Document:

<PAGE>   1
                                                                     EXHIBIT 4.9

                       [FORM OF FACE OF EXCHANGE SECURITY]

                  UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

<PAGE>   2

No.:                                                          CUSIP No.:
                                                              ISIN No.:

                   12-1/4% Senior Subordinated Notes Due 2010

                  Flowserve Corporation, a New York corporation, promises to pay
to Cede & Co, or registered assigns, the principal amount set forth on Schedule
A hereto on August 15, 2010.

                  Interest Payment Dates: February 15 and August 15.

                  Record Dates: February 1 and August 1.

                  Additional provisions of this Security are set forth on the
other side of this Security.

Dated:

<PAGE>   3

                                        FLOWSERVE CORPORATION,

                                           By:
                                              ----------------------------------
                                              Name: Renee Hornbaker
                                              Title: Vice President and
                                                     Chief Financial Officer

                                        FLOWSERVE FINANCE B.V.,

                                           By:
                                              ----------------------------------
                                              Name: John M. Nanos
                                              Title: Managing Director

                                        FLOWSERVE RED CORPORATION,
                                        FLOWSERVE FSD CORPORATION,
                                        FLOWSERVE FCD CORPORATION,
                                        FLOWSERVE INTERNATIONAL, INC.,
                                        FLOWSERVE MANAGEMENT COMPANY
                                        (DE BUSINESS TRUST),
                                        BW/IP-NEW MEXICO, INC.,
                                        FLOWSERVE INTERNATIONAL, LLC,
                                        DURAMETALLIC AUSTRALIA HOLDING COMPANY,
                                        FLOWSERVE INTERNATIONAL LIMITED,
                                        INNOVATIVE VALVE TECHNOLOGIES, INC.,
                                        PLANT MAINTENANCE, INC.,
                                        VARCO VALVE, INC.,
                                        COLONIAL EQUIPMENT & SERVICE CO., INC.,
                                        CECORP, INC.,
                                        DIVT ACQUISITION-DELAWARE, LLC,
                                        DIVT SUBSIDIARY, LLC,
                                        SOUTHERN VALVE SERVICE, INC.,
                                        L.T. KOPPL INDUSTRIES, INC.,
                                        KOPPL COMPANY,
                                        KOPPL INDUSTRIAL SYSTEMS, INC.,
                                        HARLEY INDUSTRIES, INC.,
                                        KOPPL COMPANY OF ARIZONA,
                                        SEELEY & JONES, INCORPORATED,
                                        GSV, INC.,
                                        IPSCO-FLORIDA, INC.,
                                        INTERNATIONAL PIPING SERVICES COMPANY,
                                        CYPRESS INDUSTRIES, INC.,
                                        DALCO, LLC,
                                        PLANT SPECIALTIES, INC.,
                                        ENERGY MAINTENANCE, INC.,
                                        PREVENTIVE MAINTENANCE, INC.,
                                        PRODUCTION MACHINE INCORPORATED,

<PAGE>   4

                                        ICE LIQUIDATING, INC.,
                                        VALVE REPAIR OF SOUTH CAROLINA, INC.,
                                        THE SAFE SEAL COMPANY, INC.,
                                        FLICKINGER-BENICIA INC.,
                                        PUGET INVESTMENTS, INC.,
                                        STEAM SUPPLY & RUBBER CO., INC.,
                                        FLICKINGER COMPANY,
                                        BOYDEN, INC.,
                                        VALVE ACTUATION & REPAIR CO.,
                                        INGERSOLL-DRESSER PUMP COMPANY,
                                        IDP ALTERNATE ENERGY COMPANY,
                                        ENERGY HYDRO, INC.
                                        PUMP INVESTMENTS, INC.
                                        FLOWSERVE HOLDINGS, INC.
                                        IPSCO HOLDING, INC.

                                           By:
                                              ----------------------------------
                                              Name: John M. Nanos
                                              Title:

<PAGE>   5

TRUSTEE'S CERTIFICATE OF
         AUTHENTICATION

THE BANK OF NEW YORK,
   as Trustee, certifies
             that this is one of
             the Securities referred
             to in the Indenture.

by

   ------------------------------
   Authorized Signatory

<PAGE>   6

                   [FORM OF REVERSE SIDE OF EXCHANGE SECURITY]

                   12-1/4% Senior Subordinated Notes Due 2010

1. Interest

         Flowserve Corporation, a New York corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.50% per annum
(increasing by an additional 0.50% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 2.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. The Company will pay interest
semiannually on February 15 and August 15 of each year, commencing February 15,
2001. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from August 8, 2000.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at 1% per annum in
excess of the above rate and will pay interest on overdue installments of
interest at such higher rate to the extent lawful.

2. Method of Payment

         The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1 or August 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by

<PAGE>   7

The Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

         Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.

4. Indenture

         The Company issued the Securities under an Indenture dated as of August
8, 2000 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections  77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.

         The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments;

<PAGE>   8

issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of subsidiaries; consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.

5. Optional Redemption

                  Except as set forth below, the Company shall not be entitled
to redeem the Securities at its option prior to August 15, 2005.

                  On and after August 15, 2005, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on August 15 of the
years set forth below:

                  Period                             Redemption
                  ------                               Price
                                                     ----------
                  2005                               106.125%
                  2006                               104.083
                  2007                               102.042
                  2008 and thereafter                100.000%

                  In addition, prior to August 15, 2003, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 112.25%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or
more Public Equity Offerings; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 60 days after the
closing date of the related Public Equity Offering.

<PAGE>   9

6. Notice of Redemption

                  Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.

7. Put Provisions

                  Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.

8. Subordination

                  The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.

9. Subsidiary Guaranties

                  The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior subordinated basis by each of the Subsidiary
Guarantors.

<PAGE>   10

10. Denominations; Transfer; Exchange

                  The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

11. Persons Deemed Owners

                  The registered Holder of this Security may be treated as the
owner of it for all purposes.

12. Unclaimed Money

                  If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

13.  Discharge and Defeasance

                  Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

14. Amendment, Waiver

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provi-

<PAGE>   11

sion may be waived with the written consent of the Holders of a majority in
principal amount outstanding of the Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Securityholder, the
Company, the Subsidiary Guarantors and the Trustee shall be entitled to amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities, including Subsidiary
Guaranties, or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
Guarantors, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make certain changes in the
subordination provisions, or to make any change that does not adversely affect
the rights of any Securityholder.

15. Defaults and Remedies

                  Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company to
comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company, the Significant Subsidiaries or the Subsidiary
Guarantors if the amount accelerated (or so unpaid) exceeds $10 million; (v)
certain events of bankruptcy or insolvency with respect to the Company, the
Subsidiary Guarantors or the Significant Subsidiaries; (vi) certain judgments or
decrees for the payment of money in excess of $10 million and (vii) certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The

<PAGE>   12

Trustee may refuse to enforce the Indenture or the Securities unless it receives
indemnity or security satisfactory to it. Subject to certain limitations,
Holders of a majority in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in the
interest of the Holders.

16. Trustee Dealings with the Company

                  Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

17. No Recourse Against Others

                  A director, officer, employee or stockholder, as such, of the
Company, and Subsidiary Guarantor or the Trustee shall not have any liability
for any obligations of the Company or any Subsidiary Guarantor under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.

18. Authentication

                  This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19. Abbreviations

                  Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

<PAGE>   13

20. CUSIP Numbers

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

21. Holders' Compliance with Registration Rights Agreement.

                  Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

22. GOVERNING LAW.

                  THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                  The Company will furnish to any Securityholder upon written
request and without charge to the security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:

                  Flowserve Corporation
                  222 West Las Colinas Blvd.
                  Suite 1500
                  Irving, TX 75039
                  Attention:  Renee Hornbaker

<PAGE>   14

--------------------------------------------------------------------------------
                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

         (Print or type assignee's name, address and zip code)

         (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                          agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.

--------------------------------------------------------------------------------

Date:                       Your Signature:
     ---------------------                 -------------------------------------

--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

        (1)        [ ]   to the Company; or

        (2)        [ ]   pursuant to an effective registration statement under
                         the Securities Act of 1933; or

        (3)        [ ]   inside the United States to a "qualified
                         institutional buyer" (as defined in Rule 144A under the
                         Securities Act of 1933) that purchases for its own
                         account or for the

<PAGE>   15

                         account of a qualified institutional buyer to whom
                         notice is given that such transfer is being made in
                         reliance on Rule 144A, in each case pursuant to and in
                         compliance with Rule 144A under the Securities Act of
                         1933; or

        (4)        [ ]   outside the United States in an offshore transaction
                         within the meaning of Regulation S under the Securities
                         Act in compliance with Rule 904 under the Securities
                         Act of 1933; or

        (5)        [ ]   pursuant to the exemption from registration provided by
                         Rule 144 under the Securities Act of 1933.

        Unless one of the boxes is checked, the Trustee will refuse to register
        any of the Securities evidenced by this certificate in the name of any
        person other than the registered holder thereof; provided, however, that
        if box (4) or (5) is checked, the Trustee shall be entitled to require,
        prior to registering any such transfer of the Securities, such legal
        opinions, certifications and other information as the Company has
        reasonably requested to confirm that such transfer is being made
        pursuant to an exemption from, or in a transaction not subject to, the
        registration requirements of the Securities Act of 1933, such as the
        exemption provided by Rule 144 under such Act.

                                            ------------------------
                                            Signature

Signature Guarantee:

----------------------------                ------------------------
Signature must be guaranteed                Signature

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

<PAGE>   16

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

                  The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Dated:
      ----------------------------        --------------------------------------
                                          NOTICE: To be executed by
                                                  an executive officer

<PAGE>   17

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

                  The original principal amount of this Global Security is
_____________. The following increases or decreases in this Global Security have
been made:

<TABLE>
<S>        <C>                    <C>                   <C>                    <C>
Date of     Amount of decrease     Amount of increase    Principal amount of    Signature of
Exchange    in Principal  amount   in Principal amount   this Global Security   authorized officer
            of this Global         of this Global        following such         of Trustee or
            Security               Security              decrease or increase)  Securities Custodian
</TABLE>

<PAGE>   18

                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06, 4.09 or 4.10 of the Indenture, check the box:

                                       [ ]

                  If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06, 4.09 or 4.10 of the
Indenture, state the amount in principal amount: $

Date:                              Your Signature:
     ------------------------                     ------------------------------
                                                  (Sign exactly as your name
                                                   appears on the other side of
                                                   this Security.)

Signature Guarantee:
                     ---------------------------------------------------
                              (Signature must be guaranteed)

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                       13
<PAGE>   19

                       [FORM OF FACE OF EXCHANGE SECURITY]

                  UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE EUROCLEAR CLEARANCE SYSTEM ("EUROCLEAR") OR CLEARSTREAM
BANKING, SOCIETE ANONYME ("CLEARSTREAM"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF BANK OF NEW YORK DEPOSITARY (NOMINEES) LIMITED OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CLEARSTREAM OR
EUROCLEAR, AS THE CASE MAY BE (AND ANY PAYMENT IS MADE TO THE BANK OF NEW YORK
DEPOSITARY (NOMINEES) LIMITED, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF CLEARSTREAM OR EUROCLEAR, AS THE CASE MAY BE), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, THE BANK OF NEW YORK
DEPOSITARY (NOMINEES) LIMITED, HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CLEARSTREAM OR EUROCLEAR, AS
THE CASE MAY BE, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.

<PAGE>   20

No.:     ISIN No.:
                                                                Common Code No.:

                   12-1/4% Senior Subordinated Notes Due 2010

                  Flowserve Finance B.V., a Netherlands besloten vennootschap
with corporate seat in Amsterdam, promises to pay to The Bank of New York
Depositary (Nominees) Limited, or registered assigns, the principal amount set
forth on Schedule A hereto on August 15, 2010.

                  Interest Payment Dates: February 15 and August 15.

                  Record Dates:  February 1 and August 1.

                  Additional provisions of this Security are set forth on the
other side of this Security.

Dated:

<PAGE>   21

                                 FLOWSERVE FINANCE B.V.,

                                       by
                                          --------------------------------
                                       Name: John M. Nanos
                                       Title: Managing Director

                                       by
                                          --------------------------------
                                       Name: M. Kathleen McVay
                                       Title: Managing Director

                                 FLOWSERVE CORPORATION,

                                       by
                                          --------------------------------
                                       Name: Renee J. Hornbaker
                                       Title: Vice President and
                                              Chief Financial Officer

                                 FLOWSERVE RED CORPORATION,
                                 FLOWSERVE FSD CORPORATION,
                                 FLOWSERVE FCD CORPORATION,
                                 FLOWSERVE INTERNATIONAL, INC.,
                                 FLOWSERVE MANAGEMENT COMPANY
                                 (DE BUSINESS TRUST),
                                 BW/IP-NEW MEXICO, INC.,
                                 FLOWSERVE INTERNATIONAL, LLC,

<PAGE>   22

                                 DURAMETALLIC AUSTRALIA HOLDING COMPANY,
                                 FLOWSERV INTERNATIONAL LIMITED,
                                 INNOVATIVE VALVE TECHNOLOGIES, INC.,
                                 PLANT MAINTENANCE, INC.,
                                 VARCO VALVE, INC.,
                                 COLONIAL EQUIPMENT & SERVICE CO., INC.,
                                 CECORP, INC.,
                                 DIVT ACQUISITION-DELAWARE, LLC,
                                 DIVT SUBSIDIARY, LLC,
                                 SOUTHERN VALVE SERVICE, INC.,
                                 L.T. KOPPL INDUSTRIES, INC.,
                                 KOPPL COMPANY,
                                 KOPPL INDUSTRIAL SYSTEMS, INC.,
                                 HARLEY INDUSTRIES, INC.,
                                 KOPPL COMPANY OF ARIZONA,
                                 SEELEY & JONES, INCORPORATED,
                                 GSV, INC.,
                                 IPSCO-FLORIDA, INC.,
                                 INTERNATIONAL PIPING SERVICES COMPANY,
                                 CYPRESS INDUSTRIES, INC.,
                                 DALCO, LLC,
                                 PLANT SPECIALTIES, INC.,
                                 ENERGY MAINTENANCE, INC.,
                                 PREVENTIVE MAINTENANCE, INC.,
                                 PRODUCTION MACHINE INCORPORATED,
                                 ICE LIQUIDATING, INC.,
                                 VALVE REPAIR OF SOUTH CAROLINA, INC.,
                                 THE SAFE SEAL COMPANY, INC.,
                                 FLICKINGER-BENICIA INC.,
                                 PUGET INVESTMENTS, INC.,
                                 STEAM SUPPLY & RUBBER CO., INC.,
                                 FLICKINGER COMPANY,
                                 BOYDEN INC.,
                                 VALVE ACTUATION & REPAIR CO.,
                                 INGERSOLL-DRESSER PUMP COMPANY,
                                 IDP ALTERNATE ENERGY COMPANY,
                                 ENERGY HYDRO, INC.,
                                 PUMP INVESTMENTS, INC.,
                                 FLOWSERVE HOLDINGS, INC.,
                                 IPSCO HOLDING, INC.,

                                       by
                                          ----------------------
                                       Name: John M. Nanos
                                       Title:

<PAGE>   23

TRUSTEE'S CERTIFICATE OF
    AUTHENTICATION

THE BANK OF NEW YORK,
  as Trustee, certifies
            that this is one of
            the Securities referred
            to in the Indenture.

by
  ------------------------------
  Authorized Signatory

<PAGE>   24

                                                                               1

                  [FORM OF REVERSE SIDE OF [EXCHANGE SECURITY]

                   12-1/4% Senior Subordinated Notes Due 2010

1. Interest

                  Flowserve Finance B.V., a Netherlands besloten vennootschap
with corporate seat in Amsterdam, (such besloten vennootschap, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Issuer"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.50% per annum
(increasing by an additional 0.50% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 2.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. The Issuer will pay interest
semiannually on February 15 and August 15 of each year, commencing February 15,
2001. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from August 8, 2000.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Issuer will pay interest on overdue principal at 1% per annum in
excess of the above rate and will pay interest on overdue installments of
interest at such higher rate to the extent lawful.

<PAGE>   25
                                                                               2

2. Method of Payment

                  The Issuer will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the February 1 or August 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Issuer will pay principal and interest
in Euro or any successor money of the European Union that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by the Depository. The Issuer will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a Euro account maintained by the payee with a bank in a member state of the
European Union if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

                  Initially, (a) The Bank of New York, a New York banking
corporation (the "Trustee"), will act as Trustee, U.S. Paying Agent and
Registrar, and (b) Banque Internationale a Luxembourg will act as Luxembourg
Paying Agent. The Issuer may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Issuer or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. Indenture

                  The Issuer issued the Securities under an Indenture dated as
of August 8, 2000 (the "Indenture"), among the Company, the Issuer, the
Subsidiary Guarantors and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939

<PAGE>   26
                                                                               3

(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.

                  The Securities are general unsecured obligations of the
Issuer. The Issuer shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company to incur additional indebtedness; pay dividends or distributions on,
or redeem or repurchase capital stock; make investments; issue or sell capital
stock of subsidiaries; engage in transactions with affiliates; transfer or sell
assets; guarantee indebtedness; restrict dividends or other payments of
subsidiaries; and consolidate, merge or transfer all or substantially all of its
assets and the assets of its subsidiaries. The Indenture also contains covenants
that limit the Issuer's ability to engage in business activities and its ability
to use the proceeds from the issuance of Securities. These covenants are subject
to important exceptions and qualifications.

5. Optional Redemption

                  Except as set forth below, the Issuer shall not be entitled to
redeem the Securities at its option prior to August 15, 2005.

<PAGE>   27
                                                                               4

                  On and after August 15, 2005, the Issuer shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on August 15 of the
years set forth below:

<TABLE>
<CAPTION>
                                                    Redemption
                  Period                               Price
                  ------                            ----------
<S>               <C>                                <C>
                  2005                               106.125%
                  2006                               104.083
                  2007                               102.042
                  2008 and thereafter                100.000%
</TABLE>

                  In addition, prior to August 15, 2003, the Issuer shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 112.25%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds contributed
to the Issuer from one or more Public Equity Offerings; provided, however, that
(1) at least 65% of such aggregate principal amount of Securities (which
includes Additional Securities, if any) remains outstanding immediately after
the occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Issuer or its Affiliates); and (2) each such redemption
occurs within 60 days after the closing date of the related Public Equity
Offering.

<PAGE>   28
                                                                               5

6. Notice of Redemption

                  Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
1,000 principal amount may be redeemed in part but only in whole multiples of
1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.

7. Put Provisions

                  Upon a Change of Control, any Holder of Securities will have
the right to cause the Issuer to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.

8. Subordination

                  The Securities are subordinated to Senior Indebtedness of the
Issuer, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Issuer must be paid before the Securities may be
paid. The Issuer agrees, and each Securityholder by accepting a Security agrees,
to the subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.

9. Guaranties

                  The payment by the Issuer of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior subordinated basis by each of the Company and the Subsidiary
Guarantors.

<PAGE>   29
                                                                               6

10. Denominations; Transfer; Exchange

                  The Securities are in registered form without coupons in
denominations of 1,000 principal amount and whole multiples of 1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

11. Persons Deemed Owners

                  The registered Holder of this Security may be treated as the
owner of it for all purposes.

12. Unclaimed Money

                  If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Issuer at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Issuer and not to the Trustee for payment.

13. Discharge and Defeasance

                  Subject to certain conditions, the Issuer at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Issuer deposits with the Trustee money, European Government
Obligations or U.S. Government Obligations for the payment of principal and
interest on the Securities to redemption or maturity, as the case may be.

<PAGE>   30
                                                                               7

14. Amendment, Waiver

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Issuer, the
Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture
or the Securities to cure any ambiguity, omission, defect or inconsistency, or
to comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities including Subsidiary Guaranties, or to
secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, the Issuer, the Subsidiary Guarantors, or to
comply with any request of the SEC in connection with qualifying the Indenture
under the Act, or to make certain changes in the subordination provisions or to
make any change that does not adversely affect the rights of any Securityholder.

<PAGE>   31
                                                                               8

15. Defaults and Remedies

                  Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Issuer to
purchase Securities when required; (iii) failure by the Company or the Issuer,
as applicable, to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company, Significant Subsidiaries,
Subsidiary Guarantors, or the Issuer, as applicable, if the amount accelerated
(or so unpaid) exceeds $10.0 million; (v) certain events of bankruptcy or
insolvency with respect to the Company, the Issuer, the Subsidiary Guarantors or
the Significant subsidiaries; and (vi) certain judgments or decrees for the
payment of money in excess of $10.0 million and (vii) certain defaults with
respect to the Company Guaranty or Subsidiary Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.

                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.

<PAGE>   32
                                                                               9

16. Trustee Dealings with the Issuer

                  Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Issuer or its Affiliates and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were
not Trustee.

17. No Recourse Against Others

                  A director, officer, employee or stockholder, as such, of the
Issuer, the Company, any Subsidiary Guarantor or the Trustee shall not have any
liability for any obligations of the Issuer, the Company or any Subsidiary
Guarantor under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

18. Authentication

                  This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

19. Abbreviations

                  Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

<PAGE>   33
                                                                              10

20. CUSIP, ISIN and Common Code Numbers

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Issuer has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. To the
extent such numbers have been issued, the Issuer has caused ISIN and Common Code
numbers to be similarly printed on the Securities and has similarly instructed
the Trustee. No representation is made as to the accuracy of such numbers either
as printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.

21. Holders' Compliance with Registration Rights Agreement.

                  Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Issuer to the extent provided therein.

22. Governing Law.

                  THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                  THE ISSUER WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITY HOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:

<PAGE>   34
                                                                              11

                  FLOWSERVE FINANCE B.V.
                  PARALLELWEG 6
                  ETTEN-LEUR 4870AA
                  THE NETHERLANDS

                  ATTENTION:  MANAGING DIRECTOR

                  WITH A COPY TO:

                  FLOWSERVE CORPORATION
                  222 WEST LAS COLINAS BLVD.
                  SUITE 1500
                  IRVING, TX 75039

                  ATTENTION:  RENEE HORNBAKER

<PAGE>   35
                                                                               2

--------------------------------------------------------------------------------

                                           ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

         (Print or type assignee's name, address and zip code)

         (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                     agent to transfer this Security on
the books of the Issuer. The agent may substitute another to act for him.

--------------------------------------------------------------------------------

Date:                       Your Signature:
     -----------------------                ------------------------------------

--------------------------------------------------------------------------------

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

<PAGE>   36
                                                                               3

CHECK ONE BOX BELOW

         (1)               to the Issuer; or

         (2)               pursuant to an effective registration statement
                           under the Securities Act of 1933; or

         (3)               inside the United States to a "qualified
                           institutional buyer" (as defined in Rule 144A under
                           the Securities Act of 1933) that purchases for its
                           own account or for the account of a qualified
                           institutional buyer to whom notice is given that such
                           transfer is being made in reliance on Rule 144A, in
                           each case pursuant to and in compliance with Rule
                           144A under the Securities Act of 1933; or

         (4)               outside the United States in an offshore transaction
                           within the meaning of Regulation S under the
                           Securities Act of 1933 in compliance with Rule 904
                           under the Securities Act of 1933; or

         (5)               pursuant to the exemption from registration provided
                           by Rule 144 under the Securities Act of 1933.

<PAGE>   37
                                                                               4

         Unless one of the boxes is checked, the Trustee will refuse to register
         any of the Securities evidenced by this certificate in the name of any
         person other than the registered holder thereof; provided, however,
         that if box (4) or (5) is checked, the Trustee shall be entitled to
         require, prior to registering any such transfer of the Securities, such
         legal opinions, certifications and other information as the Issuer has
         reasonably requested to confirm that such transfer is being made
         pursuant to an exemption from, or in a transaction not subject to, the
         registration requirements of the Securities Act of 1933, such as the
         exemption provided by Rule 144 under such Act.

                                                     ------------------------
                                                            Signature

Signature Guarantee:

----------------------------                -------------------------
Signature must be guaranteed                Signature

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

<PAGE>   38
                                                                               1

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

                  The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuer as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Dated:
      ----------------------

      --------------------------------
                                         NOTICE: To be executed by
                                                 an executive officer

              TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

                  The undersigned represents and warrants that it is purchasing
this Security outside the United States as a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act and is aware that the sale to
it is being made in reliance on Regulation S and acknowledges that a holder of
an interest in a temporary Regulation S global security may not (i) receive the
payment of any distributions, redemption price or any other payments with
respect to the holder's beneficial interest in the temporary global security or
(ii) receive an interest in a permanent Regulation S global security until (A)
expiration of the 40th day after the later of the commencement of the offering
of the Securities and the closing date and (B) certification that the beneficial
owner of the interest in the Security is a non-U.S. person.

Dated:
      ----------------------

      --------------------------------
                                         NOTICE: To be executed by
                                                 an executive officer

<PAGE>   39
                                                                               1

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

                  The original principal amount of this Global Security is
_______________________ . The following increases or decreases in this Global
Security have been made:

<TABLE>
<S>       <C>                    <C>                  <C>                    <C>
Date of    Amount of decrease     Amount of increase   Principal amount of    Signature of
Exchange   in Principal  amount   in Principal amount  this Global Security   authorized officer
           of this Global         of this Global       following such         of Trustee or
           Security               Security             decrease or increase)  Securities Custodian
</TABLE>

<PAGE>   40
                                                                               1
                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this Security purchased by the
Issuer or the Company pursuant to Section 4.06, 4.09 or 4.10 of the Indenture,
check the box:
                                       [ ]

                  If you want to elect to have only part of this Security
purchased by the Issuer or the Company pursuant to Section 4.06, 4.09 or 4.10 of
the Indenture, state the amount in principal amount:  Euro
                                                           --------------

Date:                            Your Signature:
      ------------------------                   -------------------------------
                                                (Sign exactly as your name
                                                appears on the other side of
                                                this Security.)

Signature Guarantee:
                     ------------------------------------------------------
                                    (Signature must be guaranteed)

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.<PAGE>   1
                                                                     EXHIBIT 4.1

                                  DISCOVER BANK

                      Master Servicer, Servicer and Seller

                                       and

                         U.S. BANK NATIONAL ASSOCIATION

                                     Trustee

                       on behalf of the Certificateholders

                                SERIES SUPPLEMENT

                          Dated as of October 24, 2000

                                       to

                         POOLING AND SERVICING AGREEMENT

                           Dated as of October 1, 1993

                       $1,000,000,000 Class A Certificates

                        $52,632,000 Class B Certificates

                          DISCOVER CARD MASTER TRUST I

                           SERIES 2000-8 CERTIFICATES

<PAGE>   2

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

SERIES TERM SHEET.............................................................1
ANNEX.........................................................................1
SECTION 1.   Definitions......................................................1
SECTION 2.   Subordination...................................................24
SECTION 3.   Representations and Warranties of the Sellers...................24
SECTION 4.   Representations and Warranties of Discover Bank as
                Master Servicer and Servicer.................................25
SECTION 5.   Representations and Warranties of Other Servicers...............25
SECTION 6.   Representations and Warranties of the Trustee...................25
SECTION 7.   Authentication of Certificates..................................26
SECTION 8.   Establishment and Administration of Investor Accounts and
                the Credit Enhancement Account...............................26
SECTION 9.   Allocations of Collections......................................30
SECTION 10.  Payments........................................................41
SECTION 11.  Credit Enhancement..............................................44
SECTION 12.  Alternative Credit Support Election.............................46
SECTION 13.  Calculation of Investor Losses..................................47
SECTION 14.  Servicing Compensation..........................................47
SECTION 15.  Class Interest Rate Caps........................................47
SECTION 16.  Class Interest Rate Swaps.......................................49
SECTION 17.  Investor Certificateholders' Monthly Statement..................49
SECTION 18.  Master Servicer's Monthly Certificate...........................49
SECTION 19.  Notices.........................................................49
SECTION 20.  Additional Amortization Events..................................50
SECTION 21.  Early Accumulation Events; Additional Amortization Events.......50
SECTION 22.  Purchase of Investor Certificates and Series Termination........51
SECTION 23.  Variable Accumulation Period....................................52
SECTION 24.  Optional Accumulation Period Commencement.......................52
SECTION 25.  Series Yield Factor.............................................52
SECTION 26.  Ratification of Pooling and Servicing Agreement.................53
SECTION 27.  Counterparts....................................................53
SECTION 28.  Governing Law...................................................53
SECTION 29.  Intention of Parties............................................53

<PAGE>   3

                                    EXHIBITS

EXHIBIT A:   Form of Investors Certificates

EXHIBIT B:   Form of Certificateholders' Monthly Statement

EXHIBIT C:   Form of Master Servicer's Monthly Certificate

                                       2

<PAGE>   4
                          DISCOVER CARD MASTER TRUST I
                           SERIES 2000-8 CERTIFICATES

     This Series of Master Trust Certificates is established pursuant to Section
6.06 of that certain Pooling and Servicing Agreement, dated as of October 1,
1993, as amended, by and between DISCOVER BANK (formerly Greenwood Trust
Company), a Delaware banking corporation ("Discover Bank"), as Master Servicer,
Servicer and Seller and U.S. BANK NATIONAL ASSOCIATION (formerly First Bank
National Association, successor trustee to Bank of America Illinois, formerly
Continental 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 2000-8 CERTIFICATES.

                                SERIES TERM SHEET

Date of Series Term Sheet               October 24, 2000.

Group                                   One.

Series Initial Investor Interest        $1,052,632,000

Class Initial Investor Interest of
each Class of Investor Certificates     Class A - $1,000,000,000.
                                        Class B - $52,632,000.

Class A Expected Final Payment Date     The Distribution Date in October 2003.

Class B Expected Final Payment Date     The Distribution Date in October 2003.

Type of Structure                       Bullet Maturity.

Certificate Rates                       Class A - LIBOR plus 0.10% per annum,
                                        calculated on the basis of the actual
                                        number of days elapsed and a
                                        360-day year.

                                        Class B - LIBOR plus 0.34% per annum,
                                        calculated on the basis of the actual
                                        number of days elapsed and a 360-day
                                        year.

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.

                                       1

<PAGE>   5

Class Interest Rate Swap                Class A - Not applicable.

                                        Class B - Not applicable.

Interest Rate Swap Counterparty         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                     October 1, 2000.

Series Closing Date                     October 24, 2000.

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
                                        November 2000.

Interest Payment Dates                  The 15th day of each month (or, if such
                                        day is not a Business Day, the next
                                        succeeding Business Day), commencing in
                                        November 2000.

Statement Dates                         Each Distribution Date, commencing in
                                        November 2000.

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                     The greater of (a) $87,719,333.33 and
                                        (b) if the Master Servicer elects to
                                        delay commencement of the Accumulation
                                        Period in accordance with Section 23,
                                        (i) the aggregate of the Class A
                                        Initial Investor Interest plus the
                                        Class B Initial Investor Interest
                                        divided by (ii) the number of

                                       2

<PAGE>   6

                                        Distribution Dates from the
                                        commencement of the Accumulation
                                        Period through and including the
                                        Class A Expected Final Payment Date.

Principal Commencement Date             The first day of the Due Period related
                                        to the November 2002 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                      $78,947,400.

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 greater
                                        of (i) $10,526,320 and (ii) (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 greater of
                                        (i) $10,526,320 and (ii) an amount

                                       3

<PAGE>   7

                                        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) $52,631,600 prior
                                        to the occurrence of a Supplemental
                                        Credit Enhancement Event or (ii)
                                        $47,368,440 following the occurrence
                                        of a Supplemental Credit Enhancement
                                        Event 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) $5,263,160
                                        prior to the occurrence of an
                                        Alternative Credit Support Election
                                        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             $131,579,000.

                                       4

<PAGE>   8

Additional Subordinated Amount          $52,631,600 prior to the occurrence
                                        of a Supplemental Credit Enhancement
                                        Event and $47,368,440 following the
                                        occurrence of a Supplemental Credit
                                        Enhancement Event.

Supplemental Subordinated Amount        $5,263,160 prior to the effectiveness
                                        of an Alternative Credit Support
                                        Election and zero following the
                                        effectiveness of an Alternative
                                        Credit Support Election.

Series 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 April 2006.

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.

                                       5

<PAGE>   9
Class A Certificate                     Each certificate executed by the
                                        Sellers and authenticated by or on
                                        behalf of the Trustee, substantially in
                                        the form of Exhibit A-1.

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

Principal Paying Agent                  Class A - Not applicable.
                                        Class B - Not applicable.

Paying Agents                           Class A and Class B - the Corporate
                                        Trust Office of the Trustee.

                                       6

<PAGE>   10

     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
                                      Assistant Vice President and
                                        Assistant Treasurer

                                      U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                      /s/ Patricia M. Child
                                      -----------------------------------------
                                      Patricia M. Child
                                      Vice President

<PAGE>   11

                                      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 or a Class refer to the Series established hereby or a Class of the
Series 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.

<PAGE>   12

         "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; provided, however, that from and after the Fully Funded
Date, if any, the Available Class B Credit Enhancement Amount shall equal zero.

         "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.

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

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

                           (b) the amount of Series Excess Servicing;

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 (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.

                                       2

<PAGE>   13

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. 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 (ii) thereafter, the sum of the
Initial Subordinated Amount, the Supplemental Subordinated Amount and the
Additional Subordinated Amount.

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

         "Cedel" shall mean Clearstream Banking.

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

         "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

                                       3

<PAGE>   14

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 equalled zero.

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

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

                                       4

<PAGE>   15

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, 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.

                                       5

<PAGE>   16

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

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

                                       6

<PAGE>   17

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

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

         "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.

         "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

                                       7

<PAGE>   18

         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.

         "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, (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
(or in the case of the first Distribution Date, from and including the Series
Closing 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 immediately

                                       8

<PAGE>   19

preceding Interest Calculation Date (or in the case of the first Distribution
Date, from and including the Series Closing Date) 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 (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 (if each Interest Payment Date is also a
Distribution Date) or the Interest Calculation Date following the current
Distribution Date (if each Interest Payment Date is not also a Distribution
Date), 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 equalled 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 equalled 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.

         "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

                                       9

<PAGE>   20

Percentage for such Class and the amount of Series Yield Collections for such
day or the related Due Period, as applicable.

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

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

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

         "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

                                       10

<PAGE>   21

existing Deficit Liquidation Amount; provided, however, that the Controlled
Liquidation Amount shall not be less than zero and shall not exceed an amount
equal to the Series Invested Amount.

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

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

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

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

         "Credit Enhancement Drawing" shall mean any drawing made under the
Credit Enhancement.

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

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

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

                                       11

<PAGE>   22

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

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

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

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

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

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

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

                                       12

<PAGE>   23

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)(35)).

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

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

         "Group 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.

         "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.

                                       13

<PAGE>   24

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

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

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

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

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

         "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
and the Group Principal Collections 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

                                       14

<PAGE>   25

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).

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

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

                                       15

<PAGE>   26

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.

         "Net Swap Payment," if applicable, shall mean, with respect to any
Class that is subject to a Class Interest Rate Swap, on any Distribution Date,
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
Distribution Date and (ii) the amount owed by the Interest Rate Swap
Counterparty to the Trust under the Class Interest Rate Swap on such
Distribution Date.

         "Net Swap Receipt," if applicable, shall mean, with respect to any
Class that is subject to a Class Interest Rate Swap, on any Distribution Date,
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
Distribution Date and (ii) the amount owed by the Trust to the Interest Rate
Swap Counterparty under the Class Interest Rate Swap on such 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 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.

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

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

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

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

                                       16

<PAGE>   27

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

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

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

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

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

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

                                       17

<PAGE>   28

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

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

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

                  (a) during the Revolving  Period and the Accumulation
                      Period or the Controlled  Liquidation Period, as
                      applicable, the sum of

                      (x)(1) during the Revolving Period, an amount equal
                      to the sum of (i) the sum of the Class Finance Charge
                      Collections and the Class Yield Collections for each
                      Class for such day and (ii) the amount of Class B
                      Principal Collections for such day; minus the sum of
                      the Class B Yield Collections for such day and all
                      accrued but unfunded Class A Monthly Servicing Fees;
                      or

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

                                       18

<PAGE>   29

                      (y)  the positive difference, if any, between

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

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

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

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

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

                                       19

<PAGE>   30

         "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)(34), 9(b)(35) 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.

         "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 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, (A) if each

                                       20

<PAGE>   31

Interest Payment Date is also a Distribution Date, 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 (B) if each
Interest Payment Date is not also a Distribution Date, 360 divided by the actual
number of days from and including the immediately preceding Interest Calculation
Date (or, in the case of the first Distribution Date, from and including the
Series Closing Date) 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 (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 (if each Interest Payment Date is also a Distribution Date) or the Interest
Calculation Date following the current Distribution Date (if each Interest
Payment Date is not also a 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.

         "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 initially authenticated and delivered pursuant to
Section 7, as specified in the Series Term Sheet.

         "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,

                                       21

<PAGE>   32

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.

         "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.

                                       22

<PAGE>   33

         "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.

         "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.

         "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).

                                       23

<PAGE>   34

         "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 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.

         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 the execution, delivery and performance
of

                                       24

<PAGE>   35

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.

         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

                                       25
<PAGE>   36
Supplement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Series Supplement, and this Series
Supplement has been duly executed and delivered by the Trustee.

     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, two 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," and 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") 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 and the Group
Principal Collections Reallocation Account and in all proceeds thereof. Pursuant
to authority granted to it pursuant to Section 3.01(b) of the

                                       26
<PAGE>   37
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 and the Group Principal Collections
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 and in the Group Principal Collections 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 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

                                       27
<PAGE>   38
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 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

                                       28
<PAGE>   39
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 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 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 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.

                                       29
<PAGE>   40
     (f) Transfer of Investor Accounts. If at any time any of the Investor
Accounts established in Sections 8(a) through 8(e) 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 and the Series
Principal Collections 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, 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 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, (3) Class A Investment Income, if
                    applicable, and (4) 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."

                                       30
<PAGE>   41

          (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.

          (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,

                                       31
<PAGE>   42

               (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

                    (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.

                                       32
<PAGE>   43

          (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,

               (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.

                                       33
<PAGE>   44
          (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

               (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.

                                       34
<PAGE>   45
          (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 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

                                       35
<PAGE>   46
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

               (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) The Net Swap Payment, up to the remaining amount of Series Excess
Servicing, shall be withdrawn from the Series Collections Account and paid to
the Interest Rate Swap Counterparty in accordance with the provisions of the
Class Interest Rate Swap.

          (24) An amount equal to the amount of Series Excess Servicing 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

                                       36
<PAGE>   47

                         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

                    (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).

                                       37
<PAGE>   48
          (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):

          (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

                                       38
<PAGE>   49
               (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 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) 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.

          (29) 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.

                                       39
<PAGE>   50

          (30) 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.

          (31) 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."

          (32) 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

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

          (33) 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.

          (34) 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 (34):

          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

                                       40
<PAGE>   51

                         applicable (after giving effect to provisions in the
                         applicable Series Supplements substantially similar to
                         the clauses preceding this clause (34)) 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.

          (35) 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.

          (36) 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:

                                       41
<PAGE>   52
          (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

               (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 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

                                       42
<PAGE>   53
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 (5) 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.

          (6)  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 (6) 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.

          (7)  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

                                       43
<PAGE>   54
respect to any Class of Investor Certificates pursuant to this clause (7) 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 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

                                       44
<PAGE>   55
     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 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 (or from Series Excess Servicing) 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

                                       45
<PAGE>   56
occurrence, and shall notify Moody's in advance of its implementation of the
form and provider of the Supplemental Credit Enhancement Amount, if any.

     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

                                       46
<PAGE>   57
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 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 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

                                       47
<PAGE>   58
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 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

                                       48
<PAGE>   59
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, on each
Distribution Date, 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 Distribution 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 Distribution 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
Distribution Date, the Trustee shall notify the Master Servicer of such fact
prior to 1:00 p.m. Chicago time on such Distribution Date.

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

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

                                       49
<PAGE>   60
     SECTION 20. Additional Amortization Events. If any one of the following
events shall occur:

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

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

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

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

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

                                       50
<PAGE>   61

     (a) on any Distribution Date, the three month rolling average Series Excess
Spread is less than the Series Buffer Amount and the three month rolling average
Group Excess Spread is less than the Group Buffer Amount;

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

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

     SECTION 22. Purchase of Investor Certificates and Series Termination.

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

                                       51
<PAGE>   62
the Holder of the Seller Certificate may, but shall not be obligated to,
purchase the Investor Certificates of the Series established hereby by
depositing into the Series Principal Funding Account, on such Distribution Date,
an amount equal to such Series Investor Interest. After giving effect to such
deposit, such Series Investor Interest shall be reduced to zero, and the Seller
Interest shall be increased by the amount of such deposit.

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

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

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

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

                                       52
<PAGE>   63
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 in connection herewith to be a sale of
financial assets in connection with a securitization, an absolute transfer for
all purposes (other than for federal, state and local income and franchise tax
purposes) and to be treated as a sale for accounting purposes.

                                       53
<PAGE>   64

                                   EXHIBIT A-1

                           FORM OF CLASS A CERTIFICATE

                 [FORM OF THE FACE OF THE CLASS A CERTIFICATES]

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

NO.
                                                                  $

                                                        CUSIP NO. ______________

                  DISCOVER CARD MASTER TRUST I, SERIES 2000 - 8
           FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATE

                                  DISCOVER BANK
                      MASTER SERVICER, SERVICER AND SELLER

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

     This certifies that Cede & Co. (the "Class A Certificateholder") is the
registered owner of a Fractional Undivided Interest in the Discover Card Master
Trust I (the "Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") existing as of the Cut-Off Date (or, with
respect to Receivables in Additional Accounts, as of the applicable Additional
Account Cut-Off Date) or thereafter created under certain open end credit card
accounts for specified Persons (the "Accounts") originated by Discover Bank
(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 9-306 of the Uniform
Commercial Code as in effect in the Applicable State) of such Receivables
pursuant to a Pooling and Servicing Agreement, dated as of October 1, 1993, 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

                                     A-1-1
<PAGE>   65
Bank as Master Servicer, Servicer and Seller, as amended (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 October 24, 2000 (the "Series Supplement"), by and
between the Trustee and Discover Bank or any amendment thereto, or become vested
or obligatory for any purpose until the certificate of authentication hereon
shall have been signed by or on behalf of the Trustee under the Pooling and
Servicing Agreement.

                                     A-1-2
<PAGE>   66
     IN WITNESS WHEREOF, Discover Bank has caused this Class A Certificate to be
duly executed and authenticated.

                                           DISCOVER BANK

                                           By:
                                              ---------------------------

                                     A-1-3
<PAGE>   67

                [FORM OF THE REVERSE OF THE CLASS A CERTIFICATES]

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

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

     This Class A Certificate is one of a series of Certificates entitled
"Discover Card Master Trust I, Series 2000 - 8 Floating Rate Class A Credit Card
Pass-Through Certificates" (the "Class A Certificates"), each of which
represents a Fractional Undivided Interest in the Trust including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement and the Series Supplement to be
deposited in the Investor Accounts with respect to Discover Card Master Trust I,
Series 2000 - 8 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 2000 - 8
Floating Rate Class B Credit Card Pass-Through Certificates" (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.

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

                                     A-1-4
<PAGE>   68
     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 November 2000, 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 October 2003 (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 April 2006 (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, 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

                                     A-1-5
<PAGE>   69
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. Any such
amendment and any such consent by the Class A Certificateholder 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 transfer of this Class A Certificate shall be registered in the
Certificate Register upon surrender of this Investor Certificate for
registration of transfer at any office or agency maintained by the Transfer
Agent and Registrar accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Class A Certificateholder or such Class A Certificateholder's attorney
duly authorized in writing, and thereupon one or more new Class A Certificates
of authorized denominations and for the same aggregate Fractional Undivided
Interest will be issued to the designated transferee or transferees.

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

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

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

                                     A-1-6
<PAGE>   70

                [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

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

                                           U.S. BANK NATIONAL ASSOCIATION, as
                                           Trustee

                                           By:
                                              ----------------------------------
                                                     Authorized Officer

                                     A-1-7
<PAGE>   71

                                   EXHIBIT A-2

                           FORM OF CLASS B CERTIFICATE

                 [FORM OF THE FACE OF THE CLASS B CERTIFICATES]

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

NO.                                                             $

                                                      CUSIP NO. ________________

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

                  DISCOVER CARD MASTER TRUST I, SERIES 2000 - 8
           FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATE

                                  DISCOVER BANK
                      MASTER SERVICER, SERVICER AND SELLER

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

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

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

                                      A-2-1
<PAGE>   72
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 9-306 of the Uniform Commercial Code as in effect in the
Applicable State) of such Receivables pursuant to a Pooling and Servicing
Agreement, dated as of October 1, 1993, 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, as
amended (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 October 24, 2000 (the "Series Supplement"), by and
between the Trustee and Discover Bank or any amendment thereto, or become vested
or obligatory for any purpose until the certificate of authentication hereon
shall have been signed by or on behalf of the Trustee under the Pooling and
Servicing Agreement.

                                      A-2-2
<PAGE>   73
     IN WITNESS WHEREOF, Discover Bank has caused this Class B Certificate to be
duly executed and authenticated.

                                       DISCOVER BANK

                                       By:
                                          ----------------------------

                                     A-2-3
<PAGE>   74
                [FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]

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

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

     This Class B Certificate is one of a series of Certificates entitled
"Discover Card Master Trust I, Series 2000 - 8 Floating Rate Class B Credit Card
Pass-Through Certificates" (the "Class B Certificates"), each of which
represents a Fractional Undivided Interest in the Trust including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement and the Series Supplement to be
deposited in the Investor Accounts with respect to Discover Card Master Trust I,
Series 2000 - 8 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 2000 - 8
Floating Rate Class A Credit Card Pass-Through Certificates" (the "Class A
Certificates"). The Class A Certificates and the Class B Certificates are
collectively referred to herein as the Investor Certificates.

     The aggregate interest represented by the Class B Certificates at any time
in the assets of the Trust shall not exceed an amount equal to the Class
Investor Interest of the Class B Certificates at such time, plus accrued but
unpaid Certificate Interest for the Class B Certificates and any interest
thereon. The Class B Certificateholders are also entitled to the benefit of the
Credit Enhancement, to the extent provided in the Series Supplement. The Class
Initial Investor Interest of the Class B Certificates is $52,632,000. 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

                                     A-2-4
<PAGE>   75
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 November 2000, or if such 15th
day is not a Business Day, on the next succeeding Business Day, and on the Class
B Expected Final Payment Date (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 October
2003 (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 April 2006 (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, 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

                                     A-2-5
<PAGE>   76
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. Any such amendment and any such consent by the Class B
Certificateholder 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 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 Transfer
Agent, nor any agent of any of them or any such agent shall be

                                     A-2-6
<PAGE>   77
affected by notice to the contrary except in certain circumstances described in
the Pooling and Servicing Agreement.

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

                                     A-2-7
<PAGE>   78

                [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

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

                                   U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                   By:
                                      ------------------------------------
                                               Authorized Officer

                                     A-2-8
<PAGE>   79
                                   EXHIBIT B

             Form of Investor Certificateholders' Monthly Statement

                          Discover Card Master Trust I

                       Series 2000 - 8 Monthly Statement

Distribution Date:  __________ __, ____        Month Ending: __________ __, ____

Pursuant to the Series Supplement dated as of October 24, 2000 relating to the
Pooling and Servicing Agreement dated as of October 1, 1993 by and between
Discover Bank and U.S. Bank National Association as Trustee, as amended, 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.

<TABLE>
<S>                                         <C>                   <C>                       <C>
1.   Payments for the benefit of investors in Series 2000 - 8 on this Distribution Date (per $1,000 of
     Class Initial Investor Interest)

                                                Total                Interest                  Principal

     Series 2000 - 8
      Class A (__days at ___%)              $____________         $____________             $____________

      Class B (__ days at ___%)             $____________         $____________             $____________

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

     (a)   Aggregate Investor Interest                                                      $____________

           Seller Interest                                                                  $____________

           TOTAL MASTER TRUST                                                               $____________

     (b)   Group One Investor Interest                                                      $____________

     (c)   Series 2000 - 8 Series Investor Interest                                         $____________

     (d)   Class A Investor Interest                                                        $____________

           Class B Investor Interest                                                        $____________

3.   Allocation of Receivables collected during [Month][Year]

                                                Finance Charge        Principal      Yield Collections/
                                                  Collections        Collections     Additional Funds

     (a)   Allocation of Collections between
           Investors and Seller

           Aggregate Investor Allocation         $____________       $___________           N/A

           Seller Allocation                     $____________       $___________           N/A

     (b)   Group One Allocation                  $____________       $___________           N/A

     (c)   Series 2000 - 8 Allocations           $____________       $___________           N/A

     (d)   Class A Allocations                   $____________       $___________           N/A

           Class B Allocations                   $____________       $___________           N/A

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

     (f)   Finance Charge Collections as an annualized percentage of Master Trust
           Receivables at the beginning of [Month][Year]                                    ____________%

</TABLE>

                                      B-1
<PAGE>   80
<TABLE>
<S>                                 <C>                   <C>                        <C>             <C>
     (g)   Total Collections as a monthly percentage of Master Trust Receivables
           at the beginning of [Month][Year]                                                         ____________%

4.   Information concerning the Series Principal Funding Accounts ("SPFA")

                           Deposits into the SPFAs on       Deficit Amount on
                             this Distribution Date       this Distribution Date     SPFA Balance    Investment Income

     Series 2000 - 8                $________             $______                    $________       $_________

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 2000 - 8                   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 2000 - 8                                 N/A                                 N/A

7.   Investor Charged-Off Amount

                                                 This Distribution Date           Cumulative Investor
                                                                                  Charged-Off Amount

     (a)      Group One                          $_________                 $_________

     (b)      Series 2000 - 8                          $_________                 $_________

     (c)      Class A                                  $_________                 $_________

              Class B                                  $_________                 $_________

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

8.   Investor Losses on this Distribution Date

                                                       Total                      per $1,000 of original
                                                                                  invested Principal

     (a)      Group One                                $_________                 $_________

     (b)      Series 2000 - 8                          $_________                 $_________

     (c)      Class A                                  $_________                 $_________

              Class B                                  $_________                 $_________

</TABLE>

                                      B-2
<PAGE>   81
<TABLE>
<S>                                               <C>                         <C>
9.   Reimbursement of Investor Losses on this Distribution Date

                                                   Total                      per $1,000 of original
                                                                              invested Principal

     (a)      Group  One                           $_________                 $_________

     (b)      Series 2000 - 8                      $_________                 $_________

     (c)      Class A                              $_________                 $_________

              Class B                              $_________                 $_________

10.  Aggregate amount of Unreimbursed Investor Losses

                                                   Total                      per $1,000 of original
                                                                              invested Principal

     (a)      Group One                            $_________                 $_________

     (b)      Series 2000 - 8                      $_________                 $_________

     (c)      Class A                              $_________                 $_________

              Class B                              $_________                 $_________

11.  Investor Monthly Servicing Fee payable on this Distribution Date

     (a)      Group One                            $_________

     (b)      Series 2000 - 8                      $_________

     (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 2000 - 8, Class B                      $____________              ________ %

13.  Total Available Credit Enhancement Amounts

                                                   Shared Amount              Class B Amount

     (a)      Maximum Amount                            N/A                   $__________

     (b)      Available Amount                          N/A                   $__________

     (c)      Amount of drawings on Credit
              Enhancement on this Distribution Date     N/A                   $__________

     (d)      Credit Enhancement Fee on this
              Distribution Date                         N/A                   $__________

14.  Delinquency Summary

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

                                                   Delinquent Amount          Percentage of ending
     Payment Status                                ending balance             Receivables outstanding
</TABLE>

                                      B-3
<PAGE>   82
<TABLE>
<S>                                              <C>                               <C>
     30 - 59 days                                $__________________               __________%

     60 - 179 days                               $__________________               __________%

15.  Excess Spread Percentages on this Distribution Date(1)

     (a)      Group One(2)                       __________%

     (b)      Series 2000 - 8(3)                 __________%

16.  Net Charge-Offs on this Distribution Date

     Charges-offs net of recoveries as an annualized percentage of Principal
     Receivables at the beginning of [Month][Year](4)                              __________%
</TABLE>

                                      U.S. BANK NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:
                                         ---------------------------------------

----------------------------

(1)   For series in Group One, investors should refer only to the higher of the
      Group Excess Spread Percentage (Item 15(a)) and the Series Excess Spread
      Percentage (Item 15(b)) in assessing the current performance of the Trust
      and the Receivables.

(2)   Group Excess Spread is the sum of the Series Excess Spreads (as described
      below) for each series in the Group. The Group Excess Spread Percentage is
      equal to the Group Excess Spread, multiplied by twelve, divided by the
      Series Investor Interests for each series in the Group.

(3)   Series Excess Spread is the difference between (a) the sum of Finance
      Charge Collections, Yield Collections, Additional Funds and Investment
      Income for any Class of this Series (see Item 3(d)), and (b) the sum of
      (i) the monthly interest for each Class of this Series (see Item 1), (ii)
      the monthly servicing fee for each Class of this Series (see Item 11(c)),
      (iii) the Investor Charged-Off Amount (see Item 8(c)), and (iv) the Credit
      Enhancement Fee (see Item 13(d)), in each case for this Distribution Date.
      The Series Excess Spread Percentage is equal to the Series Excess Spread,
      multiplied by twelve, divided by the Series Investor Interest for this
      Series.

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

                                      B-4
<PAGE>   83
                                    EXHIBIT C

                  Form of Master Servicer's Monthly Certificate

                  Discover Card Master Trust I, Series 2000 - 8

                                   CREDIT CARD

                            PASS-THROUGH CERTIFICATES

                              --------------------

The undersigned, a duly authorized representative of Discover Bank, formerly
Greenwood Trust Company ("Discover Bank"), as Master Servicer pursuant to the
Pooling and Servicing Agreement dated as of October 1, 1993, as amended (the
"Pooling and Servicing Agreement"), and the Series Supplement, dated as of
October 24, 2000 (the "Series Supplement") by and between Discover Bank and U.S.
Bank National Association (formerly First Bank National Association, successor
trustee to Bank of America Illinois, formerly Continental Bank, National
Association) as Trustee, does hereby certify as follows with respect to the
Series Supplement for the Discover Card Master Trust I, Series 2000 - 8
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....................   $
                                                                        --------

6a.  The aggregate amount of Class A Principal Collections
     recharacterized as Series Yield Collections during [month]
     [year] is equal to.............................................   $
                                                                        --------

6b.  The aggregate amount of Class A Additional Funds for this
     Distribution Date is equal to..................................   $
                                                                        --------

                                      C-1
<PAGE>   84
7.    The sum of all amounts payable to the Class A Certificate-
      holders on the current Distribution Date is equal to...........  $
                                                                        --------

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

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

10a.  The aggregate amount of Class B Principal Collections
      recharacterized as Series Yield Collections during [month]
      [year] is......................................................  $
                                                                        --------

10b.  The aggregate amount of Class B Additional Funds for this
      Distribution Date is equal to..................................  $
                                                                        --------

11.   The amount of drawings under the Credit  Enhancement required
      to be made 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........................................................  $
                                                                        --------

12.   The sum of all amounts payable to the Class B Certificate-
      holders on the current Distribution Date is equal to...........  $
                                                                        --------

13.   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 Section 19 of the
      Series Supplement.

                                      C-2
<PAGE>   85
     IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
certificate this ____ day of ____________, ____.

                                              DISCOVER BANK,
                                                as Master Servicer

                                              By:
                                                 ----------------------------
                                                 Title:

                                      C-3

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