DISCOVER CARD EXECUTION NOTE TRUST Issuer and Indenture Trustee CLASS B(2007-1) TERMS DOCUMENT Dated as of July 26, 2007 to INDENTURE SUPPLEMENT Dated as of July 26, 2007 for the DiscoverSeries Notes to INDENTURE Dated as of July 26, 2007
Exhibit 4.8
Execution Copy
DISCOVER CARD EXECUTION NOTE TRUST
Issuer
and
U.S. BANK NATIONAL ASSOCIATION
Indenture Trustee
CLASS B(2007-1) TERMS DOCUMENT
Dated as of July 26, 2007
to
Dated as of July 26, 2007
for the DiscoverSeries Notes
to
INDENTURE
Dated as of July 26, 2007
TABLE OF CONTENTS
| Page | ||||||
| ARTICLE I |
||||||
| Definitions and Other Provisions of General Application |
||||||
Section 1.01.
|
Definitions | 1 | ||||
Section 1.02.
|
Representations and Warranties of Issuer | 7 | ||||
Section 1.03.
|
Representations and Warranties of Indenture Trustee | 7 | ||||
Section 1.04.
|
Limitations on Liability | 8 | ||||
Section 1.05.
|
Governing Law | 8 | ||||
Section 1.06.
|
Counterparts | 8 | ||||
Section 1.07.
|
Ratification of Indenture and Indenture Supplement | 8 | ||||
| ARTICLE II |
||||||
| The Class B(2007-1) Notes |
||||||
Section 2.01.
|
Creation and Designation | 8 | ||||
Section 2.02.
|
Adjustments to Required Subordinated Percentages and Amount | 9 | ||||
Section 2.03.
|
Interest Payment | 9 | ||||
Section 2.04.
|
Notification of LIBOR | 10 | ||||
Section 2.05.
|
Payments of Interest and Principal | 10 | ||||
Section 2.06.
|
Form of Delivery of Class B(2007-1) Notes; Depository; Denominations | 10 | ||||
Section 2.07.
|
Delivery and Payment for the Class B(2007-1) Notes | 10 | ||||
Section 2.08.
|
Targeted Deposits to the Accumulation Reserve Account | 10 | ||||
Section 2.09.
|
Additional Issuances of Notes | 11 | ||||
Exhibit
Exhibit A Form of Class B Note
THIS CLASS B(2007-1) TERMS DOCUMENT (this “Terms Document”), by and between DISCOVER CARD
EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the
“Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States of America, as Indenture Trustee (the “Indenture
Trustee”), is made and entered into as of July 26, 2007.
Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class B Notes of the
DiscoverSeries and shall specify the principal terms thereof.
ARTICLE I
Definitions and Other Provisions of General Application
Section 1.01. Definitions. For all purposes of this Terms Document, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;
(2) all other terms used herein which are defined in the Indenture Supplement or the
Indenture, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles and, except as otherwise herein expressly
provided, the term “generally accepted accounting principles” with respect to any computation
required or permitted hereunder means such accounting principles as are generally accepted in the
United States of America at the date of such computation;
(4) all references in this Terms Document to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of this Terms
Document; The words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Terms Document as a whole and not to any particular Article, Section or other subdivision;
(5) in the event that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Indenture Supplement or the Indenture, the
terms and provisions of this Terms Document shall be controlling, but solely with respect to the
Class B(2007-1) Notes;
(6) each capitalized term defined herein shall relate only to the Class B(2007-1) Notes and
no other Tranche of Notes issued by the Issuer;
(7) “including” and words of similar import will be deemed to be followed by “without
limitation”; and
(8) for purposes of determining any amount or making any calculation hereunder, such amount
or calculation, (x) if specified to be as of the first day of any Due Period, shall (a)
include any
Notes issued during such Due Period as if such Notes had been outstanding on the first day of such
Due Period and (b) give effect to any payments, deposits or other allocations made on the
Distribution Date related to the prior Due Period, and (y) if specified to be as of the close of
business on the last day of any Due Period shall give effect to any payments, deposits or other
allocations made on the related Distribution Date.
“Accumulation Amount” means $16,666,666.67; provided, however, if the commencement of the
Accumulation Period is delayed in accordance with Section 4.02 of the Indenture Supplement, the
Accumulation Amount shall be determined in accordance with the definition of “Accumulation Amount”
in the Indenture Supplement.
“Accumulation Commencement Date” means August 15, 2013 (or, if such day is not a Business Day,
the next succeeding Business Day), or such later date as the Calculation Agent on behalf of the
Issuer determines in accordance with Section 4.02 of the Indenture Supplement.
“Accumulation Period” has the meaning set forth in the Indenture Supplement.
“Accumulation Period Length” means 12 months; provided, however, if the commencement of the
Accumulation Period is delayed in accordance with Section 4.02 of the Indenture Supplement, the
Accumulation Period Length shall be determined in accordance with the definition of “Accumulation
Period Length” in the Indenture Supplement.
“Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on behalf of
the Issuer notifies the Indenture Trustee that it expects the Accumulation Period Length to be
adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution
Date on which a condition in the right column of the following table was in effect on the
immediately preceding Distribution Date, if the Distribution Date is a Distribution Date described
in the corresponding left column of the following table, and ending on the Distribution Date
immediately preceding the earlier to occur of:
(x) the Expected Maturity Date for the Class B(2007-1) Notes and
(y) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class
B(2007-1) Notes is paid in full.
| Distribution Date: | Condition: | |
(a) The Distribution Date occurring
three (3) calendar months prior to
the first scheduled Distribution
Date of the Accumulation Period (as
adjusted in accordance with Section
4.02 of the Indenture Supplement)
and any following Distribution Date
|
No condition. | |
(b) The Distribution Date occurring
four (4) calendar months prior to
the first scheduled Distribution
Date of the Accumulation Period (as
adjusted in accordance with Section
4.02 of the Indenture Supplement)
and any following Distribution Date
|
The three-month rolling average Excess Spread Percentage is less than 4%. |
2
| Distribution Date: | Condition: | |
(c) The Distribution Date occurring
six (6) calendar months prior to the
first scheduled Distribution Date of
the Accumulation Period (as adjusted
in accordance with Section 4.02 of
the Indenture Supplement) and any
following Distribution Date
|
The three-month rolling average Excess Spread Percentage is less than 3%. | |
(D) The Distribution Date occurring
twelve (12) calendar months prior to
the first scheduled Distribution
Date of the Accumulation Period (as
adjusted in accordance with Section
4.02 of the Indenture Supplement)
and any following Distribution Date
|
The three-month rolling average Excess Spread Percentage is less than 2%. |
“Class B(2007-1) Adverse Event” means the occurrence of any of the following: (a) an Early
Redemption Event with respect to the Class B(2007-1) Notes or (b) an Event of Default and
acceleration of the Class B(2007-1) Notes; provided, however, that if the only such event to have
occurred is an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption
Cure has occurred, a Class B(2007-1) Adverse Event shall not be treated as continuing from and
after the date of such cure.
“Class B(2007-1) Note” means any Note, in the form set forth in Exhibit A hereto, designated
therein as a Class B(2007-1) Note and duly executed and authenticated in accordance with the
Indenture.
“Class B(2007-1) Noteholder” means a Person in whose name a Class B(2007-1) Note is registered
in the Note Register.
“Class B(2007-1) Termination Date” means the earliest to occur of (a) the Principal Payment
Date on which the Outstanding Dollar Principal Amount of the Class B(2007-1) Notes
is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is
discharged and satisfied pursuant to Article VI thereof.
“Encumbered Amount” means, for the Class B(2007-1) Notes, an amount equal to
(a) the Nominal Liquidation Amount of the Class B(2007-1) Notes, divided by
(b) the Nominal Liquidation Amount of all Tranches of Class B Notes in the DiscoverSeries,
multiplied by
(c) the aggregate Required Subordinated Amount of Class B Notes for all Tranches of Class A
Notes in the DiscoverSeries with a Required Subordinated Amount of Class B Notes greater than zero.
3
“Encumbered Required Subordinated Amount of Class C Notes” means, for the Class B(2007-1)
Notes, an amount equal to the product of
(a) the Encumbered Amount for the Class B(2007-1) Notes, and
(b) the Required Subordinated Percentage of Class C Notes (Encumbered) for the Class B(2007-1)
Notes.
“Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which
is the Excess Spread Amount for such Distribution Date multiplied by 12 and the denominator of
which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of
the first day of the related Due Period.
“Expected Maturity Date” means July 15, 2014.
“Indenture” means the Indenture dated as of July 26, 2007 between the Issuer and Indenture
Trustee, as the same may be amended, supplemented, restated, amended and restated, replaced or
otherwise modified from time to time.
“Indenture Supplement” means the Indenture Supplement dated as of July 26, 2007 for the
DiscoverSeries Notes, by and between the Issuer and the Indenture Trustee, as the same may be
amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to
time.
“Initial Dollar Principal Amount” means $200,000,000, or such higher amount as is specified in
any Notice of Additional Issuance under Section 2.09.
“Interest Accrual Period” means, with respect to any Interest Payment Date, the period from
and including the previous Interest Payment Date (or, in the case of the first Interest Payment
Date for any Class B(2007-1) Note, from and including the applicable Issuance Date) to but
excluding such Interest Payment Date.
“Interest Payment Date” means the fifteenth day of each month commencing in August 2007, or if
such fifteenth day is not a Business Day, the next succeeding Business Day.
“Issuance Date” means July 26, 2007 with respect to all Class B(2007-1) Notes issued on the
date hereof and, with respect to any additional Class B(2007-1) Notes issued pursuant to Section
2.09, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder.
“Legal Maturity Date” means January 17, 2017.
“LIBOR” means, 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
Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such day. If such rate does not appear on
Reuters Screen LIBOR01, the rate will be determined by the Indenture 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 Indenture Trustee, at approximately 11:00
4
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 Indenture 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. If LIBOR with respect to
a LIBOR Determination Date is not determined pursuant to the foregoing, LIBOR with respect to such
LIBOR Determination Date will be LIBOR with respect to the immediately prior LIBOR Determination
Date.
“LIBOR Determination Date” means the second LIBOR Business Day immediately preceding the
commencement of an Interest Accrual Period.
“LIBOR Business Day,” if applicable, shall mean a day other than a Saturday or a Sunday on
which banking institutions in both the City of London, England and in New York, New York are not
required or authorized by law to be closed.
“Note Interest Rate” means LIBOR + 0.24% per annum, calculated on the basis of the actual
number of days elapsed and a 360-day year.
“Notice of Additional Issuance” has the meaning set forth in Section 2.09.
“Required Daily Deposit Target Finance Charge Amount” means, for any day in a Due Period, an
amount equal to the Class B Tranche Interest Allocation for the related Distribution Date;
provided, however, that for purposes of determining the Required Daily Deposit Target Finance
Charge Amount on any day on which the Class B Tranche Interest Allocation cannot be
determined because the LIBOR Determination Date for the applicable Interest Accrual Period has
not yet occurred, the Required Daily Deposit Target Finance Charge Amount shall be the Class B
Tranche Interest Allocation determined based on a pro forma calculation made on the assumption that
LIBOR will be LIBOR for the applicable period determined on the first day of such calendar month,
multiplied by 1.25.
“Required Daily Deposit Target Principal Amount” means, for any day in a Due Period, (i) if
such Due Period is in the Accumulation Period for the Class B(2007-1) Notes, the Accumulation
Amount, (ii) if such day is on or after the occurrence and during the continuance of a Class
B(2007-1) Adverse Event, the Nominal Liquidation Amount of the Class B(2007-1) Notes, and (iii) in
all other circumstances, zero.
“Required Subordinated Amount of Class C Notes” means, for the Class B(2007-1) Notes for any
date of determination, an amount equal to the sum of
(a) the Unencumbered Required Subordinated Amount of Class C Notes for such Class
B(2007-1) Notes and
(b) the Encumbered Required Subordinated Amount of Class C Notes for such Class
B(2007-1) Notes;
5
provided, however, that for any date of determination on or after the occurrence and during the
continuation of a Class B(2007-1) Adverse Event, the Required Subordinated Amount of Class C Notes
for the Class B(2007-1) Notes will be the greater of
(x) the amount determined above for such date of determination and
(y) the amount determined above for the date immediately prior to the date on which
such Class B(2007-1) Adverse Event shall have occurred.
“Required Subordinated Amount of Class D Notes” means, for the Class B(2007-1) Notes for any
date of determination, zero, subject to adjustment in accordance with Section 2.02.
“Required Subordinated Percentage of Class C Notes (Encumbered)” means, for the Class
B(2007-1) Notes, 127.272727%, subject to adjustment in accordance with Section 2.02.
“Required Subordinated Percentage of Class C Notes (Unencumbered)” means, for the Class
B(2007-1) Notes, 7.526882%, subject to adjustment in accordance with Section 2.02.
“Reuters Screen LIBOR01” means the display page currently so designated on the Reuters Screen
(or such other page as may replace that page on that service for the purpose of displaying
comparable rates or prices).
“Specified Rating” means, for the Class B(2007-1) Notes, A with respect to Standard & Poors,
A2 with respect to Moody’s and A with respect to Fitch.
“Stated Principal Amount” means $200,000,000 or such higher amount as is specified in any
Notice of Additional Issuance under Section 2.09.
“Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution
Date during the Accumulation Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding
Dollar Principal Amount of the Class B(2007-1) Notes as of the close of business on the last day of
the related Due Period or (ii) any other amount designated by the Calculation Agent on behalf of
the Issuer; provided, however, that if such designation is of a lesser amount, the applicable Note
Rating Agencies shall have provided prior written confirmation that a Ratings Effect will not occur
with respect to such change.
“Unencumbered Amount” means, for the Class B(2007-1) Notes, an amount equal to the Nominal
Liquidation Amount of the Class B(2007-1) Notes minus the Encumbered Amount for the Class B(2007-1)
Notes.
“Unencumbered Required Subordinated Amount of Class C Notes” means, for the Class B(2007-1)
Notes, an amount equal to the product of
(a) the Unencumbered Amount for the Class B(2007-1) Notes and
(b) the Required Subordinated Percentage of Class C Notes (Unencumbered) for the Class
B(2007-1) Notes.
6
Section 1.02. Representations and Warranties of Issuer. The Issuer represents and warrants
that:
(a) the Issuer has been duly formed and is validly existing as a statutory trust in good
standing under the laws of the State of Delaware, and has full power and authority to execute and
deliver this Terms Document and to perform the terms and provisions hereof;
(b) the execution, delivery and performance of this Terms Document by the Issuer have been
duly authorized by all necessary corporate and statutory trust proceedings of any Beneficiary and
the Owner Trustee, do not require any approval or consent of any governmental agency or authority,
and do not and will not conflict with any material provision of the Certificate of Trust or the
Trust Agreement of the Issuer;
(c) this Terms Document is the valid, binding and enforceable obligations of the Issuer,
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;
(d) to the best of the Issuer’s knowledge, this Terms Document will not conflict with any law
or governmental regulation or court decree applicable to it;
(e) the Issuer is not required to be registered under the Investment Company Act;
(f) all information heretofore furnished by the Issuer in writing to the Indenture Trustee for
purposes of or in connection with this Terms Document or any transaction contemplated hereby is,
and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will
be, true and accurate in every material respect or based on reasonable estimates on the date as of
which such information is stated or certified; and
(g) to the best knowledge of the Issuer, there are no proceedings or investigations pending
against the Issuer before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over the Issuer (A) asserting the invalidity of
this Terms Document, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Terms Document or (C) seeking any determination or ruling which in the
Issuer’s judgment would materially and adversely affect the performance by the Issuer of its
obligations under this Terms Document or the validity or enforceability of this Terms Document.
Section 1.03. Representations and Warranties of Indenture Trustee. The Indenture Trustee
represents and warrants and any successor trustee shall represent and warrant that:
(a) The Indenture Trustee is organized, existing and in good standing under the laws of the
United States of America;
(b) The Indenture Trustee has full power, authority and right to execute, deliver and perform
this Indenture, and has taken all necessary action to authorize the execution, delivery and
performance by it of this Terms Document; and
7
(c) This Terms Document has been duly executed and delivered by the Indenture Trustee.
Section 1.04. Limitations on Liability.
(a) It is expressly understood and agreed by the parties hereto that (i) this Terms Document
is executed and delivered by the Owner Trustee not individually or personally but solely as Owner
Trustee under the Trust Agreement, in the exercise of the powers and authority conferred and vested
in it, (ii) each of the representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner
Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein
contained will be construed as creating any liability on the Owner Trustee individually or
personally, to perform any covenant of the Issuer either expressed or
implied herein, all such liability, if any, being expressly waived by the parties to this
Terms Document and by any Person claiming by, through or under them and (iv) under no circumstances
will the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the
Issuer or be liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuer under this Terms Document or any related documents.
(b) None of the Indenture Trustee, the Owner Trustee, the Calculation Agent, any Beneficiary,
the Depositor, any Master Servicer or any Servicer or any of their respective officers, directors,
employees, incorporators or agents will have any liability with respect to this Terms Document, and
recourse may be had solely to the Collateral pledged to secure these Class B(2007-1) Notes under
the Indenture, the Indenture Supplement and this Terms Document.
Section 1.05. Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION
LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF
THE LAWS OF ANY OTHER STATE.
Section 1.06. Counterparts. This Terms Document may be executed in any number of
counterparts, each of which when so executed will be deemed to be an original, but all such
counterparts will together constitute but one and the same instrument.
Section 1.07. Ratification of Indenture and Indenture Supplement. As supplemented by this
Terms Document, each of the Indenture and the Indenture Supplement is in all respects ratified and
confirmed and the Indenture as supplemented by the Indenture Supplement and this Terms Document
shall be read, taken and construed as one and the same instrument.
ARTICLE II
The Class B(2007-1) Notes
Section 2.01. Creation and Designation. There is hereby created a Tranche of Class B Notes to
be issued pursuant to the Indenture and the Indenture Supplement to be known as the “DiscoverSeries
Class B(2007-1) Notes.”
8
Section 2.02. Adjustments to Required Subordinated Percentages and Amount
(a) On any date, the Issuer may change the Required Subordinated Percentage of Class C Notes
(Encumbered) or the Required Subordinated Percentage of Class C Notes (Unencumbered), in each case
for the Class B(2007-1) Notes, without the consent of any Noteholders; provided that the Issuer has
received written confirmation from each applicable Note Rating Agency that the change in such
percentage will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes.
On any date, the Issuer may change the Required Subordinated Amount of Class D Notes for the Class
B(2007-1) Notes (though not below zero) and may add such definitions and other terms and make such
additional amendments to this Terms Document as shall be necessary to determine such Required
Subordinated Amount of Class D Notes without the consent of any Noteholders; provided that the
Issuer has received written confirmation from each applicable Note Rating Agency that the change in
such percentage and such other amendments will not result in a Ratings Effect for any Tranche of
Outstanding DiscoverSeries Notes; provided, however, that at any time the Class D Notes are or will
be held by Discover Bank or any of its affiliates, the Required Subordinated Amount of Class D
Notes for these Class B(2007-1) Notes may not be increased above zero.
(b) On any date, the Issuer may, at the direction of the Beneficiary, replace all or a
portion of the Required Subordinated Amount of Class C Notes or the Required Subordinated Amount of
Class D Notes, in each case for the Class B(2007-1) Notes with a different form of credit
enhancement (including, without limitation, a cash collateral account, a letter of credit, a
reserve account, a surety bond, an insurance policy or a collateral interest, or any combination
thereof) and may add such definitions and other terms and make such additional amendments to this
Terms Document as shall be necessary for such replacement without the consent of any Noteholders,
provided that the Issuer has received written confirmation from each applicable Note Rating Agency
that such replacement and such other amendments will not result in a Ratings Effect for any Tranche
of Outstanding DiscoverSeries Notes.
Section 2.03. Interest Payment. For each Interest Payment Date, the amount of interest due
with respect to the Class B(2007-1) Notes shall be an amount equal to
| (i) | (A) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360, times | ||
| (B) the Note Interest Rate in effect with respect to such related Interest Accrual Period, times | |||
| (ii) | the Outstanding Dollar Principal Amount of the Class B(2007-1) Notes determined as of the first date of such related Interest Accrual Period, plus |
any Class B Tranche Interest Allocation Shortfall for such Class B(2007-1) Notes for the
immediately preceding Distribution Date, together with interest thereon at the Note Interest Rate
in effect with respect to such related Interest Accrual Period, calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
9
Section 2.04. Notification of LIBOR. On each LIBOR Determination Date, the Indenture Trustee
shall send to the Issuer, the Beneficiary, each applicable Master Servicer and any stock exchange
on which the Class B(2007-1) Notes are then listed, by facsimile transmission or electronic
transmission, notification of LIBOR for the following Interest Accrual Period.
Section 2.05. Payments of Interest and Principal.
(a) The Issuer will cause interest to be paid on each Interest Payment Date and principal to
be paid on the Expected Maturity Date; provided, however, that it shall not be an Event of Default
if principal is not paid in full on such Expected Maturity Date unless funds for such payment have
been allocated in accordance with Section 3.01 of the Indenture Supplement; and provided, further,
that if a Class B(2007-1) Adverse Event has occurred and is continuing, principal will instead be
payable in monthly installments on each Principal Payment Date for the Class B(2007-1) Notes in
accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and
principal on the Class B(2007-1) Notes shall be made as set forth in Section 1101 of the Indenture.
(b) The right of the Class B(2007-1) Noteholders to receive payments from the Issuer will
terminate on the Class B(2007-1) Termination Date.
(c) All payments of principal, interest or other amounts to the Class B(2007-1) Noteholders
will be made pro rata based on the Stated Principal Amount of their Class B(2007-1) Notes.
Section 2.06. Form of Delivery of Class B(2007-1) Notes; Depository; Denominations.
(a) The Class B(2007-1) Notes shall be delivered in the form of a Global Note which shall be a
Registered Note as provided in Section 204 of the Indenture. The form of the Class B(2007-1) Notes
is attached hereto as Exhibit A.
(b) The Depository for the Class B(2007-1) Notes shall be The Depository Trust Company, and
the Class B(2007-1) Notes shall initially be registered in the name of Cede & Co., its nominee.
(c) The Class B(2007-1) Notes will be issued in minimum denominations of $100,000 and integral
multiples of $1,000 in excess of that amount.
Section 2.07. Delivery and Payment for the Class B(2007-1) Notes. The Issuer shall execute
and deliver the Class B(2007-1) Notes to the Indenture Trustee for authentication, and the
Indenture Trustee shall deliver the Class B(2007-1) Notes when authenticated, each in accordance
with Sections 203 and 303 of the Indenture.
Section 2.08. Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to
be made to the Accumulation Reserve Subaccount for the Class B(2007-1) Notes for any Due Period
during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation
Reserve Subaccount Deposit minus any amount on deposit in the Accumulation Reserve Subaccount for
the Class B(2007-1) Notes.
10
Section 2.09. Additional Issuances of Notes. Subject to clauses (ii), (iii), (iv) and (v) of
Sections 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class
B(2007-1) Notes, so long as the following conditions precedent are satisfied:
(a) the Issuer shall have given the Indenture Trustee written notice of such issuance of
additional Class B(2007-1) Notes (the “Notice of Additional Issuance”) at least one (1) Business
Day in advance of the Issuance Date thereof, which notice shall include:
| (i) | the Issuance Date of such additional Class B(2007-1) Notes; | ||
| (ii) | the amount of such additional Class B(2007-1) Notes being offered and the resulting Initial Dollar Principal Amount and Stated Principal Amount of Class B(2007-1) Notes; | ||
| (iii) | the date from which interest on such additional Class B(2007-1) Notes will accrue (which may be a date prior to the date of issuance thereof); | ||
| (iv) | the first Interest Payment Date on which interest will be paid on such additional Class B(2007-1) Notes; and | ||
| (v) | any other terms that the Issuer set forth in such notice of issuance of additional Class B(2007-1) Notes to clarify the rights of Holders of such additional Class B(2007-1) Notes or the effect of such issuance of additional Class B(2007-1) Notes on any calculations to be made with respect to the Class B(2007-1) Notes, Class B, or the Issuer. |
All such terms shall be incorporated into and form a part of this Terms Document on and after the
effective date of such Class B(2007-1) Notes; and
(b) no Class B(2007-1) Adverse Event has occurred and is continuing.
The Issuer shall not have to satisfy the conditions set forth in Section 310 of the Indenture
in connection with an issuance of additional Class B(2007-1) Notes so long as such conditions were
satisfied or waived in connection with the initial issuance of Class B(2007-1) Notes.
[Remainder of page intentionally blank; signature page follows]
11
IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all as
of the day and year first above written.
| DISCOVER CARD EXECUTION NOTE TRUST, as Issuer |
||||||
| By: | Wilmington Trust Company, | |||||
| not in its individual capacity but solely | ||||||
| as Owner Trustee | ||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | ||||||
| Title: Sr. Financial Services Officer | ||||||
| U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee |
||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. Child | |||||
| Name: ▇▇▇▇▇▇▇▇ ▇. Child | ||||||
| Title: Vice President | ||||||
Signature Page to
Class B(2007-1) Terms Document