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Second Amendment to
Credit Agreement
This Second Amendment to Credit Agreement (this
"Amendment" ) is dated as of June 16, 2008 by and among
Alliance Data Systems Corporation (the "Borrower" ), the
Guarantors party hereto, the Banks party hereto, and Bank of
Montreal, as Administrative Agent and Letter of Credit Issuer.
w i t n e s s e t h:
Whereas, the Borrower, the Guarantors, the
Banks, and the Administrative Agent have heretofore executed and
delivered a Credit Agreement dated as of September 29, 2006
(as amended, the "Credit Agreement" ); and
Whereas, the Borrower, the Guarantors, the Banks
and the Administrative Agent desire to amend certain of the
covenants as set forth herein;
Now, Therefore, for good and valuable
consideration the receipt of which is hereby acknowledged, the
Borrower, the Guarantor, the Banks and the Administrative Agent
hereby agree as follows:
Article I
Amendments
1.1. Section 1.1 of the Credit Agreement is
hereby amended by (a) deleting the defined terms "Annual
Measurement Period", "Consolidated Net Worth", "Maximum
Annual Amount" and "Total Capitalization Ratio",
(b) amending in its entirety the defined term "Senior
Leverage Ratio" to read as set forth below, and (c) inserting
the new defined terms "Convertible Debt" and "Total
Leverage Ratio" in proper alphabetical order as follows:
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"Convertible Debt" means Debt
issued by the Borrower which by its terms may be converted into or
exchanged for equity securities of the Borrower at the option of
the Borrower or the holder of such Debt.
"Senior Leverage
Ratio" means, at any time, the ratio of (x) all
principal amounts owing by the Borrower and its Subsidiaries
pursuant to the terms of (i) this Agreement or any other
Credit Document and the Note Purchase Agreement and all extensions,
renewals, refinancings, refundings and replacements of any of the
foregoing, in whole or in part (in each case other than
Subordinated Debt and Convertible Debt), and (ii) any credit
agreement, note purchase agreement, indenture or other credit
facility relating to Debt (in each case other than Subordinated
Debt and Convertible Debt) permitted by Section 5.15(viii) to
(y) Consolidated Operating EBITDA of the Borrower and its
Subsidiaries for the twelve months then most recently
ended.
"Total Leverage Ratio" means, at any
time, the ratio of (x) Consolidated Debt of the Borrower and
its Subsidiaries to (y) Consolidated Operating EBITDA of the
Borrower and its Subsidiaries for the twelve months then most
recently ended.
1.2. The Definition of Debt appearing in
Section 1.1 of the Credit Agreement is hereby amended by
(a) amending clause (vii) in its entirety to read as:
"(vii) all Debt of others Guaranteed by such Person and" and
(b) amending the last sentence thereto in its entirety to read
as "Notwithstanding the foregoing, there shall be excluded from
Debt of any Person any obligations of such Person under a Qualified
Securitization Transaction that are or may be reflected as Debt on
a balance sheet of such Person, and any obligations of such Person
in respect of Qualifying Deposits."
1.3. Section 5.9(k) of the Credit Agreement is
hereby amended by deleting the phrase "20% of Consolidated Net
Worth of the Borrower" appearing therein and inserting in its
place the amount "$250,000,000" .
1.4. Section 5.11 of the Credit Agreement is
hereby amended in its entirety and as so amended shall read as
follows:
1.5. Section 5.17(a) of the Credit Agreement is
hereby amended in its entirety and as so amended shall read as
follows:
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(a) Other than payments made in accordance with
the terms of subsection (b) below, neither the Borrower nor
any of its Subsidiaries will declare or make any Restricted
Payments unless, immediately prior to and after giving effect
thereto, no Default or Event of Default exists.
1.6. Section 5.21(a)(ii) and (iii) of the Credit
Agreement are each hereby amended by deleting the phrase "5% of
the Borrower's Consolidated Net Worth (measured at the time each
such Investment is made)" appearing therein and inserting in
its place the amount "$75,000,000" .
1.7. Section 5.21(a)(iv) of the Credit
Agreement is hereby amended in its entirety and as so amended shall
read as follows:
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