Name: Michael F. Rickert
	

	 	 	 	Title:
	 	Vice President, Chief Accounting Officer and Treasurer
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	 as Trustee
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Patricia M. Child

Name: Patricia M. Child
	

	 	 	 	Title:
	 	Vice President

12

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