Second-Degree Card

In Paper Mario, after Mario defeats Chan and gets the First-Degree Card, he can fight Lee in the Toad Town Dojo.

After defeating Lee, Mario receives the Second-Degree Card.

This item proves his bravery and allows Mario to fight The Master.

There is a un-named yellow Dryite who has a Second-Degree Card as well. It implies that the Dryite fought Lee to gain the Second-Degree Card while visiting Toad Town.