AFFINION GROUP HOLDINGS, INC., ET AL. AMENDED AND RESTATED SUPPORT AGREEMENT March 4, 2019

Exhibit 10.3

THIS SUPPORT AGREEMENT IS NOT AN OFFER, OR A SOLICITATION FOR AN OFFER, WITH RESPECT TO ANY SECURITIES NOR IS IT A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WOULD COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS SUPPORT AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF THE RSA EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON THE PARTIES HERETO.

THIS SUPPORT AGREEMENT DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, REPRESENTATIONS, WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WOULD BE SUBJECT TO THE COMPLETION OF DEFINITIVE DOCUMENTATION INCORPORATING THE TERMS SET FORTH HEREIN (OR AS OTHERWISE AGREED BY THE PARTIES). THE CLOSING OF ANY TRANSACTION SHALL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTATION AND THE APPROVAL RIGHTS OF THE PARTIES SET FORTH HEREIN AND IN SUCH DEFINITIVE DOCUMENTATION.

AFFINION GROUP HOLDINGS, INC., ET AL.

AMENDED AND RESTATED SUPPORT AGREEMENT

March 4, 2019

This Amended and Restated Support Agreement (together with the exhibits and schedules attached hereto, which include, without limitation, the Term Sheet (as defined below), as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), dated as of March 4, 2019, is entered into by and among: (i) Affinion Group Holdings, Inc. (“Affinion Holdings”) and certain of its subsidiaries that are signatories hereto (each an “Affinion Party” and collectively, the “Affinion Parties”); (ii) the lenders (the “Lenders”) under that certain credit agreement, dated as of May 10, 2017 (as amended, restated, modified, supplemented or replaced from time to time, the “Credit Agreement”), by and among Affinion Group, Inc. (“Affinion”), as borrower, Affinion Holdings, as a guarantor, the lenders party thereto and HPS Investment Partners, LLC, as administrative agent and collateral agent (the “Administrative Agent”), that are signatories hereto (collectively, with any Lender that may become a party hereto in accordance with Sections 13 and 34 of this Agreement, the “Consenting Lenders”); and (iii) the holders (the “Noteholders”) of Affinion’s Senior Cash 12.5% / PIK Step-Up to 15.5% Notes due 2022 (the “Existing Notes”) issued pursuant to that certain indenture, dated as of May 10, 2017 (as amended, restated, modified, supplemented or replaced from time to time, the “Existing Notes Indenture”), by and among Affinion, as issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”),

that are signatories hereto (collectively, with any Noteholder that may become a party hereto in accordance with Sections 13 and 34 of this Agreement, the “Consenting Noteholders” and, together with the Consenting Lenders and the Second Lien Lenders (as defined below), the “Consenting Stakeholders”). This Agreement collectively refers to the Affinion Parties and the Consenting Stakeholders as the “Parties” and each individually as a “Party”. Unless otherwise noted, capitalized terms used but not defined herein have the meanings ascribed to them at a later point in this Agreement or in the Term Sheet (as defined herein).

RECITALS

WHEREAS, the Parties entered into that certain Support Agreement, effective as of March 1, 2019 (the “Original Support Agreement”);

WHEREAS, pursuant to Section 28 of the Original Support Agreement, the Original Support Agreement may be modified, amended, amended and restated, or supplemented with the express prior written consent of the Affinion Parties and the Required Consenting Stakeholders;

WHEREAS, the Affinion Parties and the undersigned Consenting Stakeholders constituting the Required Consenting Stakeholders desire to amend and restate the Original Support Agreement as set forth herein;

WHEREAS, as of the date of the Original Support Agreement, the Lenders hold claims against the Affinion Parties arising on account of the Credit Agreement (each, a “Lender Claim”) in an aggregate principal amount of approximately $942 million (together, the “Lender Claims”);

WHEREAS, the Noteholders hold claims against the Affinion Parties arising on account of the Existing Notes Indenture (each, a “Note Claim”) in an aggregate principal amount of approximately $682 million (together, the “Note Claims”);

WHEREAS, certain of the Consenting Lenders and the Consenting Noteholders also hold common stock (“Company Common Stock”), par value $0.001 per share, of Affinion Holdings or warrants to purchase Company Common Stock (the “Existing Warrants”) of the type and in the amount set forth on their respective signature pages hereto;

WHEREAS, the Affinion Parties are seeking to restructure the Lender Claims, the Note Claims, the Second Lien Claims (as defined below) and certain of their other obligations and to recapitalize in accordance with the terms provided in the restructuring term sheet attached hereto as Exhibit A (together with the exhibits and schedules attached thereto, as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof, the “Term Sheet”) and incorporated herein pursuant to Section 3 of this Agreement pursuant to an out-of-court exchange offer, recapitalization and private placement offering (the “Recapitalization”);

WHEREAS, if the Affinion Parties do not consummate a Recapitalization, as described in the Term Sheet and this Agreement or otherwise, then the Affinion Parties will seek to restructure the Lender Claims, the Note Claims, the Company Common Stock, the Class C/D Common Stock, the Existing Warrants, the Second Lien Claims and certain of their other obligations, to cancel the existing equity interests of Affinion Holdings and to recapitalize in accordance with the Term

Sheet through jointly-administered voluntary cases commenced by certain of the Affinion Parties (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (as amended, the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (together with any court with jurisdiction over the Chapter 11 Cases, the “Bankruptcy Court”) pursuant to a pre-packaged plan of reorganization (as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with this Agreement, the “Plan”) (the “In-Court Restructuring” and, together with the Recapitalization, the “Transactions” and each of the Recapitalization and the In-Court Restructuring, a “Transaction”);

WHEREAS, with respect to any Transaction, certain of the Consenting Stakeholders (i) have agreed to provide a backstop for a private placement offering, as described more fully in the Term Sheet, by executing and delivering an investor purchase agreement (as amended on the date hereof, the “Investor Purchase Agreement”) in the form attached hereto as Exhibit B simultaneous with their execution and delivery of this Agreement and (ii) have consented to amend the existing Warrant Agreement, dated as of May 10, 2017, by and among Affinion Holdings and American Stock Transfer & Trust Company LLC, as warrant agent (the “Existing Warrant Agreement”) to force a mandatory exercise of all Existing Warrants into shares of Company Common Stock immediately prior to the Merger (as defined below) (the “Warrant Agreement Amendment”) in the form attached hereto as Exhibit C;

WHEREAS, in connection with a Recapitalization, XXXX Merger Sub, Inc., a Delaware corporation and newly formed wholly owned subsidiary of Affinion Holdings, will merge with and into Affinion Holdings, with Affinion Holdings as the surviving entity (the “Merger”), pursuant to an Agreement and Plan of Merger in the form attached hereto as Exhibit D (the “Merger Agreement”), and pursuant to which (i) the Class C/D Common Stock, will be cancelled and the holders thereof shall receive $0.01 per share of Class C/D Common Stock as merger consideration, (ii) the Company Common Stock (including the Company Common Stock issued as a result of the Warrant Agreement Amendment) will be cancelled and the holders thereof will receive Investor Warrants of the surviving entity and (iii) the Class M Common Stock, issued in the Exchange Offer, will be cancelled and the holders thereof will receive shares of New Common Stock of the surviving entity;

WHEREAS, in connection with a Recapitalization, pursuant to the Second Lien Commitment Letter (as defined below), the Second Lien Lenders have agreed to provide second lien financing as further described in Section 2(f) of this Agreement and, in the event of the Second Lien Credit Facility Funding (as defined below), the Second Lien Lenders will hold certain claims against the Affinion Parties arising on account of such financing (the “Second Lien Claims”);

WHEREAS, with respect to an In-Court Restructuring, certain of the Consenting Stakeholders have agreed to provide a DIP Facility, by executing and delivering a commitment (the “DIP Commitment” and the Consenting Stakeholders party to the DIP Commitment, the “Backstop Parties”), attached hereto as Exhibit E;

WHEREAS, each of the Parties has reviewed, or has had the opportunity to review, the Term Sheet and this Agreement with the assistance of legal and financial advisors of its own choosing; and

WHEREAS, each Consenting Stakeholder has indicated its consent to the Transactions, whether implemented pursuant to a Recapitalization or pursuant to an In-Court Restructuring, and the Affinion Parties desire to obtain the commitment of the Consenting Stakeholders to support and vote to accept the Transactions, in each case subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:

AGREEMENT

1. RSA Effective Date. The Original Support Agreement became effective on March 1, 2019 (such date, the “RSA Effective Date”).

2. Form of Transactions.

(a)

If, on or prior to the Launch Date, the Stockholder Necessary Approvals shall not have been obtained, then the Parties shall effectuate the Transaction through the In-Court Restructuring on terms and conditions consistent in all material respects with the Term Sheet.

(b)

If, on or prior to the Launch Date, the Stockholder Necessary Approvals shall have been obtained, then:

(i)

if each of (1) Consenting Noteholders holding, in the aggregate, at least 94.5% of the principal amount outstanding of all Note Claims have executed and delivered this Agreement, and (2) Consenting Lenders holding, in the aggregate, at least [75]% of the principal amount outstanding of all Lender Claims have executed and delivered this Agreement, then the Company shall commence an out-of-court exchange offer and consent solicitation on the terms set forth in the Term Sheet (the “Exchange Offer”) without simultaneously soliciting votes on the Plan; provided, however, that if by the tenth (10th) Business Day following Launch Date the following conditions (together, the “Offering Amendment Conditions”) have not been met or waived, then the Affinion Parties shall amend the Offering Memorandum and Disclosure Statement to commence simultaneously soliciting votes on the Plan to implement the In-Court Restructuring: (x) Noteholders holding, in the aggregate, at least 98% of the principal amount outstanding of all Note Claims have validly tendered their Existing Notes pursuant to the Exchange Offer; and (y) Lenders holding, in the aggregate, at least 95.5% of the principal amount outstanding of all Lender Claims have agreed to amend the Credit Agreement; or

(ii)

if either (1) Consenting Noteholders holding, in the aggregate, at least 94.5% of the principal amount outstanding of all Note Claims have not executed and delivered this Agreement, or (2) Consenting Lenders holding, in the aggregate, at least [75]% of the principal amount outstanding of all Lender Claims have not executed and delivered this Agreement, then the Company shall simultaneously commence the Exchange Offer and solicit votes on the Plan.

(c)

If, on or before April 6, 2019 (as such date may be extended in writing from time to time by the Affinion Parties, with the consent of the Required Lenders (as defined in the Credit Agreement), the “Outer Date”), (i) Noteholders holding, in the aggregate, at least 98% of the principal amount outstanding of all Note Claims shall have validly tendered their Existing Notes pursuant to the Exchange Offer and not withdrawn prior to the expiration date of the Exchange Offer; (ii) Lenders holding, in the aggregate, at least 95.5% of the principal amount outstanding of all Lender Claims agree to amend the Credit Agreement as set forth in the Term Sheet (as so amended, the “Amended Senior Credit Agreement”); and (iii) (A) holders of Company Common Stock tender votes that constitute a Stockholder Supermajority Vote (as defined in the Shareholders Agreement, dated as of November 9, 2015, among Affinion Holdings and the investors party thereto (as amended from time to time, the “Shareholders Agreement”)) have granted the necessary approvals required pursuant to Section 2.2(a)(ii) and (iv) of the Shareholders Agreement for Affinion Holdings to consummate the Merger and for Affinion Holdings to enter into transactions with certain holders, or their affiliates, of 5% or more of the issued and outstanding Company Common Stock (the “Stockholder Necessary Approvals”) and (B) Affinion Holdings has filed with the Securities and Exchange Commission (the “SEC”) a definitive Information Statement on Schedule 14C disclosing the receipt of the required Stockholder Supermajority Vote to approve the Stockholder Necessary Approvals (the “Schedule 14C”) (the foregoing conditions under clause (i), (ii) and (iii), the “Consent Requirements”), then the Parties shall, subject to the satisfaction or waiver of the conditions precedent contained in the Definitive Documentation (as defined in Section 4 below), effectuate the Transactions through the Recapitalization on terms and conditions consistent in all material respects with the Term Sheet and through, among other things, the execution and delivery of the Definitive Documentation.

(d)

If the Recapitalization is consummated, at the sole discretion of the Administrative Agent under the Credit Agreement, funds equal to not more than $20 million otherwise distributable to the Consenting Lenders may be used to satisfy outstanding Lender Claims held by those Lenders that are not Consenting Lenders (the “Non-Consenting Lenders”).

(e)

If (A) the Consent Requirements are not satisfied by the Outer Date or (B) the Consent Requirements are satisfied by the Outer Date but the conditions precedent contained in the Definitive Documentation to effectuate the Recapitalization have not been satisfied or waived by five (5) Business Days after the Outer Date, then the Parties shall, as soon as practicable and no later than the date set forth in Schedule 1(d), but subject to the satisfaction or waiver of the conditions precedent contained in the Definitive Documentation, effectuate the Transaction through the In-Court Restructuring on terms and conditions consistent in all material respects with the Term Sheet and through, among other things, the execution and delivery of the Definitive Documentation.

(f)

Until such time as the Chapter 11 Cases have been commenced, but no later than the Outer Date (as defined in this Agreement) to the extent requested by Affinion Holdings, ICG, Empyrean Investments, LLC, Xxxxxxxxx LLC, and Xxxxxxx Associates, L.P. (either directly or through its affiliates) (the “Second Lien Commitment Parties”) agree to provide the second lien credit facility initially contemplated by that certain Commitment Letter dated as of November 14, 2018, delivered to the Company by certain Committed Lenders under and as defined thereunder (the “Second Lien Commitment Letter”) on the terms and conditions set forth therein, subject to the amendments, additional terms and conditions, waivers and other modifications to the terms of the Second Lien Commitment Letter set forth on Exhibit G hereto.¹

3. Exhibits and Schedules Incorporated by Reference. Each of the exhibits and schedules attached hereto (including, without limitation, the Term Sheet) and each of the exhibits and schedules to such exhibits (collectively, the “Exhibits and Schedules”) is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include the Exhibits and Schedules. In the event of any inconsistency between this Agreement (without reference to the Exhibits and Schedules) and the Exhibits and Schedules, the Exhibits and Schedules (other than the Transferee Joinder) shall govern and control.

4. Definitive Documentation.

(a)

The definitive documents and agreements governing the Transactions (collectively, the “Definitive Documentation”) shall include:

(i)

the Investor Purchase Agreement;

In the event that the second lien credit facility (the “Second Lien Credit Facility”) as contemplated by the Second Lien Commitment Letter is funded (“Second Lien Credit Facility Funding”), each of the investors that have funded the executed Second Lien Credit Facility (each a “Second Lien Lender” and, together, the “Second Lien Lenders”) who are Consenting Stakeholders in any capacity whatsoever shall automatically and without further action of any kind become party to this Agreement as Consenting Stakeholders in their capacity as Second Lien Lenders.

(ii)

the Affinion Parties’ Confidential Offering Memorandum, Consent Solicitation, Private Placement and Disclosure Statement setting forth the terms and conditions of the Transactions (the “Offering Memorandum and Disclosure Statement”);

(iii)

the Amended Senior Credit Agreement, any amendments to other Senior Credit Documents and any related documents;

(iv)

a supplemental indenture to the Existing Notes Indenture, effectuating the proposed amendments described in the Offering Memorandum and Disclosure Statement (the “Supplemental Indenture”);

(v)

an indenture (the “New Indenture”) governing the notes described in Annex B to the Term Sheet (the “New Notes”) and the form of the New Notes;

(vi)

the Merger Agreement;

(vii)

any amendment(s) to governance or organizational documents, including the bylaws and certificate of incorporation of Affinion Holdings (the “Charter Amendment”);

(viii)

the warrant agreement (the “New Warrant Agreement”) governing the New Xxxxx Warrants;

(ix)

a new Registration Rights Agreement, described in Annex E to the Term Sheet (the “Registration Rights Agreement”);

(x)

the new Stockholders Agreement, described in Annex F to the Term Sheet (the “Stockholders Agreement”);

(xi)

the MIP;

(xii)

the Investor Warrant Agreement;

(xiii)

the Warrant Agreement Amendment;

(xiv)

any amendments to, or new, executive employment agreements;

(xv)

in the event of the Second Lien Credit Facility Funding, a Second Lien Credit Agreement to be entered into by and among Affinion Group Holdings, Inc., Affinion Group, Inc., the lenders party thereto and Cortland Capital Market Services LLC as Collateral Agent (the “Second Lien Agent” and such agreement, the “Second Lien Credit Agreement”), the related security agreements, and any other documents related to the Second Lien Credit Facility (the “Second Lien Documents”);

(xvi)

in the event the Chapter 11 Cases are commenced:

(1) the Disclosure Statement (which, for the avoidance of doubt, shall be in the form of the “Offering Memorandum and Disclosure Statement”);

(2) the Plan (including all exhibits, annexes and schedules thereto);

(3) the plan supplement documents (which may include, without limitation, the following: (i) a schedule of retained causes of action; (ii) new certificates of incorporation; (iii) new by-laws; and (iv) a list of members of the New Board) (the “Plan Supplement Documents”);

(4) the solicitation materials (including any ballots and notices, but excluding the Plan and the Offering Memorandum and Disclosure Statement, and related exhibits) with respect to the Plan (collectively, the “Solicitation Materials”);

(5) the combined order of the Bankruptcy Court approving the Disclosure Statement and the Plan (the “Confirmation Order”);

(6) the first day and second day pleadings that the Affinion Parties determine are necessary or desirable to file with the Bankruptcy Court, the retention applications, all orders sought pursuant thereto and any other material motions and orders (the “Chapter 11 Pleadings”); and

(7) the documentation in respect of any DIP facility and authorizing use of cash collateral, including any motions and orders relating to the use of cash collateral, debtor-in-possession financing and exit facility (including any exhibits, schedules, amendments, modifications or supplements thereto) (the “DIP/Cash Collateral Documents”);

(xvii)

any document or filing identified in the Term Sheet as being subject to approval or consent rights under Section 4(b) of this Agreement; and

(xviii)

such other documents, pleadings, agreements or supplements, as may be reasonably necessary or advisable to implement the Transactions.

(b)

The Definitive Documentation identified in Section 4(a) of this Agreement that remain subject to completion, shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement (including the Term Sheet), and shall otherwise be in form and substance satisfactory to the Affinion Parties; provided, however, that:

(i)

(a) the Offering Memorandum and Disclosure Statement (excluding exhibits, unless specifically enumerated in this Section 4(b)(i)), (b) the Amended Senior Credit Agreement, (c) the MIP, (d) the Plan (excluding exhibits, unless specifically enumerated in this Section 4(b)(i)), (e) the Solicitation Materials, (f) the Confirmation Order, (g) the DIP/Cash Collateral Documents, (h) the Supplemental Indenture, (i) the New Indenture and form of the New Notes, (j) the Charter Amendment and (k) any amendments to, or new, executive employment agreements shall also be in form and substance reasonably satisfactory to those Consenting Lenders holding, as of the applicable date(s) of determination, in the aggregate, at least a majority of the principal amount outstanding of all Lender Claims held by the Consenting Lenders as of such date(s) (the “Required Consenting Lenders”);

(ii)

(a) the Offering Memorandum and Disclosure Statement (excluding exhibits, unless specifically enumerated in this Section 4(b)(ii)), (b) the Amended Senior Credit Agreement, (c) the Supplemental Indenture, (d) the New Indenture and form of the New Notes, (e) the Charter Amendment, (f) the New Warrant Agreement, (g) the Registration Rights Agreement, (h) the Stockholders Agreement, (i) the MIP, (j) the Plan (excluding exhibits, unless specifically enumerated in this Section 4(b)(ii)), (k) the Solicitation Materials, (l) the Confirmation Order, (m) the DIP/Cash Collateral Documents and (n) any amendments to, or new, executive employment agreements shall also be in form and substance reasonably satisfactory to the Consenting Noteholders holding, as of the applicable date(s) of determination, at least a majority of the principal amount outstanding of all Note Claims held by the Consenting Noteholders as of such date(s) (the “Required Consenting Noteholders” and each of (i) the Required Consenting Lenders and (ii) the Required Consenting Noteholders, the “Required Consenting Stakeholders”);

(iii)

The Second Lien Credit Agreement and any other Second Lien Documents (if any) shall be in form and substance reasonably satisfactory to the Second Lien Lenders; and

(iv)

(a) the Charter Amendment, (b) the New Warrant Agreement, (c) the Investor Warrant Agreement; (d) the New Notes and (e) the Stockholders Agreement shall conform in all material respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, ICG or Xxxxxxx, and the Registration Rights Agreement shall (i) conform in all material respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, ICG or Xxxxxxx, and (ii) otherwise be in form and substance reasonably satisfactory to at least one of ICG or Xxxxxxx;

provided further, however, that, unless the Required Consenting Lenders, the Required Consenting Noteholders, or the Second Lien Lenders, as applicable, have consent rights over the Definitive Documentation as outlined above, the Affinion Parties shall consult with the Consenting Stakeholders regarding the form and substance of the Definitive Documentation specifically enumerated in Section 4(a) that remains subject to completion or approval by the Bankruptcy Court (as applicable); provided that, solely to the extent any other Definitive Documentation listed in Section 4(a) (that remains subject to completion or approval by the Bankruptcy Court (as applicable)) directly and adversely affects the treatment, claims of, or rights and benefits granted to, or received by, the Consenting Lenders, the Consenting Noteholders, or the Second Lien Lenders, as applicable, under the Term Sheet or Plan, such Definitive Documentation shall be in form and substance reasonably acceptable to the Required Consenting Lenders, the Required Consenting Noteholders or the Second Lien Lenders, as applicable. Without limiting the generality of the foregoing, the Affinion Parties shall use their reasonable best efforts to provide to HPS’s, Xxxxxxx’x, ICG’s and Xxxxxxx’x (each as defined below) legal counsel drafts of all Definitive Documentation not less than three (3) days before the date when the Affinion Parties intend to enter into such Definitive Documentation, or as soon as reasonably practicable thereafter, and consult in good faith with such counsel regarding the form and substance of any Definitive Documentation.

(c)

The Affinion Parties shall use their reasonable best efforts to provide to HPS’s, Xxxxxxx’x, ICG’s and Xxxxxxx’x (each as defined below) legal counsel drafts of all motions or applications, including proposed orders, and other documents that the Affinion Parties intend to file with the Bankruptcy Court not less than three (3) days before the date when the Affinion Parties intend to file any such motion, application or document, including for the avoidance of doubt, all “first day” and “second day” motions and orders and without limiting any consent rights set forth in this Agreement, consult in good faith with such counsel regarding the form and substance of any such proposed filing; provided, however, that in the event that three (3) days’ notice is impossible or impracticable under the circumstances, the Affinion Parties shall provide draft copies of any motions or applications, including proposed orders and any other documents the Affinion Parties intend to file with the Bankruptcy Court to HPS’s, Xxxxxxx’x, ICG’s and Xxxxxxx’x legal counsel as soon as otherwise practicable before the date when the Affinion Parties intend to file any such motion, application or document. The Affinion Parties shall use reasonably best efforts to notify HPS’s, Xxxxxxx’x, ICG’s and Xxxxxxx’x legal counsel telephonically or by electronic mail to advise them of the documents to be filed and the facts that make the provision of advance copies not less than three (3) days before submission impossible or impracticable.

(d)

Notwithstanding anything in this Agreement to the contrary, in no case shall any of the proposed terms, conditions, representations, warranties or covenants of any Definitive Documentation have a material, disproportionate and adverse effect on (i) the Consenting Noteholders that were signatories to the Original Support Agreement as of the RSA Effective Date relative to other Noteholders or (ii) the Consenting Lenders that were signatories to the Original Support Agreement as of the RSA Effective Date relative to other Lenders.

5. Mutual Agreement of the Parties to Support the Transactions. Each of the Parties to this Agreement agrees (severally and not jointly), from the RSA Effective Date until the occurrence of a Termination Date (as defined in Section 12 of this Agreement) applicable to such Party, to:

(a)

support and cooperate with the other Parties to this Agreement to take all actions commercially reasonably necessary to support and consummate the Recapitalization;

(b)

if the Consent Requirements are not satisfied by the Outer Date, support and cooperate with the other Parties to this Agreement to take all actions commercially reasonably necessary to consummate the In-Court Restructuring;

(c)

take or cause to be taken all actions commercially reasonably necessary to consummate the Transactions on the terms and subject to the conditions set forth in the Term Sheet and this Agreement;

(d)

provide reasonably prompt written notice (in accordance with Section 26 of this Agreement) to Parties between the RSA Effective Date and the Termination Date of (A) the occurrence, or failure to occur, of any event of which the Party has actual knowledge which occurrence or failure would be reasonably likely to cause any covenant contained in this Agreement not to be satisfied in any material respect, or (B) receipt of any notice from any third party alleging that the consent of such third party is or may be required in connection with the Transactions;

(e)

to the extent any legal or structural impediment arises that would be reasonably likely to prevent, hinder, or delay the consummation of the Transactions, negotiate with the Parties in good faith appropriate and reasonable additional or alternative provisions to address any such impediment; provided that the treatment, claims of, or rights and benefits granted to, or received by, the Consenting Stakeholders, the proposed timing for consummation of the Transactions set forth in this Agreement, and other material terms of this Agreement must be substantially preserved in such alternative or additional provisions; and

(f)

negotiate in good faith any terms of the Definitive Documentation that are subject to negotiation as of the RSA Effective Date.

6. Commitment of Consenting Stakeholders. Each Consenting Stakeholder agrees (severally and not jointly), from the RSA Effective Date until the occurrence of a Termination Date (as defined in Section 12 of this Agreement) applicable to such Consenting Stakeholder, to:

(a)

with respect to the Consenting Lenders only, (i) agree to forbear, and to instruct the Administrative Agent to forbear, from exercising any remedies against the Affinion Parties and any Guarantors of the Lender Claims, solely in accordance with the terms of the forbearance agreement, dated as of March 1, 2019, between Affinion, certain Affinion Parties thereto, the Administrative Agent and the Required Lenders (as defined under the Credit Agreement) (the “Forbearance Agreement”), and (ii) consent to amend the Credit Agreement to reflect the terms set forth in the Term Sheet and to permit the consummation of the Recapitalization, in each case, at or prior to the Outer Date (the “Lender Consent”);

(b)

with respect to the Consenting Noteholders only, at or prior to the Consent Time (as defined in the Offering Memorandum and Disclosure Statement) tender for exchange all Existing Notes beneficially owned by such Consenting Noteholder or for which it is the nominee, investment manager, or advisor for beneficial holders thereof pursuant to the Exchange Offer in accordance with the applicable procedures set forth in the Offering Memorandum and Disclosure Statement, in each case as specified by such Consenting Noteholder on its respective signature page hereto or thereafter acquired, and consent to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing Notes Indenture in accordance with the Term Sheet;

(c)

with respect to the Consenting Noteholders only, during any Chapter 11 Cases, agree to forbear, and to instruct the Trustee to forbear, from taking any action or exercising any rights or remedies against any guarantors of the Existing Notes;

(d)

with respect to the Consenting Lenders, the Consenting Noteholders and the Second Lien Lenders, agree that (i) whether or not required by the Amended Senior Credit Agreement, the Existing Notes Indenture or the Second Lien Credit Facility, respectively, upon the RSA Effective Date, such underlying debt shall not be publicly rated and (ii) upon the consummation of the Transactions, any new debt issued under the Amended Senior Credit Agreement, the New Indenture, or such other applicable debt documents, shall not be publicly rated;

(e)

with respect to those Consenting Stakeholders that have entered into a DIP Commitment, not terminate (nor seek to terminate) such DIP Commitment except as otherwise provided in such DIP Commitment;

(f)

with respect to those Consenting Stakeholders that have entered into the Second Lien Commitment Letter, to not terminate such commitment except as otherwise provided in such Second Lien Commitment Letter, subject to the waivers to the terms of the Second Lien Commitment Letter set forth on Exhibit G hereto;

(g)

with respect to those Consenting Stakeholders that are or that become Second Lien Lenders only, during any Chapter 11 Cases agree to forbear, and to instruct the Second Lien Agent to forbear, from taking any action or exercising any rights or remedies against any guarantors of the Second Lien Credit Facility;

(h)

with respect to those Consenting Stakeholders that hold Company Common Stock, simultaneously with the execution and delivery of the Original Support Agreement, vote all of its Company Common Stock now owned by such Consenting Stakeholder in favor of the Stockholder Necessary Approvals (including the ratification of the entry by any such holders or their affiliates into this Agreement) (the “Stockholder Consent”);

(i)

with respect to the Consenting Stakeholders that are to be a party to the Investor Purchase Agreement, simultaneously with the execution and delivery of this Agreement, duly execute and deliver the Investor Purchase Agreement;

(j)

with respect to Xxxxxxx, prior to the closing of the Second Lien Credit Facility, grant its consent to cause, or cause brokers on its behalf to grant consents to cause, the Trustee to enter into a supplemental indenture (the “Additional Supplemental Indenture”) with respect to the Existing Notes Indenture, which will amend the Existing Notes Indenture to permit the incurrence of the proposed Second Lien Credit Facility and all the transactions related thereto, including the upsizing of the debt baskets to allow for the incurrence of the full amount of the Second Lien Credit Facility (including any incremental amount and interest paid in kind contemplated by the Second Lien Commitment Letter), modifying the lien covenant to allow the Second Lien Credit Facility to be secured as contemplated by the Second Lien Commitment Letter, and permitting Affinion Holdings to guaranty the Second Lien Credit Facility and pledge its assets to secure such guarantee (provided that, the executed Supplemental Indenture will not become operative until the closing date for the Second Lien Credit Facility);

(k)

provide to counsel and investment banker for the Company on a confidential basis a schedule showing the principal amount of Lender Claims, Second Lien Claims, Existing Notes, and Company Common Stock held by such Consenting Stakeholder (the “Confidential Schedule of Holdings”), which shall not be disclosed by such counsel or investment banker to any third party without such Consenting Stakeholder’s prior written consent;

(l)

use commercially reasonable efforts to support and take all actions as are necessary and appropriate to obtain any and all required regulatory and/or third-party approvals to consummate the Transactions;

(m)

effective solely upon the consummation of a Recapitalization, release and waive, and covenant not to xxx with respect to, any and all claims or causes of action of any kind whatsoever, arising from or relating to the Transactions, whether known or unknown, that directly or indirectly arise out of, are based upon or are in any manner connected with any Consenting Stakeholder’s or its successors’ and assigns’ ownership or acquisition of any equity securities of the Affinion Parties or any indebtedness under the Existing Notes Indenture or the Credit Agreement, including any related transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, including without limitation any approval or acceptance given or denied, which occurred, existed, or was taken, permitted or begun prior to the date of such release, in each case, that the Consenting Stakeholders or their successors and assigns have or may have had against (a) the Affinion Parties or their affiliates and stockholders and (b) the directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, of the Affinion Parties or affiliates and stockholders, whether those claims arise under federal or state securities laws or otherwise (for the avoidance of doubt, the Consenting Stakeholders shall not be prohibited from asserting claims or causes of action against any Party or affiliate that has materially breached or terminated this Agreement); provided, however, that no claims or causes of action arising after the consummation of the Recapitalization or under any Definitive Documentation shall be released or waived, and no Consenting Stakeholder hereby covenants not to xxx with respect thereto;

(n)

solely with respect to an In-Court Restructuring, (i) timely vote all of its Lender Claims, Note Claims, Second Lien Claims (if any), and all other claims against, or, if and to the extent applicable, interests in (including the Existing Warrants, the Class C/D Common Stock and the Company Common Stock), as applicable, the Affinion Parties now or hereafter owned by such Consenting Stakeholder (or which such Consenting Stakeholder now or hereafter has voting control over) to accept the Plan in accordance with the applicable procedures set forth in the Disclosure Statement and the Solicitation Materials; (ii) timely return a duly-executed ballot in connection therewith; and (iii) not “opt out” of or object to any releases or exculpation provided under the Plan (and, to the extent required by such ballot, affirmatively “opt in” to such releases and exculpation);

(o)

unless this Agreement has been terminated, not withdraw, amend, change, or revoke (or seek to withdraw, amend, change, or revoke) its participation in the Exchange Offer, Lender Consent, Stockholder Consent, Investor Purchase Agreement, tender, consent, or vote with respect to the Plan (if the Transactions are implemented pursuant to an In-Court Restructuring), as applicable; provided, however, that upon termination of this Agreement (except if such Agreement is automatically terminated due to the consummation of the Transactions), any and all consents and ballots tendered by such Consenting Stakeholder prior to such termination shall be deemed, for all purposes, automatically null and void ab initio, shall not be considered or otherwise used in any manner by the Parties in connection with the Plan, this Agreement or otherwise, and such consents or ballots may be changed or resubmitted regardless of whether the applicable voting deadline has passed (without the need to seek a court order or consent from the Affinion Parties allowing such change or resubmission), and the Affinion Parties shall not oppose any such change or resubmission on account of this Agreement;

(p)

not (i) object to, delay, impede, or take any other action (including, as applicable, to instruct or direct the Trustee or Administrative Agent or any successor to the Trustee or Administrative Agent) to interfere with the prompt consummation of the Transactions or the Definitive Documentation (including the entry by the Bankruptcy Court of an order approving the Disclosure Statement, orders authorizing the Affinion Parties to retain and employ Akin Gump Xxxxxxx Xxxxx & Xxxx, LLP, Guggenheim Securities, LLC, and AlixPartners LLP (collectively, the “Affinion Advisors”) and the Confirmation Order, if applicable); (ii) directly or indirectly, propose, file, support, or vote for any restructuring, workout, reorganization, liquidation, or chapter 11 plan for any of the Affinion Parties, other than the Transactions and the Plan; or (iii) encourage or support any other person or entity to do any of the foregoing; and

(q)

not take any other action, including, without limitation, initiating or joining in any legal proceeding, that is inconsistent with its obligations under this Agreement, that could hinder, delay, or prevent the timely consummation of the Transactions and, if the Transactions are implemented pursuant to an In-Court Restructuring, the confirmation and consummation of the Plan and entry of the Confirmation Order.

Notwithstanding the foregoing, nothing in this Agreement, nor a vote to accept the Plan by any Consenting Stakeholder (if the Transactions are implemented pursuant to an In-Court Restructuring) shall (w) be construed to limit consent and approval rights provided in this Agreement and the Definitive Documentation, (x) be construed to prohibit any Consenting Stakeholder from contesting whether any matter, fact, or circumstance is a breach of, or is inconsistent with, this Agreement, or exercising rights or remedies specifically reserved in this Agreement, (y) be construed to prohibit any Consenting Stakeholder from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases (if the Transactions are

implemented pursuant to an In-Court Restructuring), so long as such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the consummation of the Transactions, or (z) impair or waive the rights of any Consenting Stakeholder or the Affinion Parties to assert or raise any objection expressly permitted under this Agreement in connection with any hearing on confirmation of the Plan or in the Bankruptcy Court.

7. Obligations of the Affinion Parties.

(a) Affirmative Covenants. Subject to the terms and conditions hereof, from the RSA Effective Date until the occurrence of a Termination Date, each of the Affinion Parties agrees to:

(i)

use commercially reasonable efforts to implement and consummate the Transactions in accordance with the applicable milestones set forth in Schedule 1 hereto (collectively, the “Milestones”), which Milestones may only be extended in accordance with Section 28 of this Agreement;

(ii)

support and take all actions as are reasonably necessary and appropriate to obtain any and all required regulatory and/or third-party approvals to consummate the Transactions;

(iii)

timely pay all fees and expenses as set forth in Section 15 of this Agreement;

(iv)

if the Transactions are implemented pursuant to an In-Court Restructuring, (a) timely file a formal objection to any motion filed with the Bankruptcy Court seeking the entry of an order (i) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code); (ii) converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code; or (iii) dismissing the Chapter 11 Cases and (b) actively oppose and object to the efforts of any person seeking to directly or indirectly, object to, delay, impede, or take any other action to interfere with the acceptance, implementation, or consummation of the Transactions (including, if applicable, the filing of timely filed objections or written responses in a Chapter 11 Cases);

(v)

if the Transactions are implemented pursuant to an In-Court Restructuring, timely file a formal objection to any motion filed with the Bankruptcy Court seeking the entry of an order modifying or terminating the Affinion Parties’ exclusive right to file and/or solicit acceptances of a plan of reorganization;

(vi)

to operate its business in the ordinary course, taking into account the commencement of the Chapter 11 Cases, if applicable;

(vii)

to use commercially reasonable efforts to execute and deliver the Definitive Documentation and any other required agreements to effectuate and consummate the Transactions as contemplated by this Agreement; and

(viii)

to use commercially reasonable efforts to seek additional support for the Transactions from the Affinion Parties’ other material stakeholders to the extent reasonably prudent.

(b) Release. Effective solely upon the consummation of a Transaction, each Affinion Party agrees to release and waive, and covenants not to xxx with respect to, any and all claims or causes of action of any kind whatsoever, arising from or related to the Transactions, whether known or unknown, that directly or indirectly arise out of, are based upon or are in any manner connected with the Transactions, including any related transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, including without limitation any approval or acceptance given or denied, which occurred, existed, or was taken, permitted or begun prior to the date of such release, in each case, that the Affinion Parties or their successors and assigns have or may have had against (a) each Consenting Stakeholder, its subsidiaries, affiliates and stockholders and (b) the directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, of such Consenting Stakeholder, its subsidiaries, affiliates and stockholders, whether those claims arise under federal or state securities laws or otherwise; provided, however, that the foregoing shall not apply to any claims or causes of action relating to the failure by any Consenting Stakeholder to satisfy its obligations set forth in Sections (6)(a), (b) or (e) of this Agreement.

(c) Negative Covenants. Subject to the terms and conditions hereof, from the RSA Effective Date until the occurrence of a Termination Date, the Affinion Parties agree that they shall not, directly or indirectly, take any of the following actions, unless such action is consented to in writing by the Required Consenting Stakeholders or such actions are otherwise consistent with the Transactions and/or the Term Sheet:

(i)

to undertake any action that is inconsistent with this Agreement, or which would unreasonably delay consummation of the Transactions and the Definitive Documentation; and

(ii)

to seek, solicit, or support any dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership, sale of assets (other than sale of inventory in the ordinary course), debt or equity financing or re-financing, or restructuring of the Affinion Parties (including, for the avoidance of doubt, a transaction premised on an asset sale under section 363 of the Bankruptcy Code), other than the Plan and Transactions.

(d) Fiduciary Duty. Notwithstanding anything to the contrary herein, (i) if the Parties seek to implement the Transactions pursuant to a Recapitalization, at any time prior to the Consent Requirements having been satisfied and (ii) if Parties seek to implement the Transactions pursuant to an In-Court Restructuring, then at any time after the Petition Date and prior to the entry of the Confirmation Order, the Affinion Parties may terminate their obligations under this Agreement if the board of directors of Affinion reasonably determines in good faith, based upon the advice of outside counsel, that continued performance of this Agreement would be inconsistent with the exercise of its fiduciary duties to all stakeholders under applicable law. Nothing in this Agreement shall require the Affinion Parties or the officers and employees of the Affinion Parties in their capacities as such to take or refrain from taking any action with respect to the Transactions to the extent such person or persons reasonably determines in good faith, based on the advice of outside counsel, that taking, or refraining from taking, such action, as applicable, would be inconsistent with its fiduciary obligations under applicable law. The Affinion Parties shall give the Consenting Stakeholders not less than two (2) Business Days prior written notice before the exercise of its rights under this Section 7(d) or the termination of this Agreement in accordance with Section 9(d) of this Agreement (it being understood that the specific performance provisions of Section 21 of this Agreement shall not be applicable to the parties with respect to the exercise of rights under this Section 7(d) or termination of this Agreement in accordance with Section 9(d) of this Agreement). For the avoidance of doubt, the foregoing shall not preclude the Consenting Stakeholders from challenging the appropriateness of the exercise of fiduciary duties as the basis for the exercise of rights under this Section 7(d) or the termination of this Agreement in accordance with Section 9(d) of this Agreement. Notwithstanding anything to the contrary herein, to the extent the Affinion Parties engage in any discussions or negotiations with any person or entity concerning any actual or proposed dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors, merger, transaction, consolidation, business combination, joint venture, partnership, sale of assets (other than sale of inventory in the ordinary course), debt or equity financing or re-financing, or restructuring of the Affinion Parties (including, for the avoidance of doubt, a transaction premised on an asset sale under section 363 of the Bankruptcy Code) other than the Plan and the Transactions (each, an “Alternative Transaction”), the Affinion Parties shall (x) provide a copy of any written offer or proposal (and notice of any oral offer or proposal) for such Alternative Transaction within three (3) Business Days of the Affinion Parties’ receipt of such offer or proposal to the legal counsel and the financial advisors to the Consenting Stakeholders that are subject to an obligation of confidentiality to Affinion with respect to such information (the “Consenting Stakeholder Advisors”) and (y) provide such information to the Consenting Stakeholders regarding such discussions (including copies of any materials provided to such parties hereunder) as necessary to keep the Consenting Stakeholder Advisors reasonably informed as to the status and substance of such discussions.

8. Consenting Stakeholder Termination Events. Each of (i) the Required Consenting Lenders, (ii) the Required Consenting Noteholders and (iii) acting together, the Second Lien Lenders (in each case, where applicable) shall have the right, but not the obligation, upon written notice to the other Parties, to terminate the obligations of the Consenting Lenders, the Consenting Noteholders or the Second Lien Lenders, as applicable, under this Agreement upon the occurrence of any of the following events (each, a “Consenting Stakeholder Termination Event”), unless waived, in writing, by the Required Consenting Lenders, the Required Consenting Noteholders or the Second Lien Lenders, as applicable, on a prospective or retroactive basis:

(a)

the failure to meet any Milestone unless (i) such failure is the result of any act, omission or delay on the part of any (x) Consenting Lender (solely in its capacity as a Consenting Lender), in the case of termination by the Required Consenting Lenders, (y) Consenting Noteholder (solely in its capacity as a Consenting Noteholder), in the case of termination by the Required Consenting Noteholders or (z) Second Lien Lender (solely in its capacity as a Second Lien Lender), in the case of termination by the Second Lien Lenders, in violation of its obligations under this Agreement or (ii) such Milestone is waived by the Required Consenting Stakeholders in accordance with Section 28 of this Agreement;

(b)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an order converting one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code or an order dismissing one or more of the Chapter 11 Cases;

(c)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an order appointing a trustee, receiver, or examiner with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter 11 Cases;

(d)

with respect to the Required Consenting Lenders, the Definitive Documentation does not conform in all material economic respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, the Consenting Lenders, or otherwise is not in form and substance reasonably acceptable to the Required Consenting Lenders (to the extent such acceptance is required by Section 4(b)) (in each instance, unless such Definitive Documentation has otherwise been previously agreed to, in writing, by the Required Consenting Lenders);

(e)

with respect to the Required Consenting Noteholders, the Definitive Documentation does not conform in all material economic respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, the Consenting Noteholders or otherwise is not in form and substance reasonably acceptable to the Required Consenting Noteholders (to the extent such acceptance is required by Section 4(b)) (in each instance, unless such Definitive Documentation has been previously agreed to in writing by the Required Consenting Noteholders);

(f)

with respect to the Second Lien Lenders, the Definitive Documentation does not conform in all material economic respects to this Agreement and Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, the Second Lien Lenders or otherwise is not in form and substance reasonably acceptable to the Second Lien Lenders (to the extent such acceptance is required by Section 4(b)) (in each instance, unless such Definitive Documentation has previously been agreed to in writing by the Second Lien Lenders);

(g)

in the event the Chapter 11 Cases are commenced, any Affinion Party files with the Bankruptcy Court any motion or application seeking authority to sell any material assets that is not contemplated in the Term Sheet without the prior written consent of the Required Consenting Lenders, the Required Consenting Noteholders and the Second Lien Lenders;

(h)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court grants relief terminating, annulling, or modifying the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any material assets of the Affinion Parties;

(i)

(1) any Affinion Party: (A) materially breaches any representation, warranty, or covenant under this Agreement, which breach is not cured within five (5) Business Days after receiving written notice of such breach, (B) withdraws or revokes the Plan, (C) amends or modifies the Definitive Documentation in a manner that is inconsistent in any material respect with the terms set forth in the Term Sheet and this Agreement, the other rights and benefits granted to, or received by, the Consenting Lenders, the Consenting Noteholders or the Second Lien Lenders, as applicable, pursuant to the Term Sheet or this Agreement, or the implementation thereof, unless such amendment or modification is otherwise consented to in accordance with Section 28 hereof or (D) files, publicly announces, or informs the Consenting Stakeholders of its intention to file a chapter 11 plan that contains terms and conditions that (i) do not provide the Consenting Lenders, the Consenting Noteholders or the Second Lien Lenders, as applicable, with the economic recovery set forth on, or the other rights and benefits granted to, or received by, the Consenting Lenders, the Consenting Noteholders or the Second Lien Lenders, as applicable, pursuant to the Term Sheet or this Agreement and (ii) are not otherwise consistent with this Agreement and the Term Sheet; (2) the Required Consenting Lenders (so long as such terminating Consenting Stakeholder is not a Consenting Lender) materially breach any representation, warranty or covenant under this Agreement, which breach or breaches are not cured within five (5) Business Days after receiving written notice of such breaches; (3) the Required Consenting Noteholders (so long as such terminating Consenting Stakeholder is not a Consenting Noteholder) materially breach any representation, warranty or covenant under this Agreement, which breach or breaches are not cured within five (5) Business Days after receiving written notice of such breaches; or (4) any Consenting Stakeholder that has entered into the Second Lien Commitment Letter breaches its obligations (i) under Section 6(f) of this Agreement not to terminate such commitment or (ii) under the Second Lien Commitment Letter to fund the Second Lien Credit Facility, in either case which breach or breaches are not cured within five (5) Business Days after receiving written notice of such breaches;

(j)

one or more of the DIP Commitments shall have been terminated by an Affinion Party without the consent of the Backstop Parties;

(k)

the occurrence of the termination of the Forbearance Agreement; provided, however, that this provision shall not apply if the Chapter 11 Cases are filed;

(l)

in the event the Chapter 11 Cases are commenced, either (i) any Affinion Party files with the Bankruptcy Court a motion, application, or adversary proceeding (or any Affinion Party supports any such motion, application, or adversary proceeding filed or commenced by any third party) (a) challenging the validity, enforceability, or priority of, or seeking avoidance or subordination of, the Lender Claims, the Note Claims or the Second Lien Claims, as applicable or (b) asserting any other cause of action against the Consenting Lenders, the Administrative Agent, the Consenting Noteholders, the Second Lien Lenders or the Trustee, as applicable, other than for the enforcement of the obligations of the Consenting Stakeholders hereunder or (ii) the Bankruptcy Court enters an order providing relief against any Consenting Lender, the Administrative Agent, any Consenting Noteholder, any Second Lien Lender or the Trustee, as applicable, with respect to any of the foregoing causes of action or proceedings filed by any Affinion Party;

(m)

if the Bankruptcy Court or other governmental authority with jurisdiction shall have issued any order, injunction, or other decree or taken any other action, in each case, which has become final and non-appealable and which restrains, enjoins, or otherwise prohibits the implementation of the Transactions in a way that cannot be remedied by the Affinion Parties or the effect of which would render the Plan incapable of consummation on the terms set forth in this Agreement and the Term Sheet;

(n)

any Affinion Party terminates its obligations under and in accordance with Section 9(d)of this Agreement;

(o)

the Affinion Parties fail to timely pay the Restructuring Expenses in accordance with Section 15 hereof;

(p)

in the event the Chapter 11 Cases are commenced, the entry of an order by the Bankruptcy Court or any other court with appropriate jurisdiction denying confirmation of the Plan, or if the Confirmation Order is reversed or vacated by a final order;

(q)

in any instance, the Consenting Stakeholders do not hold, in the aggregate, at least 66-2/3% of the principal amount outstanding of all of each of the Lender Claims, the Second Lien Claims and the Note Claims;

(r)

in the event the Chapter 11 Cases are commenced, the Affinion Parties execute or file with the Bankruptcy Court any Definitive Documentation that is inconsistent with the requirements set forth in Section 4(b) of this Agreement; or

(s)

in the event the Chapter 11 Cases are commenced, the Bankruptcy Court enters an order in the Chapter 11 Cases terminating any of the Affinion Parties’ exclusive right to file a plan or plans of reorganization pursuant to section 1121 of the Bankruptcy Code.

9. The Affinion Parties’ Termination Events. The Affinion Parties shall have the right, but not the obligation, upon written notice to the Consenting Stakeholders, to terminate the obligations of the Affinion Parties (jointly) under this Agreement upon the occurrence of any of the following events (each a “Company Termination Event,” and together with the Consenting Stakeholder Termination Events, the “Termination Events”), unless waived, in writing, by the Affinion Parties on a prospective or retroactive basis:

(a)

the failure to meet the Milestone set forth on Schedule 1(e)(4) unless (i) such failure is the result of any act, omission, or delay on the part of any Affinion Party in violation of its obligations under this Agreement or (ii) such Milestone is waived by the Affinion Parties in accordance with Section 28 of this Agreement;

(b)

a material breach by any Consenting Stakeholder of any representation, warranty, or covenant of such Consenting Stakeholders set forth in this Agreement that could reasonably be expected to have a material adverse impact on the timely consummation of the Transactions that (to the extent curable) remains uncured for a period of five (5) days after notice and a description of such breach is provided to such Consenting Stakeholder; provided that such termination right shall be ineffective if the Affinion Parties are seeking termination as a result of a breach by any Consenting Stakeholder and at such time Consenting Lenders and Consenting Noteholders holding, in the aggregate, at least 66-2/3% of the principal amount outstanding of all of each of the Lender Claims and Note Claims, respectively, have not breached this Agreement in any material respect;

(c)

one or more of the DIP Commitments shall have been terminated without the consent of the Affinion Parties, provided, however, that the termination of one or more DIP Commitments without the consent of the Affinion Parties shall not give rise to a Company Termination Event hereunder if within ten (10) Business Days following receipt by the Affinion Parties and Xxxxxxx of an Enforcement Notice, Xxxxxxx or its affiliate has delivered to the Affinion Parties a commitment to provide replacement junior DIP financing that provides for the repayment of all amounts outstanding under the DIP Facility and the termination of all DIP Commitments;

(d)

the Affinion Parties determine to terminate this agreements pursuant to Section 7(d) of this Agreement;

(e)

in any instance, the Consenting Stakeholders remaining as Parties to this Agreement do not meet the voting thresholds in Section 1(b) and (c) of the Original Support Agreement; or

(f)

10. Individual Termination.

(a)

Any Consenting Stakeholder may terminate this Agreement as to itself only, in the event that (a) this Agreement is amended, modified or supplemented without its consent in such a way as to materially, disproportionately and adversely affect such Consenting Stakeholder relative to similarly situated Consenting Stakeholders and (b) such amendment, modification or supplement is not undone, or such consent is not obtained, within five (5) Business Days following the provision of written notice describing such amendment, modification or supplement to the Affinion Parties and the other Consenting Stakeholders; provided, that this Section 10(a) shall not apply to the commitments of the Consenting Stakeholders under section 6(o).

(b)

Acting together, ICG and Xxxxxxx shall have the right, but not the obligation, upon written notice to the other Parties, to terminate their obligations under this Agreement upon the occurrence of the following events, unless waived, in writing, by ICG and Xxxxxxx on a prospective or retroactive basis:

(i)

the Charter Amendment, the New Warrant Agreement, the Investor Warrant Agreement, the New Notes or the Stockholders Agreement does not conform in all material economic respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, ICG or Xxxxxxx, or

(ii)

the Registration Rights Agreement (y) does not conform in all material economic respects to this Agreement and the Term Sheet with respect to the treatment, claims or rights and benefits granted to, or received by, ICG or Xxxxxxx, or (z) otherwise is not in form and substance reasonably satisfactory to at least one of ICG or Xxxxxxx (to the extent such acceptance is required by Section 4(b)) (in each instance, unless such modification has previously been agreed to in writing by ICG or Xxxxxxx).

11. Mutual Termination; Automatic Termination. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate automatically and all of the obligations of the Parties hereunder shall be of no further force or effect in the event that (i)(a) the Recapitalization is implemented in accordance with this Agreement and the Term Sheet or (b) the In-Court Restructuring is implemented in accordance with this Agreement and the Term Sheet, and the Confirmation Order is final and nonappealable; provided, that no Termination Event shall

be ongoing; (ii) the Transactions are not consummated in accordance with this Agreement and the Term Sheet by June 3, 2019, as such date may be extended in writing from time to time by the Affinion Parties and the Required Consenting Stakeholders; provided, that no Termination Event shall be ongoing; or (iii) the Affinion Parties and the Required Consenting Stakeholders mutually agree to such termination in writing.

12. Effect of Termination. The earliest date on which termination of this Agreement as to a Party is effective in accordance with Sections 8, 9, 10 or 11 of this Agreement shall be referred to, with respect to such Party, as a “Termination Date”. Upon the occurrence of a Termination Date, (i) all Parties’ (or, in the case of termination pursuant to Section 10, such terminating Party’s) obligations under this Agreement shall be terminated effective immediately, and all Parties hereto shall be released from all commitments, undertakings, agreements, consents, votes and obligations, (ii) any and all consents or votes tendered by the Parties shall be withdrawn by the respective holder in connection with this Agreement, the Recapitalization, the Plan or otherwise (except if a Transaction is consummated), and (iii) if Bankruptcy Court permission shall be required for a Consenting Stakeholder to change or withdraw (or cause to be changed or withdrawn) its vote in favor of the Plan, no Party to this Agreement shall oppose any attempt by such party to change or withdraw (or cause to be changed or withdrawn) such vote (except if a Transaction is consummated); provided, however, that each of the following shall survive any such termination: (a) any claim for breach of this Agreement that occurs prior to such Termination Date, and all rights and remedies with respect to such claims shall not be prejudiced in any way; (b) the Affinion Parties’ obligations in Section 15 of this Agreement accrued up to and including such Termination Date; and (c) Sections 6(d), 6(k), 6(m), 7(b), 12, 16, 18, 19, 20, 21, 22, 23, 25, 26, 27, 29, 31, 32, 36 and 37 of this Agreement. No Party may terminate this Agreement, and no Consenting Stakeholder may be counted among the Required Consenting Lenders or the Required Consenting Noteholders, as applicable, for purposes of terminating this Agreement, if such Party failed to perform or comply in all material respects with the terms and conditions of this Agreement, and such failure to perform or comply causes, or resulted in, the occurrence of one or more termination events specified herein.

13. Transfers of Claims and Interests. No Consenting Stakeholder shall (i) sell, transfer, assign, pledge, hypothecate, encumber, grant a participation interest in, or otherwise dispose of, directly or indirectly, any of its right, title, or interest in respect of any of such Consenting Stakeholder’s claims against, or interests in, any Affinion Party, as applicable, in whole or in part or (ii) deposit any of such Consenting Stakeholder’s claims against, or interests in, any Affinion Party, as applicable, into a voting trust, or grant any proxies, or enter into a voting agreement with respect to any such claims or interests (the actions described in clauses (i) and (ii) are collectively referred to herein as a “Transfer” and the Consenting Stakeholder making such Transfer is referred to herein as the “Transferor”), unless such Transfer is to another Consenting Stakeholder or any other entity (a “Transferee”) that first agrees in writing to be bound by the terms of this Agreement by executing and delivering to the Affinion Parties a Transferee Joinder substantially in the form attached hereto as Exhibit F (the “Transferee Joinder”). With respect to claims against or interests in an Affinion Party held by the relevant Transferee upon consummation of a Transfer in accordance herewith, such Transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Stakeholder, set forth in this Agreement as of the date of such Transfer. Upon compliance with the foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any liability for

breach of this Agreement that occurs prior to such Transfer and any remedies with respect to such claim) under this Agreement to the extent of such transferred rights and obligations. Any Transfer made in violation of this Section 13 shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to the Affinion Parties and/or any Consenting Stakeholder, and shall not create any obligation or liability of any Affinion Party or any other Consenting Stakeholder to the purported transferee. Notwithstanding the foregoing, a Qualified Marketmaker (as defined below), acting solely in its capacity as such, that acquires any Lender Claims subject to this Agreement shall not be required to execute a Transferee Joinder or otherwise agree to be bound by the terms and conditions set forth in this Support Agreement if, and only if, such Qualified Marketmaker sells or assigns such Lender Claims prior to the earlier of (i) the scheduled expiration of the Exchange Offer or (ii) the end of the tenth (10th) Business Day following its acquisition of such Claims, and the purchaser of such Claims is a Consenting Stakeholder (which Consenting Stakeholder shall give notice of such purchase to the Affinion Parties) or an entity that executes and provides a Transferee Joinder in accordance with the terms set forth in this Section 13; provided, however, that any such Qualified Marketmaker that is a Party to this Agreement shall otherwise be subject to the terms and conditions of this Agreement. In addition, notwithstanding that a Qualified Marketmaker is a Consenting Stakeholder, to the extent such Qualfied Marketmaker acquired any Lender Claims that are not subject to this Agreement with the purpose and intent of acting as a Qualified Marketmaker for such Lender Claims, such Qualified Marketmaker shall not be bound by the terms and conditions set forth in this Agreement with respect to such Lender Claims and may transfer such Lender Claims to a transferee that is not a Consenting Stakeholder at the time of such Transfer without the requirement that the transferee be or become a signatory to this Agreement or execute a Transferee Joinder; provided, however, that any such Qualified Marketmaker that is a Party to this Agreement shall otherwise be subject to the terms and conditions of this Agreement. For purposes of this Section 13, “Qualified Marketmaker” means an entity that holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers claims against the Affinion Parties, in its capacity as a dealer or market maker in claims against the Affinion Parties. For the avoidance of doubt, to the extent that a Consenting Stakeholder no longer holds any claims against, or interests in, the Affinion Parties, it will no longer be deemed a Consenting Stakeholder for purposes of determining whether a Qualified Marketmaker is required to execute a Transferee Joinder. For the avoidance of doubt, all obligations and restrictions imposed, and rights granted, by this Section 13 are subject in their entirety to Section 39 of this Agreement.

14. Further Acquisition of Claims or Interests.

(a)

Nothing in this Agreement shall be construed as precluding any Consenting Stakeholder or any of its affiliates from acquiring additional claims against or interests in any Affinion Parties; provided, however, that any such claims or interests shall automatically be subject to the terms and conditions of this Agreement. Upon any such further acquisition by a Consenting Stakeholder or any of their respective affiliates, such Consenting Stakeholder shall promptly notify in writing the Affinion Parties, counsel to HPS (as defined below) and counsel to Xxxxxxx (as defined below). Notwithstanding the foregoing, any claims against or interests in any Affinion Parties purchased by an affiliate of Xxxxxxx Sachs Bank USA shall not automatically be subject to the terms and conditions of this Agreement.

(b)

Notwithstanding the foregoing, the party who is designated in the Confidential Schedule of Holdings may settle or deliver any claims or interests pursuant to an agreement to Transfer such claims or interest entered into by such Party prior to the date of this Agreement and pending as of the date of such Party’s entry into this Agreement without the requirement that the transferee be or become a Party or execute a Transferee Joinder and any such Transfer shall not be subject to the restrictions of Section 13.

15. Fees and Expenses.

(a)

Subject to Section 12 of this Agreement, the Affinion Parties shall pay or reimburse, and, if applicable, shall seek under the DIP/Cash Collateral Documents authority to pay in the event the Chapter 11 Cases are commenced, when due and payable (and in any event no later than five (5) days following receipt of an invoice) all reasonable and documented fees and out-of-pocket expenses (regardless of whether such fees and expenses were incurred before or after the Petition Date (as defined below), and in each case, in accordance with (and when due under) any applicable engagement letter or fee reimbursement letter with the Affinion Parties) of: (a) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP and one local Delaware law firm, as counsel to HPS Investment Partners, LLC (“HPS”); (b) FTI Consulting, Inc., as the financial advisor retained on behalf of HPS; (c) White & Case LLP, Xxxxxxxxx Xxxxxx Xxxxx & Xxxxx, LLP, Xxxxxxxxx & Xxxxxxxx LLP, Ropes & Xxxx LLP and one local Delaware law firm, as counsel to Xxxxxxx Associates LP, Xxxxxxx International LP, Manchester Securities Corp. and XXX Investments Limited (collectively, “Xxxxxxx”); (d) one financial advisor to Xxxxxxx, (e) Xxxxxxxxx & Xxxxxxx LLP as counsel to Metro SPV LLC (“ICG”) and Wachtell, Lipton Xxxxx & Xxxx LLP as counsel to Xxxxxxx Capital Management, L.P. (“Xxxxxxx”), in each case in respect of the Transactions (the “Restructuring Expenses”); provided, however, that any invoices shall be provided only in summary form.

(b)

In the event the Chapter 11 Cases are commenced, all such reasonable and documented Restructuring Expenses incurred and invoiced up to the Petition Date shall be paid in full prior to the Petition Date (without deducting any retainers). The Restructuring Expenses shall be paid without the requirement for the filing of retention applications, fee applications or any other applications in the Chapter 11 Cases, and without any requirement for further notice of Bankruptcy Court review or approval, but subject to any procedural requirements in the DIP/Cash Collateral Documents.

16. Consents and Acknowledgments. If the Transactions are to be effectuated through the In-Court Restructuring, each Party irrevocably acknowledges and agrees that this Agreement is not and shall not be deemed to be a solicitation for consents to the Plan. The acceptance of the Plan by each of the Consenting Stakeholders will not be solicited until such Parties have received the Offering Memorandum and Disclosure Statement and related ballots in accordance with applicable law, and will be subject to sections 1125, 1126, and 1127 of the Bankruptcy Code. This Agreement does not constitute, and shall not be deemed to constitute, an offer for the purchase, sale, exchange, hypothecation, or other transfer of securities for purposes of the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the “Securities Act”) and the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”) (or any other federal, state, or provincial law or regulation).

17. Representations and Warranties.

(a)

Each Consenting Stakeholder hereby represents and warrants on a several and not joint basis, for itself and not any other person or entity, that the following statements are true, correct, and complete as of the date hereof:

(i)

it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

(ii)

this Agreement has been duly executed and delivered by such Consenting Stakeholder, and this Agreement is the legal, valid, and binding obligation of such Consenting Stakeholder, enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally;

(iii)

it is not a party to any contracts or other agreements that would conflict with, restrict, or prohibit its ability to fulfill its obligations under this Agreement;

(iv)

it acknowledges that it has had the opportunity to speak with a representative of the Affinion Parties and to obtain and review information reasonably requested by such Consenting Stakeholder from the Affinion Parties, and that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, including, without limitation, the Affinion Advisors, other than the representations and warranties of the Affinion Parties set forth in this Agreement and the Definitive Documentation, and that it has sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement, the Term Sheet and the Transactions, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement and participate in the Transactions, and it has made its own analysis and decision to enter into this Agreement and participate in the Transactions and otherwise investigated this matter to its full satisfaction;

(v)

it beneficially owns, serves as nominee, investment manager, or advisor for beneficial holders of, or otherwise has the power to control or has investment authority over the aggregate principal amount of the claims and interests identified across from its name on the Confidential Schedule of Holdings and in the amounts set forth therein as of the date of the Original Support Agreement, in each case, free and clear of any pledge, security interest, claim, lien, voting agreement, proxy or other encumbrance of any kind;

(vi)

it is (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or (ii) an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D under the Securities Act);

(vii)

it is an “institutional account” with the meaning of FINRA Rule 4512(c);

(viii)

it is not subject to a disqualification described in Rule 506(d) of Regulation D under the Securities Act;

(ix)

it understands that it may be required to bear the economic risk of its investment in the securities and other consideration it may receive in the Transactions indefinitely, and is able to bear such risk and the risk of a complete loss of its investment in the Affinion Parties resulting from its participation in the Transactions;

(x)

it understands that none of the securities that may be issued in any of the Transactions will be registered under the Securities Act or any state securities laws and that any such securities are being offered in reliance on specific exemptions from the registration requirements of the Securities Act and state securities law and regulations, and agrees that the Affinion Parties may rely upon the truth and accuracy of, and such Consenting Stakeholder’s compliance with, its representations, warranties, agreements, acknowledgments, and understandings set forth herein in order to determine the availability of such exemptions and the eligibility of the Consenting Stakeholder to acquire any securities as part of the Transactions. The Consenting Stakeholder understands that there is no established market for the securities and that no public market for the securities may develop. The Consenting Stakeholder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the securities or the fairness or suitability of the investment in the securities, nor have such authorities passed upon or endorsed the merits of the Transactions; and

(xi)

to the extent it acquires any securities in the Transactions, it is acquiring such securities for investment purposes only for its own account without a view to distribution thereof within the meaning of the Securities Act.

(b)

Each Affinion Party hereby represents and warrants on a joint and several basis (and not any other person or entity other than the Affinion Parties) to each of the other Parties to this Agreement that the following statements are true, correct, and complete as of the date hereof (provided that it is understood and agreed that references to “affiliates” below excludes any of the Consenting Stakeholders and their affiliates (other than the Affinion Parties)):

(i)

it has sufficient knowledge and experience to evaluate properly the terms and conditions of the this Agreement and the Term Sheet, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise investigated this matter to its full satisfaction.

(ii)

it is a corporation, limited liability company or limited company, as applicable, duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, as applicable; and it is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where failure to be so qualified or in good standing would not individually or in the aggregate have a Material Adverse Effect. “Material Adverse Effect” means a change, event, occurrence or development that, either alone or in combination, has had or would reasonably be expected to have a materially adverse effect on (a) the business, properties, operations, condition (financial or otherwise) or results of operations of the Affinion Parties taken as a whole, or (b) its ability to perform its obligations under this Agreement; except any change, event, occurrence or development arising out of, resulting from or attributable to any of the following after the date hereof: (a) a general change or development in the economy, market (including the capital, financial, credit or securities markets) or political environment, (b) a general change or development in any of the industries in which the Affinion Parties operate, (c) a change or proposed change in law or the interpretation thereof affecting such industries, (d) a change or proposed change in GAAP or the interpretation thereof, (e) the

outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war, any other acts of war (whether declared or undeclared), sabotage, military action or any escalation or worsening thereof, earthquakes or similar catastrophes, or the occurrence of any other calamity or crisis, including an act of terrorism, (f) the announcement, pendency or consummation of this Agreement and/or the Transactions, or the failure to take actions as a result of any terms or conditions set forth in this Agreement, (g) any action taken that is required by this Agreement or at the express request of the Consenting Stakeholders, (h) any failure to meet internal or published projections, forecasts, performance measures, operating statistics or revenue or earnings predictions for any period (it being understood that the underlying cause of any such failure may be taken into consideration when determining whether a Material Adverse Effect has occurred unless otherwise excluded pursuant to the terms of this definition; provided, that, with respect to the matters described in any of the foregoing clauses (a) through (e), such matter shall only be excluded in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such matter does not have a disproportionate adverse effect on the Affinion Parties, taken as a whole, relative to other comparable participants operating in the principal industries in which the Affinion Parties operate;

(iii)

it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder and have taken all necessary corporate, limited liability company or other action, as applicable, to authorize the execution, delivery, and performance of this Agreement, including approval of each of the independent directors or managers, as applicable, of each Affinion Party;

(iv)

(a) this Agreement has been duly executed and delivered by it; and (b) (1) this Agreement is the legal, valid, and binding obligation of it, enforceable against it in accordance with its terms and (2) if the Transactions are implemented pursuant to an In-Court Restructuring, subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms, in each case, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally and is in full force and effect;

(v)

neither the execution and delivery by it of this Agreement, the compliance by it with the terms and conditions hereof, nor the consummation by it or any of its affiliates of the Transactions will (a) violate, result in a breach of, or constitute a default under their respective certificates of incorporation, bylaws, certificate of formation, articles of association or limited liability company agreement, as applicable, or the respective organization documents of any of its affiliates; (b) subject to the effectiveness of the Stockholder Consent, violate, result in a breach of, or constitute (with or without notice or lapse of time, or both) a default (other than, for the avoidance of doubt, a breach or default that would be triggered as a result of the Chapter 11 Cases or any Affinion Party’s undertaking to implement the Transactions through the Chapter 11 Cases) under any contract, judgment, order, or decree to which it or any of its affiliates is a party or is otherwise bound, or give to others any rights or interests (including rights of purchase, termination, cancellation or acceleration) under any such agreement or instrument; or (c) conflict with or violate any applicable laws, statutes, rules, regulations, ordinances judgments or orders (whether federal, state, local or foreign), except in the case of clause (ii) as would not reasonably be expected to materially and adversely affect any or all of the Affinion Parties or their ability to consummate the Transactions as contemplated herein;

(vi)

Affinion Holdings has filed or furnished, as applicable, all forms, filings, registrations, submissions, statements, certifications, reports, and documents required to be filed or furnished by it with the U.S. Securities and Exchange Commission (the “SEC”) under the Exchange Act and the Securities Act (collectively, “SEC Filings”), since December 31, 2016 (the SEC Filings since December 31, 2016 and through the date hereof, including any amendments thereto, the “Company Reports”). As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment), each of the Company Reports, as amended, complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, and any rules and regulations promulgated thereunder applicable to the Company Reports. As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment), the Company Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading;

(vii)

Affinion Holdings’ consolidated financial statements (including, in each case, any notes thereto) contained in the Company Reports were prepared (i) in accordance with generally accepted accounting principles in the United States of America (“GAAP”) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of interim consolidated

financial statements, where information and footnotes contained in such financial statements are not required under the rules of the SEC to be in compliance with GAAP) and (ii) in compliance, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and in each case such consolidated financial statements fairly presented, in all material respects, the consolidated financial position, results of operations, changes in stockholder’s equity and cash flows of Affinion Holdings and its consolidated subsidiaries as of the respective dates thereof and for the respective periods covered thereby (subject, in the case of unaudited statements, to normal year-end adjustments);

(viii)

the issuance of the New Notes has been duly authorized by Affinion, and, upon issuance, the New Notes will be legal, valid and binding obligations of Affinion, enforceable against Affinion in accordance with their terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally;

(ix)

the issuance of the New Xxxxx Warrants and, subject to the effectiveness of the Stockholder Consent and the Merger, the Investor Warrants, Class M Common Stock and the New Common Stock (as defined in the Term Sheet) has been duly authorized by Affinion Holdings and, upon issuance, the New Xxxxx Warrants will be legal, valid and binding obligations of Affinion Holdings, enforceable against Affinion Holdings in accordance with their terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally. Subject to the effectiveness of the Stockholder Consent and the Merger, the New Common Stock issuable upon the exercise of the New Xxxxx Warrants will be, prior to issuance, duly authorized, will be validly issued, fully paid and nonassessable and will not be issued in violation of the certificate of incorporation, by-laws or other organizational documents of Affinion Holdings. The authorized, issued and outstanding share capital of each of Affinion Holdings is as set forth in the Offering Memorandum and Disclosure Statement (other than for subsequent issuances, if any, pursuant to employee benefit plans, or upon the exercise of outstanding options or warrants). None of the outstanding Company Common Stock or securities convertible into Company Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of Affinion Holdings. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or

exercisable for, any share capital of Affinion Holdings other than those described in the Offering Memorandum and Disclosure Statement or incorporated by reference therein. The descriptions of Affinion Holdings’ equity compensation plans or arrangements, and the options or other rights granted thereunder, set forth in the Offering Memorandum and Disclosure Statement or incorporated by reference therein accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights;

(x)

on or prior to the consummation of the Exchange Offer, any guarantee made by it relating to the issuance of the New Notes will be duly authorized by it or such affiliate and, upon issuance of the New Notes, the guarantee shall be a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and is in full force and effect;

(xi)

assuming the truth and accuracy of the representations of each Consenting Stakeholder set forth in Section 17(a), it is not necessary, in connection with the issuance of the New Notes, New Xxxxx Warrants, Investor Warrants or New Common Stock to the Consenting Stakeholder, to register the New Notes, New Xxxxx Warrants, Investor Warrants, Class M Common Stock or New Common Stock under the Securities Act;

(xii)

Affinion has prepared and delivered to each Consenting Stakeholder copies of the definitive Offering Memorandum and Disclosure Statement related to the Exchange Offer;

(xiii)

upon the closing of the issuance of the New Notes, the New Indenture governing the New Notes shall be a legal, valid and binding obligation of each of the Affinion Parties and any affiliate thereof that acts as a guarantor of the New Notes, enforceable against such parties in accordance with their terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally;

(xiv)

except as would not have, individually or in the aggregate, a Material Adverse Effect or as disclosed in the Offering Memorandum and Disclosure Statement, it and its affiliates have good and marketable title to all real properties and good title to all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would affect the value thereof

or interfere with the use made or to be made thereof by them; and except as would not have, individually or in the aggregate, a Material Adverse Effect or as disclosed in the Offering Memorandum and Disclosure Statement, it and its affiliates hold any leased real or personal property under valid and (assuming such leases are binding and enforceable against the other parties thereto) enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them;

(xv)

it and its affiliates possess all approvals, permits and licenses issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them except as would not have, individually or in the aggregate, a Material Adverse Effect and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to it or any of its affiliates, would individually or in the aggregate have a Material Adverse Effect;

(xvi)

no labor dispute with its or any of its affiliates’ employees exists or, to its knowledge, is imminent that would reasonably be likely to have a Material Adverse Effect;

(xvii)

it and its affiliates own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them except as would not individually or in the aggregate result in a Material Adverse Effect, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to it or its affiliates, would individually or in the aggregate have a Material Adverse Effect;

(xviii)

except as disclosed in the Offering Memorandum and Disclosure Statement or as would not reasonably be expected to have a Material Adverse Effect, to its knowledge, it and its affiliates are in compliance with, and conduct their business in conformity with, all U.S. federal, state and foreign marketing, privacy and insurance laws, rules and regulations applicable to them in connection with conducting their business as described in the Offering Memorandum and Disclosure Statement;

(xix)

except as disclosed in the Offering Memorandum and Disclosure Statement, neither it nor any of its affiliates, to its knowledge, is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any offsite disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and it is not aware of any pending investigation which would reasonably be likely to lead to such a claim;

(xx)

except as disclosed in the Offering Memorandum and Disclosure Statement, there are no pending actions, suits or proceedings against or affecting it, its affiliates or any of their respective properties that, individually or in the aggregate would reasonably be expected to have a Material Adverse Effect, or would materially and adversely affect their ability to perform their obligations hereunder, under the New Notes, New Common Stock, Investor Warrants or the New Xxxxx Warrants or which are otherwise material in the context of the issued of the New Notes, New Common Stock, Investor Warrants or the New Xxxxx Warrants; and, to its knowledge, no such actions, suits or proceedings are threatened;

(xxi)

it maintains a system of accounting controls sufficient to provide reasonable assurances that: (a) transactions are executed in accordance with management’s general or specific authorization; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles, as applied in the United States, and to maintain accountability for assets; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences;

(xxii)

except as disclosed in the Offering Memorandum and Disclosure Statement, since the date of the latest financial statements included in the latest Company Report: (i) there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of Affinion and its subsidiaries taken as a whole, and, (ii) except as disclosed in or contemplated by the Offering Memorandum and Disclosure Statement, since December 31, 2017 there has been no dividend or distribution of any kind declared, paid or made by Affinion on any class of its capital stock;

(xxiii)

except as disclosed in writing in Schedule 2 annexed hereto, it has no knowledge of any Default or Event of Default (each as defined in the Credit Agreement or the Existing Notes Indenture, as applicable) under the Credit Agreement or the Existing Notes Indenture which has occurred and is continuing.

(xxiv)

except as would not have, individually or in the aggregate, a Material Adverse Effect or as otherwise disclosed in the Offering Memorandum and Disclosure Statement, it and its affiliates are insured by nationally recognized insurers with coverage in such amounts and with such deductibles and covering such risks as are generally deemed prudent and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by it or its affiliates against theft, damage, destruction, acts of vandalism and earthquakes. It has no reason to believe that it or any of its affiliates will not be able (a) to renew its existing insurance coverage as and when such policies expire or (b) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not have a Material Adverse Effect. Neither it nor any of its affiliates has been denied and not subsequently obtained any insurance coverage that it has sought or for which it has applied;

(xxv)

neither it nor any of its affiliates nor, to its knowledge, any of its or their directors, officers, agents or employees or affiliate is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA, and it and its affiliates, have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith;

(xxvi)

its and its affiliates’ operations are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving it or any of its affiliates with respect to the Money Laundering Laws is pending or, to its knowledge, threatened; and

(xxvii)

neither it nor any of its affiliates nor, to its knowledge, any of its or their directors, officers, agents, employees or affiliates is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and it will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds, to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

18. Automatic Stay. Each of the Parties acknowledges and agrees that this Agreement is being executed in connection with negotiations concerning a possible financial restructuring of the Affinion Parties and in contemplation of possible chapter 11 filings by the Affinion Parties, and the rights granted in this Agreement, including upon a Termination Event, after the commencement of the Chapter 11 Cases may be exercised by each signatory hereto without approval of any court, including the Bankruptcy Court, and that no such exercise shall be a violation of the automatic stay provisions of section 362 of the Bankruptcy Code.

19. Settlement. This Agreement and the Transactions are part of a proposed settlement of matters that could otherwise be the subject of litigation among the Parties. Nothing herein shall be deemed an admission of any kind. This Agreement and all negotiations related thereto are subject to Federal Rule of Evidence 408 and any applicable state rules of evidence. This Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than in a proceeding to enforce the terms of this Agreement or the exhibits attached hereto (as applicable).

20. Relationship Among Parties. Notwithstanding anything herein to the contrary, the duties and obligations of the Consenting Stakeholders under this Agreement shall be several, not joint. No Party shall have any responsibility by virtue of this Agreement for any trading by any other entity, except to the extent that such other entity trades at such Party’s direction or on such Party’s behalf. No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement. The Consenting Noteholders hereby represent and warrant they have no agreement, arrangement, or understanding with respect to acting together for the purpose of acquiring, holding, voting, or disposing of any equity securities of the Affinion Parties and do not constitute a “group” within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended. No action taken by any Consenting Lender or Consenting Noteholder pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Parties that the Consenting Lenders or the Consenting Noteholders, as applicable, are in any way acting in concert or as such a “group.”

21. Specific Performance. It is understood and agreed by the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable relief (including attorneys’ fees and costs) as the sole and exclusive remedy of any such breach of this Agreement without the necessity for proving the inadequacy of money damages as a remedy, including, without limitation, an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder, and each Party hereby waives, and agrees not to raise as a defense against the granting of any such relief, the posting of any bond or other security by the party seeking specific performance and any obligation of the party seeking specific performance to demonstrate actual or potential harm.

22. Governing Law and Consent to Jurisdiction and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to such state’s choice of law provisions which would require or permit the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each Party irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter arising under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit, or proceeding shall be brought in the federal or state courts located in the Borough of Manhattan, City of New York, and by executing and delivering this Agreement, each of the Parties irrevocably accepts and submits itself to the jurisdiction of such courts, exclusive of any other forum, generally and unconditionally, with respect to any such action, suit, or proceeding. Notwithstanding the foregoing consent to New York jurisdiction, upon the commencement of any Chapter 11 Cases and until the effective date of the Plan, each Party agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. By executing and delivering this Agreement, and upon commencement of the Chapter 11 Cases, each of the Parties irrevocably and unconditionally submits to the personal jurisdiction of the Bankruptcy Court solely for purposes of any action, suit, proceeding, or other contested matter arising out of or relating to this Agreement, or for recognition or enforcement of any judgment rendered or order entered in any such action, suit, proceeding, or other contested matter.

23. WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY ACTION, PROCEEDING, COUNTERCLAIM, OR DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN ANY OF THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

24. Successors and Assigns. Except as otherwise provided in this Agreement and subject to Sections 13 and 14 of this Agreement, neither this Agreement nor any of the rights or obligations hereunder may be assigned by any Party hereto, without the prior written consent of the other Parties hereto, and then only to a person or entity that has agreed to be bound by the provisions of this Agreement. This Agreement is intended to and shall bind and inure to the benefit of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.

25. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary of this Agreement.

26. Notices. All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice in writing. Any notice of termination or breach shall be delivered to all other Parties.

(a)

If to any Affinion Party:

c/o Affinion Group Holdings, Inc.

0 Xxxx Xxxxx Xxxx

Xxxxxxxx, XX 00000

Attn: Xxxxx X. Xxxxxx, General Counsel

Phone: (000) 000-0000

Fax: (000) 000-0000

Email: xxxxxxx@xxxxxxxxxxxxx.xxx

with a copy (which shall not constitute notice) to:

Akin Gump Xxxxxxx Xxxxx & Xxxx, LLP

Xxx Xxxxxx Xxxx

Xxx Xxxx, XX 00000

Attn: Xxxxx X. Xxxxxx, Xxxxx Link Xxxxxxx & Xxxx X. Xxxxxxx

Phone: (000) 000-0000

Fax: (000) 000-0000

Email: xxxxxxx@xxxxxxxx.xxx, xxxxxxxx@xxxxxxxx.xxx, &

xxxxxxxx@xxxxxxxx.xxx

(b)

If to HPS:

HPS Investment Partners, LLC

00 Xxxx 00^xx Xxxxxx

Xxx Xxxx, XX 00000

Attention: Colbert Xxxxxx

Email: xxxxxxx.xxxxxx@xxxxxxxxxxx.xxx

with a copy (which shall not constitute notice) to:

Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP

0000 Xxxxxx xx xxx Xxxxxxxx

Xxx Xxxx, XX 00000

Attn: Xxxx X. Xxxxx and Xxxxx Xxxxxxx

Phone: (000) 000-0000

Fax: (000) 000-0000 and (000) 000-0000

Email: xxxxxx@xxxxxxxxx.xxx, xxxxxxxx@xxxxxxxxx.xxx

(c)

If to Xxxxxxx:

Xxxxxxx Management Corporation

00 Xxxx 00xx Xxxxxx, 00xx Xxxxx

Xxx Xxxx, XX 00000

Attn: Xxxxxx Xxxxxxxx and Xxx Xxxxxxx

Email: xxxxxxxxx@xxxxxxxxxxx.xxx; xxxxxxxx@xxxxxxxxxxx.xxx

with a copy (which shall not constitute notice) to:

White & Case LLP

0000 Xxxxxx xx xxx Xxxxxxxx

Xxx Xxxx, XX 00000

Attn: Xxxxxx Xxxxxxx and Xxxxxxxx Xxxxxxx

Phone: (000) 000-0000

Fax: (000) 000-0000

Email: xxxxxx.xxxxxxx@xxxxxxxxx.xxx; xxxxxxxx@xxxxxxxxx.xxx

27. Entire Agreement. This Agreement (and the exhibits and schedules attached hereto) constitutes the entire agreement of the Parties with respect to the transactions contemplated herein, and supersedes all prior negotiations, discussions, promises, representations, warranties, agreements, and understandings, whether written or oral, between or among the Parties with respect thereto; provided, however, that, for the avoidance of doubt, any confidentiality agreement executed by any Consenting Stakeholder shall survive this Agreement and shall continue to be in full force and effect in accordance with its terms; provided, further, that the Parties intend to enter into the Definitive Documentation after the date hereof to consummate the Transactions.

28. Amendments. Except as otherwise provided herein, this Agreement may not be modified, amended, amended and restated, or supplemented, and no term or provision hereof or thereof waived, without the express prior written consent of the Affinion Parties and the Required Consenting Stakeholders; provided that, (A) any amendments to the defined term “Required Consenting Lenders” shall require the written consent of the Required Consenting Lenders, (B) any amendments to the defined term “Required Consenting Noteholders” shall require the written consent of the Required Consenting Noteholders, (C) any amendments to the defined term “Second Lien Lenders” shall require the written consent of each of the Second Lien Lenders and (D) any amendment that would materially and adversely, directly or indirectly, affect a Consenting Stakeholder shall require the prior written consent of such Consenting Xxxxxxxxxxx.

00. Reservation of Rights.

(a)

Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of any Party to protect and preserve its rights, remedies, and interests, including without limitation, its claims against any of the other Parties.

(b)

Without limiting sub-clause (a) of this Section 29 in any way, if the Transactions are not consummated in the manner and on the timeline set forth in this Agreement, or if this Agreement is terminated for any reason, nothing shall be construed herein as a waiver by any Party of any or all of such Party’s rights, remedies, claims, and defenses and the Parties expressly reserve any and all of their respective rights, remedies, claims, and defenses, subject to Section 19 of this Agreement. This Agreement, the Plan (in the event the Chapter 11 Cases are commenced), and any related document shall in no event be construed as or be deemed to be evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.

30. Counterparts. This Agreement may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument, and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).

31. Public Disclosure; Confidentiality.

(a)

This Agreement, as well as its terms, its existence, and the existence of the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof; provided, however, that after the public announcement by any of the Affinion Parties of the entry into this Agreement, the Parties may disclose the existence of, or the terms of, this Agreement or any other material term of the Transactions contemplated herein without the express written consent of the other Parties to such existing confidentiality agreements. The Affinion Parties shall submit drafts to legal counsel for HPS, Xxxxxxx, ICG and Xxxxxxx of any press release and public documents that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least one (1) day before making any such disclosure. The Affinion Parties, HPS, Xxxxxxx, ICG and Xxxxxxx shall (a) consult with each other before issuing any press release or otherwise making any public statement or filing with respect to the transactions contemplated by this Agreement and (b) not issue any such press release or make any such public statement or filing prior to such consultation and review and the receipt of the prior consent of the other, unless required by applicable law or regulations of any applicable stock exchange or governmental authority, in which case, the Party required to issue the press release or make the public statement or filing shall, prior to issuing such press release or making such public statement or filing, use its commercially reasonable efforts to

allow the other reasonable time to comment on such press release or public statement or filing to the extent practicable. Except as required by applicable law or otherwise permitted under the terms of any other agreement between the Affinion Parties and any Consenting Stakeholder, no Party or its advisors shall disclose to any person or entity (including, for the avoidance of doubt, any other Consenting Stakeholder), other than advisors to the Affinion Parties, the principal amount or percentage of (i) Lender Claims held by any Consenting Lender or (ii) Note Claims held by any Consenting Noteholder, or use the name of any Consenting Stakeholder or its controlled affiliates, officers, directors, managers, stockholders, members, employees, partners, representatives and agents in any press release, in each case, without the prior written consent of such Consenting Stakeholder; provided that (i) if such disclosure is required by law, subpoena, or other legal process or regulation, the disclosing Party shall afford the relevant Consenting Noteholder a reasonable opportunity to review and comment in advance of such disclosure and shall take all reasonable measures to limit such disclosure, (ii) the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Lender Claims or Note Claims held by all Consenting Lenders and Consenting Noteholders, respectively, and (iii) any Party may disclose information requested by a regulatory authority with jurisdiction over its operations to such authority without limitation or notice to any Party or other person or entity. Notwithstanding the provisions in this Section 31, any Party may disclose to the extent consented to in writing by a Consenting Stakeholder such Consenting Stakeholder’s individual holdings. Any public filing of this Agreement, with the Bankruptcy Court or otherwise, which includes executed signature pages to this Agreement shall include such signature pages only in redacted form with respect to the holdings of each Consenting Stakeholder (provided that the holdings disclosed in such signature pages may be filed in unredacted form with the Bankruptcy Court under seal).

(b)

Notwithstanding anything herein to the contrary, the Affinion Parties shall be permitted to make such public disclosures with the SEC as the Affinion Parties, based on the advice of outside counsel, deem necessary or appropriate to satisfy their obligations to make public disclosures pursuant to the Exchange Act.

(c)

Notwithstanding anything herein to the contrary, the Parties may enter into discussions with principals, employees, agents or professionals of the Lenders and the Administrative Agent, the Second Lien Lenders, the Noteholders and the Trustee, and holders of Company Common Stock (including of Class C/D Common Stock) or Existing Warrants in furtherance and support of this Agreement and the Transactions contemplated herein; provided, however, that prior to any Consenting Stakeholder engaging in such discussions, Affinion Holdings has confirmed to such Consenting Stakeholder that the foregoing persons have entered into confidentiality agreements with, or otherwise owe a duty of trust or confidence to, Affinion Holdings.

32. Creditors’ Committee. Notwithstanding anything herein to the contrary, if any Consenting Stakeholder is appointed to, and serves on an official committee of creditors in the Chapter 11 Cases, the terms of this Agreement shall not be construed so as to limit such Consenting Stakeholder’s exercise of its fiduciary duties arising from its service on such committee; provided, however, that service as a member of a committee shall not relieve such Consenting Stakeholder of its obligations to affirmatively support the Transactions on the terms and conditions set forth in this Agreement and the Term Sheet.

33. Severability. If any portion of this Agreement, or the application of any such provision or part thereof to any person or entity or circumstance, shall be held to be invalid, unenforceable, void or voidable, or violative of applicable law, the remaining portions of this Agreement insofar as they may practicably be performed shall remain in full force and effect and binding on the Parties so long as the economic or legal substance of the Transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the Transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

34. Additional Parties. Without in any way limiting the provisions hereof, additional Lenders, Second Lien Lenders or Noteholders may elect to become Parties by executing and delivering to the other Parties a counterpart hereof. Such additional Parties shall become Consenting Stakeholders under this Agreement in accordance with the terms of this Agreement.

35. Time Periods. If any time period or other deadline provided in this Agreement expires on a day that is not a Business Day, then such time period or other deadline, as applicable, shall be deemed extended to the next succeeding Business Day.

36. Headings. The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement.

37. Interpretation. This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof. For purposes of this Agreement, unless otherwise specified: (a) each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender; (b) all references herein to “Articles”, “Sections”, and “Exhibits” are references to Articles, Sections, and Exhibits of this Agreement; (c) the words “herein,” “hereof,” “hereunder,” and “hereto” refer to this Agreement in its entirety rather than to a particular portion of this Agreement; (d) the word “shall” will be read as an imperative; (e) the word “or” shall be read inclusively to mean “and/or,” except as context requires otherwise and (f) the word “including” shall be read inclusively to mean “including with limitation.”

38. Remedies Cumulative; No Waiver. All rights, powers, and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right, power, or remedy by such Party. The failure of any Party hereto to exercise any right, power, or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon strict compliance by any other Party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such Party of its right to exercise any such or other right, power, or remedy or to demand such strict compliance. No waiver of any Party shall be enforceable against such Party without the signed waiver of the Party against whom enforcement is being sought.

39. Right of First Offer in Respect of Existing Notes.

(a)

Subject to the terms and conditions of this Section 39, for so long as Xxxxxxx, ICG or Xxxxxxx remains a Consenting Noteholder (each, a “ROFO Owner”), such Consenting Noteholder shall have a right of first offer to purchase any Existing Notes that any other Consenting Noteholder (a “ROFO Initiator”) proposes to Transfer. No Consenting Noteholder may Transfer any Existing Notes without first complying with the terms and conditions of this Section 39; provided that this Section 39 shall not apply to a transfer by a Consenting Noteholder to one or more of its Affiliates.

(b)

Each time a ROFO Initiator proposes to Transfer any Existing Notes owned by it (the “Transfer Notes”), the ROFO Initiator shall give a written notice (the “ROFO Initiator Notice”) to each of the ROFO Owners who is not an Affiliate of the ROFO Initiator, specifying the aggregate principal amount of the Existing Notes proposed to be sold by such ROFO Initiator and the price at which such ROFO Initiator desires to sell such Existing Notes (the “Transfer Price”).

(c)

Within three (3) Business Days after the receipt of a ROFO Initiator Notice (the “ROFO Exercise Period”), each ROFO Owner wishing to exercise its right of first offer under this Section 39 shall submit a written notice to the ROFO Initiator accepting the Transfer Price and indicating any other material terms and conditions on which, such ROFO Owners are willing to purchase all (but not less than all) of the Transfer Notes (a “ROFO Exercise Notice”). A ROFO Owner’s failure to deliver a valid ROFO Exercise Notice prior to the expiration of the ROFO Exercise Period shall be deemed an election by such ROFO Owner not to exercise its rights pursuant to this Section 39. If any ROFO Owner provides a ROFO Exercise Notice within the ROFO Exercise Period, the ROFO Initiator shall Transfer of all of the Transfer Notes on commercially reasonable terms to such ROFO Owners (in proportion to the ownership percentage of each ROFO Owner).

(d)

If no ROFO Owner delivers a ROFO Exercise Notice prior to the end of the ROFO Exercise Period, then the ROFO Initiator shall have three (3) Business Days after the expiration of the ROFO Exercise Period during which to Transfer, subject to compliance with Section 13, all of the Transfer Notes to a third party purchaser (“Third Party Purchaser”) at a price greater than the Transfer Price and on terms no more favorable to such Third Party Purchaser in all material respects than those contained in the ROFO Offer. If, at the end of such three-Business-Day period, the ROFO Initiator has not completed a Transfer of the Transfer Notes to a third party purchaser, the ROFO Initiator shall no longer be permitted to Transfer the Transfer Notes to any Person without again complying with the requirements of this Section 39.

(e)

For purposes of this Section 39: (i) the term “Affiliate” means any individual, partnership, corporation, trust or other entity or association, directly or indirectly, through one (1) or more intermediaries, controlling, controlled by, or under common control with a Person; (ii) the term “control,” as used in the immediately preceding clause (i), means, with respect to a corporation or limited liability company the right to exercise, directly or indirectly, twenty percent (20%) or more of the voting rights attributable to the controlled corporation or limited liability company, and, with respect to any individual, partnership, trust, other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity; and (iii) the term “Person” means an individual, partnership, limited liability company, corporation, joint venture, trust, business trust, association, or similar entity, whether domestic or foreign, and the heirs, executors, legal representatives, successors and assigns of such entity where the context requires. With respect to any Person who is a general partner of a Person, such general partner is an Affiliate of such Person. With respect to a trust, any Affiliate shall include any Person which is a trustee or lifetime beneficiary of such trust.

40. Provision related to Xxxxxxx Xxxxx Bank USA. The Parties acknowledge and agree that, with respect to Xxxxxxx Sachs Bank USA, this Agreement shall only bind the Credit – US Bank Loan Trading Business. For the avoidance of doubt, this Agreement shall not bind any affiliates of Xxxxxxx Xxxxx Bank USA, and shall not bind the activities of any other business unit, desk or division conducted in Xxxxxxx Sachs Bank USA or in any affiliate of Xxxxxxx Xxxxx Bank USA

[Signatures and exhibits follow.]


AFFINION GROUP HOLDINGS, INC., a Delaware corporation

By:
		[NAME], [TITLE]

[SIGNATURE PAGES FOR GUARANTOR ENTITIES TO BE INSERTED]


[CONSENTING STAKEHOLDER]

By:
Name:
Title:

Address for Notices:

Schedule 1

Milestones

(a)

no later than the later of (x) four (4) Business Days after the RSA Effective Date and (y) three (3) Business Days after the receipt of the Stockholder Supermajority Vote (such later date, the “Launch Date”), the Affinion Parties shall have caused the Information Agent to mail the Offering Memorandum and Disclosure Statement to Eligible Holders; provided, however, that the Launch Date shall not be later than March 8, 2019;

(b)

no later than one (1) Business Day after the Launch Date, Affinion Holdings filed with the SEC a preliminary Information Statement on Schedule 14C;

(c)

no later than twelve (12) calendar days from the filing of the preliminary Information Statement on Schedule 14C (or the next Business Day thereafter if such 12^th calendar day is not a Business Day), Affinion Holdings shall have filed with the SEC a definitive Information Statement on Schedule 14C; provided that the foregoing milestone shall not be required to be met if the SEC has notified Affinion Holdings that it will review the preliminary Information Statement on Schedule 14C;

(d)

unless (x) the Consent Requirements or the Offering Amendment Conditions of the Agreement have been satisfied on or before the Outer Date, then no later than 11:59 p.m. prevailing Eastern Time on April 7, 2019, or (y) if the Consent Requirements have been satisfied on or before the Outer Date, but the conditions precedent contained in the Definitive Documents to the effectuate the Recapitalization have not been satisfied or waived by five (5) Business Days after the Outer Date, then no later than 11:59 p.m. prevailing Eastern Time on April 14, 2019, the Affinion Parties shall commence the Chapter 11 Cases by filing bankruptcy petitions with the Bankruptcy Court (such applicable filing date, the “Petition Date”);

(e)

if in an In-Court Restructuring:

(1) on the Petition Date, the Affinion Parties shall have filed following: (a) the Plan, (b) the disclosure statement (which shall be in the form of the Offering Memorandum and Disclosure Statement, as used herein, the “Disclosure Statement”), (c) a motion for entry of interim and final orders approving any DIP facility and authorizing the use of cash collateral (the “DIP Motion”), and (d) a motion (the “DS/Plan Scheduling Motion”) seeking, among other things, entry of an order (i) scheduling an objection deadline and combined hearing on the Disclosure Statement and Plan confirmation, (ii) approving the form and manner of notice of combined hearing and commencement, (iii) establishing procedures for objecting to the Disclosure Statement and the Plan, (iv) approving solicitation procedures and form of ballot, and (v) granting related relief (the “DS/Confirmation Hearing”);

(2) within three (3) calendar days after the Petition Date, the Bankruptcy Court shall have entered (a) an order approving the DIP Motion on an interim basis, (b) orders approving the all “first day motions” (on an interim basis to the extent necessary) and (c) an order approving the DS/Plan Scheduling Motion;

(3) within thirty (30) calendar days after the Petition Date, the Bankruptcy Court shall have (a) entered an order approving the DIP Motion on a final basis in form and substance acceptable to the Debtors and the Required Consenting Stakeholders and (b) held the DS/Confirmation Hearing and entered an order approving the Disclosure Statement and the Confirmation Order;

(4) within forty-five (45) calendar days after the Petition Date, the Affinion Parties shall consummate the transactions contemplated by the Plan.

Schedule 2

Known Defaults and Events of Default

Event of Default under Section 7.01(c) of the Credit Agreement with respect to not making the payment of interest due on February 19, 2019, for which the applicable grace period expired on February 26, 2019.

Exhibit A to the Support Agreement

Term Sheet

THIS TERM SHEET IS NOT (NOR SHALL IT BE CONSTRUED AS) AN OFFER OR A SOLICITATION OF AN OFFER WITH RESPECT TO ANY SECURITIES, NOR IS IT A SOLICITATION OF ACCEPTANCE OR REJECTION OF A CHAPTER 11 PLAN OF REORGANIZATION PURSUANT TO THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS AND, IF APPLICABLE, PROVISIONS OF THE BANKRUPTCY CODE. THIS TERM SHEET IS BEING PROVIDED IN FURTHERANCE OF SETTLEMENT DISCUSSIONS AND IS ENTITLED TO PROTECTION PURSUANT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND ANY SIMILAR FEDERAL OR STATE RULE OF EVIDENCE. THE TRANSACTIONS DESCRIBED IN THIS TERM SHEET ARE SUBJECT IN ALL RESPECTS TO, AMONG OTHER THINGS, EXECUTION AND DELIVERY OF DEFINITIVE DOCUMENTATION AND SATISFACTION OR WAIVER OF THE CONDITIONS PRECEDENT SET FORTH THEREIN. UNTIL PUBLICLY DISCLOSED, THIS TERM SHEET SHALL REMAIN STRICTLY CONFIDENTIAL AND MAY NOT BE SHARED WITH ANY OTHER PARTY OR PERSON WITHOUT THE CONSENT OF THE COMPANY AND THE REQUIRED CONSENTING STAKEHOLDERS.

AFFINION GROUP HOLDINGS, INC.

AMENDED AND RESTATED TERM SHEET

March 4, 2019

This amended and restated term sheet (as amended and restated, the “Term Sheet”) sets forth the principal terms of a restructuring transaction (the “Transaction”) with respect to the existing debt and equity of Affinion Group Holdings, Inc. (“Affinion Holdings”) and Affinion Group, Inc. (“Affinion”) and certain of their respective subsidiaries (collectively, the “Affinion Parties” or the “Company”). This Term Sheet is the “Term Sheet” referenced as Exhibit A in that certain Support Agreement, dated as of March 4, 2019 (as the same may be amended, modified or supplemented, the “Support Agreement”), by and among the Company and the Consenting Stakeholders party thereto. Capitalized terms used and not defined in this Term Sheet shall have the meaning ascribed thereto in the Support Agreement. This Term Sheet supersedes any proposed summary of the terms or conditions regarding the subject matter hereof and dated prior to the date hereof. This Term Sheet is being provided as part of a comprehensive transaction, each element of which is a consideration for the other elements and an integral aspect of the proposed Transaction.

Subject in all respects to the terms of the Support Agreement to which this Term Sheet will be attached, except that in the case of an inconsistency between this Term Sheet and the Support Agreement, the application of Section 3 of the Support Agreement shall govern, the Transaction will, if the Consent Requirements are met by the Outer Date, be consummated through a Recapitalization, or otherwise through an In-Court Restructuring pursuant to the Chapter 11 Cases filed under chapter 11 of title 11 of the United States (the “Bankruptcy Code”) in the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) by the Company and certain of its subsidiaries (each, a “Debtor” and, collectively, the “Debtors”). A Transaction consummated through a Recapitalization will include an offer to Eligible Holders (as defined below) to exchange the Existing Notes held by Eligible Holders for Class M Common Stock, par value $0.01 per share (the “Class M Common Stock”) as consideration therefor, and to solicit each tendering Noteholder’s consent to the Proposed Amendments (as defined below) with subscriptions rights to the Rights Offering (as defined below) being given as consideration therefor (collectively, the “Exchange

Offer”), in each case pursuant to the terms of the Support Agreement, and as set forth on Annex A to this Term Sheet. A Recapitalization also will include a merger pursuant to which XXXX Merger Sub, Inc., a Delaware corporation and newly formed wholly owned subsidiary of Affinion Holdings (“Merger Sub”), will merge with and into Affinion Holdings, with Affinion Holdings as the surviving entity (the “Merger”). As a result of the Merger, the existing Common Stock, par value $0.01 per share, of Affinion Holdings (the “Company Common Stock”) will be cancelled and Investor Warrants (the “Investor Warrants”) having the terms set forth in the Investor Warrant Agreement, the form of which is set forth on Annex D-1, will be issued as consideration therefor, and the Class M Common Stock issued to the participating holders of Existing Notes in the Exchange Offer will be cancelled and shares of common stock, par value $0.000001 per share, of the surviving entity (the “New Common Stock”) will be issued as consideration therefor; provided that, as further described below, to the extent necessary, xxxxx warrants to purchase New Common Stock (the “New Xxxxx Warrants”) having the terms set forth in the New Xxxxx Warrant Agreement, the form of which is set forth on Annex D-2, may be issued to Eligible Holders that participate in the Exchange Offer in lieu of New Common Stock. Irrespective of whether consummated through a Recapitalization or an In-Court Restructuring, the Transaction will include a private placement offering (the “Rights Offering”) to certain subscribing holders of Existing Notes and, in the case of the Recapitalization only, to certain holders of Company Common Stock and Existing Warrants, to purchase new notes issued by Affinion (the “New Notes”), in each case pursuant to the terms of the Support Agreement and as set forth on Annex B-1 and B-2 to this Term Sheet. Additionally, the Transaction will include (a) an amendment to the Credit Agreement (as defined in the Support Agreement) to, among other things, (i) decrease the aggregate Revolving Facility Commitments and allow for the prepayment of Term Loans (each, as defined in the Credit Agreement) at par plus accrued interest, (ii) extend each of the Revolving Facility Maturity Date and the Term Loan Maturity Date (each, as defined in the Credit Agreement), (iii) modify the interest payable thereunder and (iv) incorporate certain other modifications to reflect the Transaction and the status of Affinion after giving effect to the Transaction (the “Credit Agreement Amendment”), the form of which is as set forth on Annex C to this Term Sheet; (b) amendments to, amendments and restatements of, or the rejection and replacement of (i) the Shareholders Agreement, (ii) the Registration Rights Agreement, and (iii) the certificate of incorporation and by-laws of Affinion Holdings (the “Corporate Governance Document Amendments”), as set forth on Annex E to this Term Sheet; and (c) in the event that a Second Lien Credit Facility Funding (as defined below) has occurred, the satisfaction and discharge of the indebtedness outstanding under the Second Lien Credit Facility (as defined below) as set forth below on Annex F in this Term Sheet (the “Satisfaction and Discharge”).

NOTHING IN THIS TERM SHEET SHALL CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, A STIPULATION OR A WAIVER, AND EACH STATEMENT CONTAINED HEREIN IS MADE WITHOUT PREJUDICE, WITH A FULL RESERVATION OF ALL RIGHTS, REMEDIES, CLAIMS AND DEFENSES OF THE LENDERS, THE COMPANY, AND ANY CREDITOR PARTY. THIS TERM SHEET DOES NOT INCLUDE A DESCRIPTION OF ALL OF THE TERMS, CONDITIONS, AND OTHER PROVISIONS THAT ARE TO BE CONTAINED IN THE DEFINITIVE DOCUMENTATION, WHICH REMAIN SUBJECT TO DISCUSSION, NEGOTIATION AND EXECUTION.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING
Administrative Expenses, Tax Claims, and Other Priority Claims	All such underlying claims shall be paid in the ordinary course of business as and when they come due.	On or as soon as practicable after the later to occur of (i) the effective date of the Plan (the “*Effective Date*”) or (ii) in the ordinary course of business as and when due, each holder of an allowed administrative, priority tax or other priority claim shall be paid in full in cash, receive treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code, or such other less favorable treatment as may be agreed by the holder of such allowed claim and the Debtors or the reorganized Debtors, as applicable.

Revolving Facility	The revolving commitments under the Credit Agreement (the “*Revolver*”) shall be repaid in full at par using proceeds from the Rights Offering and available cash on hand (for the avoidance of doubt, interest, to the extent not otherwise paid, shall continue to accrue until repayment in full at the contract, non-default rate), following which availability under the Revolver shall be permanently reduced to $85.0 million. The Revolver will be provided on a super-senior basis relative to term loans held by Consenting Lenders pursuant to the payment waterfall providing that payment after an event of default will be applied first to the Revolver and, to the extent remaining outstanding, term loans held by Non-Consenting Lenders prior to being applied to term loans held by Consenting Lenders.	Holders of claims under the Revolver (the “*Revolver Claims*”) shall be repaid in full at par using proceeds from the Rights Offering and available cash on hand (for the avoidance of doubt, to the extent not otherwise paid, interest shall continue to accrue until repayment in full at the contract, non-default rate), following which availability under the Revolver shall be permanently reduced to $85.0 million. The Revolver will be provided on a super-senior basis pursuant to the payment waterfall providing that payment after an event of default will be applied first to the Revolver. Holders of Revolver Claims will be impaired and entitled to vote to accept or reject the Plan.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

Term Loan Facility	Using proceeds from the Rights Offering and available cash on hand in an aggregate amount of $148.0 million plus (y) the $5.0 million of net proceeds from the “Bridges Sale” to be released from escrow on the Effective Date, (i) the accrued and unpaid interest on the existing term loans under the Credit Agreement (the “*Existing Term Loans”) shall be paid in full (for the avoidance of doubt, interest, to the extent not otherwise paid, shall continue to accrue until repayment in full at the contract, non-default rate), and (ii) with any remaining amounts after such payment, the Existing Term Loans will be paid down on a pro rata* basis (at a price equal to the principal amount being repaid in the case of Existing Term Loans held by Consenting Lenders and at a price equal to the principal amount being repaid plus the applicable premium due under the existing Credit Agreement in the case of Existing Term Loans held by Non-Consenting Lenders; provided that, at the sole discretion of the Administrative Agent, funds equal to not more than $20.0 million otherwise distributable as set forth in clause (ii) of this sentence may be used first to satisfy outstanding Existing Term Loans held by Non-Consenting Lenders (the “*Non-Consenting Lender Option*”); provided further, that the Consenting Lenders agree that the Non-Consenting Lender Option may (but shall not be required to) be effectuated pursuant to an Auction (as defined in the Existing Credit Agreement), which, notwithstanding anything to the contrary in the Existing Credit Agreement (i) may be open only to Non-Consenting Lenders, (ii) may be subject to procedures to be agreed by the Administrative Agent and Affinion (including allowing for multiple prices at which Existing Term Loans are repurchased), and (iii) shall be conditioned solely upon closing of the Recapitalization). Any Existing Term Loans not repaid will remain outstanding under the Amended Senior Credit Agreement (as defined below).	Each holder of claims under the Existing Term Loans (the “*Term Loan Claims”) shall receive (x) (i) payment in full of the accrued and unpaid interest on the Existing Term Loans (for the avoidance of doubt, interest, to the extent not otherwise paid, shall continue to accrue until repayment in full at the contract, non-default rate), and (ii) on a pro rata* basis, a pay down (at a price equal to the principal amount thereof) using proceeds from the Rights Offering and available cash on hand in an aggregate amount of (A) $148.0 million plus (B) the $5.0 million of net proceeds from the “Bridges Sale” to be released from escrow on the Effective Date minus (C) the amount of any adequate protection interest payments made with respect to the Existing Term Loans during the Chapter 11 Cases, minus (D) the amount used to pay accrued and unpaid interest pursuant to clause (i) above on the Effective Date, and (y) term loans under the Amended Senior Credit Agreement in an amount equal to the Term Loan Claims remaining after the consummation of the par pay down. Holders of Term Loan Claims will be impaired and entitled to vote to accept or reject the Plan.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

Second Lien Facility	In the event that the second lien credit facility (the “*Second Lien Credit Facility”) as contemplated by that certain Commitment Letter, delivered to the Company by certain investors on November 14, 2018, is funded (“Second Lien Credit Facility Funding”), any amounts actually funded in cash under the Second Lien Credit Facility and all interest actually paid in kind and accrued and unpaid interest shall be required to be repaid in full in cash, which shall be funded using proceeds from the Rights Offering and available cash on hand, and the investors that have funded loans under the executed Second Lien Credit Facility (each a “Second Lien Lender” and, together, the “Second Lien Lenders”) shall receive, on a pro rata* basis the Second Lien Closing Fee (as defined below) and the Second Lien Funding Premium (as defined below), each as set forth on Annex F hereto, with the payment being in the form of New Notes.	In the event the Second Lien Credit Facility Funding has occurred (any claims under the Second Lien Credit Facility, the “*Second Lien Claims*”), any amounts actually funded in cash under the Second Lien Credit Facility and all interest actually paid in kind and accrued and unpaid interest shall be repaid in full in cash, which shall be funded using proceeds from the Rights Offering and available cash on hand and the Second Lien Lenders shall receive the Second Lien Closing Fee and the Second Lien Funding Premium, each as set forth on Annex F hereto, with such payment being in the form of New Notes. Holders of Second Lien Claims will be impaired and entitled to vote to accept or reject the Plan.

Other Secured Claims	All such underlying claims, if any, shall be paid in the ordinary course of business as and when they come due.	On the Effective Date, except to the extent that a holder of an allowed other secured claim agrees to less favorable treatment, each allowed other secured claim shall be (i) cured and reinstated pursuant to section 1124(2) of the Bankruptcy Code or (ii) receive such other treatment to render such secured claim unimpaired pursuant to section 1124(1) of the Bankruptcy Code. Holders of Other Secured Claims will be unimpaired and deemed to accept the Plan and thus not entitled to vote.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

Notes	Each Eligible Holder of Existing Notes that participates in the Exchange Offer shall receive its pro rata portion of Class M Common Stock. The Class M Common Stock will then be cancelled in the Merger and the holders of Class M Common Stock will receive as merger consideration, in the aggregate, 100.0% of the New Common Stock (subject to dilution from (i) the issuance of New Common Stock pursuant to the MIP (as defined below), (ii) the issuance of New Common Stock (or the New Xxxxx Warrants, as the case may be) pursuant to the Investor Purchase Agreement, (iii) the issuance of the New Xxxxx Warrants and the Investor Warrants, (iv) the conversion of the New Notes, if applicable, and (v) the concurrent preemptive rights offering to certain holders of the Company Common Stock as required by the Company’s existing Shareholders Agreement as a result of the Exchange Offer (the “*Preemptive Offer”)), as set forth in further detail on Annex A, hereto. Each Eligible Holder of Existing Notes that participates in the Exchange Offer shall also be permitted to subscribe to purchase New Notes in an amount up to its pro rata* portion of 96% of the principal amount of New Notes offered in the Rights Offering, as set forth in further detail on Annex B-2, hereto.	In full and final satisfaction of the Notes Claims, each holder of Note Claims shall receive its pro rata portion of 100.0% of the common stock of reorganized Affinion Holdings (subject to dilution from (i) the issuance of New Common Stock pursuant to the MIP, (ii) the issuance of New Common Stock (or the New Xxxxx Warrants, as the case may be) pursuant to the Investor Purchase Agreement, (iii) the issuance of the New Xxxxx Warrants, and (iv) the conversion of the New Notes, if applicable). Holders of Note Claims will be impaired and entitled to vote to accept or reject the Plan. Each eligible holder of Note Claims will also be permitted to subscribe to purchase New Notes in an amount up to its pro rata portion of 100.0% of the Rights Offering, as set forth in further detail on Annex B-2, hereto.

	To the extent the acquisition of Class M Common Stock or New Common Stock would result in an investor beneficially owning 19.9% or more of the outstanding amount of New Common Stock, and which investor’s acquisition of New Common Stock would require the consent of, or notice to, a governmental authority (including without limitation the U.K. Financial Conduct Authority), and such consent has not been obtained, or notice has not been given, a holder of Existing Notes will receive, as necessary, New Xxxxx Warrants, as set forth on Annex D-2, in lieu of shares of Class M Common Stock or New Common Stock (together with the New Common Stock, the “*New Equity Interests*”).	To the extent the acquisition of common stock of the reorganized Affinion Holdings would result in an investor beneficially owning 19.9% or more of the outstanding amount of common stock of reorganized Affinion Holdings, and which investor’s acquisition of the common stock of reorganized Affinion Holdings would require the consent of, or notice to, a governmental authority (including without limitation the U.K. Financial Conduct Authority), and such consent has not been obtained, or notice has not been given, a holder of Existing Notes will receive, as necessary, New Xxxxx Warrants, as set forth on Annex D-2, in lieu of shares of common stock of reorganized Affinion Holdings.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

General Unsecured Claims	Holders of allowed general unsecured claims shall be paid in the ordinary course of business.	Except to the extent that a holder of an allowed general unsecured claim agrees to a less favorable treatment of its allowed claim, in exchange for full and final satisfaction, settlement, release, and discharge of each allowed general unsecured claim, each holder of an allowed general unsecured claim shall have its claim reinstated as of the Effective Date as an obligation of the applicable reorganized Debtor and shall be satisfied in full in the ordinary course of business in accordance with the terms and conditions of the particular transaction giving rise to such allowed general unsecured claim; provided that, with respect to trade creditors, the current terms of the agreements and/or arrangements between the Debtors and such parties remain unaltered. Holders of General Unsecured Claims will be unimpaired and deemed to accept the Plan and thus not entitled to vote.

Section 510(b) Claims	Not applicable.	On the Effective Date, all claims arising under section 510(b) of the Bankruptcy Code shall be extinguished, cancelled and discharged and the holders of any section 510(b) claims shall not be entitled to, and shall not receive or retain, any property or distribution on account of such claims under the Plan. Holders of Section 510(b) Claims will be impaired and deemed to reject the Plan and thus not entitled to vote.

Company Common Stock and Existing Warrants	Certain Consenting Stakeholders have informed the Company that they desire to exercise their Existing Warrants using full physical settlement. All other Existing Warrants will be amended to be mandatorily exercised, on a cashless basis into shares of Company Common Stock immediately prior to the Merger. In accordance with the Merger, such newly issued Company Common Stock, together with the	All existing Company Common Stock, Existing Warrants, Class C/D Common Stock (as defined below) and any other equity interests of Affinion Holdings (collectively, the “*Affinion Holdings Equity Interests*”) shall be cancelled and shall not receive any distribution.


TREATMENT OF CLAIMS AND INTERESTS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

	prior existing Company Common Stock, will be cancelled in the Merger and the holders of Company Common Stock will receive Investor Warrants as merger consideration. The form of the Investor Warrants are set forth on Annex D-1, hereto. Any investor that properly submits an exercise notice prior to the mandatory exercise will be able to exercise their Existing Warrants for cash in accordance with the terms of the Existing Warrant Agreement. In addition, each holder of Existing Equity Interests will have the right to subscribe to purchase New Notes in an amount up to its pro rata portion of 4% of the principal amount of New Notes offered in the Rights Offering as set forth in further detail on Annex B-2, hereto.	Holders of Affinion Holdings Equity Interests will be impaired and deemed to reject the Plan and thus not entitled to vote.

Class C/D Common Stock	Holders of Class C Common Stock (the “*Class* *C Common Stock”), par value $0.01 per share, of Affinion Holdings, or of Class D Common Stock (the “Class* *D Common Stock” and together with the Class C Common Stock, the “Class* *C/D Common Stock*”), par value $0.01 per share, of Affinion Holdings will be cashed out as a result of the Merger, and will receive $0.01 per share as merger consideration.	See “Company Common Stock and Existing Warrants” above.

Intercompany Interests	Unchanged.	On the Effective Date, the equity interests in any Debtor (other than Affinion Holdings) shall receive no distribution in respect of their equity interests and shall be reinstated, for administrative purposes only, at the election of the Debtors. Holders of Intercompany Interests will be impaired and deemed to reject the Plan and thus not entitled to vote.


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

Financing Commitment	Certain parties to the Support Agreement have entered into the Investor Purchase Agreement to backstop 100% of the Rights Offering on the terms and conditions set forth therein.

DIP Facility	Not Applicable.	Certain first lien lenders will provide the Debtors with post-petition financing on the terms, and subject to the conditions, set forth in the DIP commitment letter attached to the Support Agreement as Exhibit E (the “*DIP Facility”). The DIP Facility shall be used to fund operations and the payment of administrative expenses in the Chapter 11 Cases. On the Effective Date, and except to the extent that the reorganized Debtors and a holder of an allowed DIP Facility claim agree to a less favorable treatment (in which event such other agreement will govern, but solely as between such holder of an allowed DIP Facility claim and the reorganized Debtors) or has been paid prior to the Effective Date, each holder of an allowed DIP Facility claim shall receive, on account of and in full and final satisfaction, settlement, release, and discharge of such claim against each of the Debtors that are obligors under the DIP Facility, its pro rata* share of cash in the amount of such allowed DIP Facility claim.

Tax Related Issues (Structuring & Otherwise)	The parties will work together in good faith and will use reasonable best efforts to structure and implement the Transaction and the transactions related thereto in a tax efficient and cost efficient manner for the reorganized Company and the Required Consenting Stakeholders. The parties intend to structure the Transaction and the transactions related thereto to avoid material cash taxes and preserve favorable tax attributes to the extent practicable and not adverse to the Lenders or the Noteholders.

Intercompany Claims	Unchanged.	On the Effective Date, intercompany claims shall be reinstated, compromised, or cancelled at the election of the Debtors or the reorganized Debtors, as applicable, with the consent of the Required Consenting Stakeholders.


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING
Corporate Governance/New Board	The existing organizational documents of the Company will be amended or amended and restated pursuant to the terms set forth on Annex E-1 and E-2.	On the Effective Date, the existing corporate governance documents will be amended and restated or terminated, as necessary, to, among other things, set forth the rights and obligations of the parties (collectively, the “*Corporate Governance Documents*”). The Corporate Governance Documents shall be consistent with this Term Sheet and the Support Agreement. The existing directors of each of the Debtors shall remain in their current capacities as directors of the applicable reorganized Debtor, until replaced or removed in accordance with the organizational documents of the applicable reorganized Debtors.

Registration Rights	The Company’s Registration Rights Agreement shall terminate as a result of there being no “Registrable Securities” outstanding following consummation of the Merger. Immediately following the Merger, Affinion Holdings and certain investors will enter into a new Registration Rights Agreement, having the terms set forth on Annex E-4.	The reorganized Company shall enter into a new registration rights agreement with any party that on or after the Effective Date holds 7% or more of the New Common Stock. The registration rights agreement shall include those terms described on Annex E-4 hereto.

Shareholders Agreement	The existing Shareholders Agreement shall terminate as a result of there being no “Stockholders” following the consummation of the Merger. Immediately following the Merger, Affinion Holdings and each of the investors participating in the Exchange Offer, the Preemptive Offer and/or the Investor Purchase Agreement shall enter into a new Stockholders Agreement, the form of which is set forth on Annex E-3, hereto.	Immediately following the Effective Date, the shareholders will enter into a new Stockholders Agreement, the form of which is set forth on Annex E-3, hereto.

Executory Contracts and Unexpired Leases	Unchanged.	In the event the Chapter 11 Cases are commenced, the Debtors intend to assume all executory contracts and unexpired leases; provided, however, that the Debtors are continuing to evaluate certain real property leases and will designate such leases for assumption or rejection at or prior to confirmation, with the consent of the Required Consenting Stakeholders.


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING
Employment Agreements / Other Compensation Programs	Unchanged other than the adoption of the MIP (as defined below).	On the Effective Date, the Debtors will assume all existing employment agreements, retention agreements, incentive plans, and compensation and severance plans.

Management Incentive Plan	The Company shall establish and adopt a new Board/management incentive plan (the “*MIP*”) with equity and non-equity awards and terms determined as set forth on Annex E-5, hereto.

Retained Causes of Action	Not applicable.	The In-Court Restructuring shall contain customary provisions regarding retention of causes of action which shall revest in the Company. The reorganized Debtors shall determine whether to pursue any and all Debtor claims. All proceeds from any recovery derived from such Debtor claims, if any, shall vest in the reorganized Debtors.

Releases, Exculpation, Injunction	The Recapitalization shall provide for customary mutual releases and other exculpatory provisions, in each case, to the fullest extent permitted by law, in favor of the Company, the Consenting Stakeholders, and the Company’s current and former direct and indirect affiliates, subsidiaries, equityholders, members, partners, professionals, principals, attorneys, accountants, investment bankers, consultants, agents, advisors, other representatives, employees, directors, and officers (including their respective equityholders, members, partners, subsidiaries, affiliates, funds, managers, managing members, officers, directors, employees, advisors, principals, attorneys, professionals, accountants, investment bankers, consultants, agents, and other representatives), in their respective capacities as such.	The Plan shall contain customary mutual releases and other exculpatory provisions, in each case, to the fullest extent permitted by law, in favor of the Debtors, the Consenting Stakeholders, and the holders of claims/interests that vote to accept the Plan and in the case of each of the foregoing, each such party’s current and former direct and indirect affiliates, subsidiaries, equityholders, members, partners, professionals, principals, attorneys, accountants, investment bankers, consultants, agents, advisors, other representatives, employees, directors, and officers (including their respective equityholders, members, partners, subsidiaries, affiliates, funds, managers, managing members, officers, directors, employees, advisors, principals, attorneys, professionals, accountants, investment bankers, consultants, agents, and other representatives), in their respective capacities as such (collectively, the “Released Parties”), as well as standard and customary, exculpation, discharge, and injunction provisions.


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

		The Plan shall further provide that, to the extent permitted by applicable law, all voting creditors and all creditors in classes deemed to accept or reject the Plan shall be deemed to release all Released Parties unless they elect to opt out of granting such releases. The Plan shall further provide that any Consenting Stakeholder that terminates or materially breaches the Support Agreement will not be a Released or Exculpated Party.

Consent and Consultation Rights	The Consenting Stakeholders’ consent and consultation rights over the Definitive Documents are as set forth in the Support Agreement.

Conditions to Closing	In addition to the conditions set forth in the Support Agreement and the Definitive Documentation, the effectiveness of the Recapitalization shall be subject to the satisfaction or waiver of the following customary closing conditions (except with respect to those conditions that, by their nature, are intended to be satisfied at the closing of the Recapitalization or a later date, which in each case shall be capable of being satisfied at the closing of the Recapitalization or such later date): (i) The obtaining of all necessary approvals, the tolling of all applicable waiting periods, or the filing of all applicable notices under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the competition laws of any applicable foreign jurisdictions, except to the extent the failure to obtain such approvals, give such notices or toll such waiting periods would not reasonably be expected to have a material adverse effect on the Affinion Parties;	In addition to the conditions set forth in the Support Agreement and the Definitive Documentation, the effectiveness of the In-Court Restructuring shall be subject to the satisfaction or waiver of the following customary closing conditions: (i) The obtaining of all necessary approvals, the tolling of all applicable waiting periods, or the filing of all applicable notices under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the competition laws of any applicable foreign jurisdictions, except to the extent the failure to obtain such approvals, give such notices or toll such waiting periods would not reasonably be expected to have a material adverse effect on the Affinion Parties;


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING

	(ii) unless waived by the Affinion Parties, the Required Consenting Noteholders, the Second Lien Lenders, ICG, Xxxxxxx and/or the Required Consenting Lenders, as applicable, each document or agreement constituting Definitive Documentation shall be in form and substance consistent in all material respects with this Term Sheet and the Support Agreement and be otherwise approved consistent in all material respects with the terms of section 4(b) of the Support Agreement and the Plan; (iii) unless waived by the Affinion Parties, the Required Consenting Noteholders and/or the Required Consenting Lenders, as applicable, each of the schedules, documents, supplements, and exhibits to the Plan and the Offering Memorandum and Disclosure Statement (except to the extent expressly excluded pursuant to the terms of Section 4(b)(i) or 4(b)(ii) of the Support Agreement) shall be in form and substance consistent in all material respects with this Term Sheet and the Support Agreement and such documents shall otherwise be approved consistent in all material respects with terms of section 4(b) of the Support Agreement; (iv) none of the Investor Purchase Agreement, the Support Agreement, the Forbearance or the Merger Agreement shall have been terminated or, without the consent of the Affinion Parties, Required Consenting Noteholders and/or Required Consenting Lenders, as applicable, altered, amended, supplemented or modified in any way (except as expressly permitted by the Support Agreement), and each shall remain in full force and effect as a binding obligation of the parties thereto;	(ii) unless waived by Affinion Parties, the Required Consenting Noteholders, the Second Lien Lenders, ICG, Xxxxxxx and/or the Required Consenting Lenders, as applicable, each document or agreement constituting Definitive Documentation shall be in form and substance consistent in all material respects with this Term Sheet and the Support Agreement and be otherwise approved consistent in all material respects with the terms of section 4(b) of the Support Agreement and the Plan; (iii) the Bankruptcy Court shall have entered an order confirming the Plan in form and substance consistent in all material respects with this Term Sheet and the Support Agreement and such order shall otherwise be approved consistent in all material respects with the terms of section 4(b) of the Support Agreement, and such order shall not have been stayed, modified or vacated; and (iv) unless waived by the Affinion Parties, the Required Consenting Noteholders and/or the Required Consenting Lenders, as applicable, each of the schedules, documents, supplements, and exhibits to the Plan and the Offering Memorandum and Disclosure Statement (except to the extent expressly excluded pursuant to the terms of Section 4(b)(i) or 4(b)(ii) of the Support Agreement) shall be in form and substance consistent in all material respects with this Term Sheet and the Support Agreement and such documents shall otherwise be approved consistent in all material respects with terms of section 4(b) of the Support Agreement.


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING
	(v) unless waived by the Affinion Parties and the Required Consenting Stakeholders, the Consent Requirements shall have been satisfied on or prior to the Outer Date; (vi) each of the Definitive Documents shall have been, to the extent applicable, executed and delivered by each of the parties thereto, and shall be in full force and effect as a binding obligation of the parties thereto; (vii) the Rights Offering shall have been consummated; (viii) the Merger shall have been consummated in accordance with the terms of the Merger Agreement; (ix) the preemptive offer resulting from the proposed issuance of equity securities of Affinion Holdings as contemplated by the Recapitalization shall have been consummated or, with the consent of the Required Consenting Noteholders, Affinion Holdings shall have elected to utilize the “accelerated issuances” provision of the Shareholders Agreement to perform the preemptive offer promptly following the closing;


OTHER TERMS
	RECAPITALIZATION	IN-COURT RESTRUCTURING
	(x) unless waived by the Affinion Parties and the Required Consenting Lenders, each of the investors party to the Investor Purchase Agreement stand ready, willing and able to subscribe for, collectively, the full amount of the unsubscribed for New Notes from the Rights Offering;

Business Day	“*Business Day*” means any day other than (i) any Saturday or Sunday or (ii) any other day on which banks located in New York, New York or Stamford, Connecticut are required or authorized by law to be closed for business.

Annex A

Summary Description of Exchange Offer


Exchange Offer		Affinion Group Holdings, Inc. (“*Affinion Holdings” or the “Offeror”) intends to conduct the Exchange Offer, pursuant to which Affinion Holdings will offer, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the “Securities Act”), provided by Section 4(a)(2) thereof, to all eligible holders of the Existing Notes (as defined below) (the “Noteholders”), to exchange Affinion Holdings’ Senior Cash 12.5%/PIK Step-Up to 15.5% Notes due 2022 (the “Existing Notes”) and consent to the Proposed Amendments (as defined below) for the consideration described below. The Exchange Offer is being made, and the Exchange Consideration (as defined below) is being offered, and issued only (a) in the United States, to holders of Existing Notes who are (i)(x) “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) or (y) institutional “accredited investors” within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act and (ii) “institutional accounts” within the meaning of Rule 4512 of the Financial Industry Regulatory Authority and (b) outside the United States, to holders of Existing Notes who are not “U.S. persons” (as defined in Rule 902 under the Securities Act) in reliance on Regulation S of the Securities Act. The holders of Existing Notes who are eligible to participate in the Exchange Offer pursuant to at least one of the foregoing conditions are referred to herein as “Eligible Holders*.”

The Consent Solicitation		Affinion Holdings is soliciting consents from the Noteholders for proposed amendments to the Existing Notes Indenture governing the Existing Notes to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing Notes Indenture (the “*Proposed Amendments”). If the requisite consents are obtained and the Consent Solicitation is consummated, the Proposed Amendments will be effected through the execution of a supplemental indenture to the Existing Notes Indenture (the “Supplemental Indenture*”). By tendering its Existing Notes, an Eligible Holder will be deemed to have delivered consents to the Proposed Amendments with respect to its Existing Notes being tendered. Eligible Holders may not deliver consents without tendering the related Existing Notes and Eligible Holders may not tender Existing Notes without delivering the related consents.

A-1



Exchange Consideration		For each $1,000 principal amount of the Existing Notes tendered in the Exchange Offer on or prior to the Expiration Time, Eligible Holders will receive [14.672467] shares of Class M Common Stock, which will, by operation of the Merger, be cancelled and the holders thereof shall receive, as consideration therefor, [1] shares of New Common Stock, which shall constitute 100% of the issued and outstanding New Common Stock, subject to dilution from (i) the issuance of New Common Stock pursuant to the MIP, (ii) the issuance of New Common Stock (or the New Xxxxx Warrants, as the case may be) pursuant to the Investor Purchase Agreement, (iii) the issuance of the New Xxxxx Warrants and the Investor Warrants, (iv) the conversion of the New Notes, if applicable, and (v) the Preemptive Offer (the “*Exchange Consideration”). For each $1,000 principal amount of the Existing Notes tendered in the Exchange Offer on or prior to the Consent Time, each Eligible Holder will receive rights to subscribe to purchase its pro rata* portion of 96% of the principal amount of the New Notes being offered pursuant to the terms of the Rights Offering (the “*Consent Consideration”, and together with the Exchange Consideration, the “Total Consideration*”). The terms of the New Notes are set forth on Annex B-1. The New Notes will not be registered under the Securities Act and holders of the New Notes will not be able to offer or sell such New Notes except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act and subject to the additional transfer restrictions set forth on Annex B-1.

Waiver of Preemptive Rights		By participating in the Exchange Offer, any Eligible Holder shall be deemed to have acknowledged and agreed that such Eligible Holder waives its preemptive rights, to the extent such Eligible Holder has preemptive rights, as set forth in the Shareholders Agreement with respect to all Company Common Stock and New Xxxxx Warrants to be issued (i) in the Exchange Offer, (ii) pursuant to the Investor Purchase Agreement, and (iii) upon the conversion of the New Notes, if applicable.

Withdrawal Rights		Validly tendered Existing Notes may be withdrawn (and the related consents pursuant to the Consent Solicitation therefore revoked) at any time at or prior to the tenth Business Day following the commencement of the Exchange Offer (the “*Consent Time*”), subject to applicable law.

X-0

Xxxxx X-0

Description of New Notes

[See attached]

Annex B-1

Final Form

DESCRIPTION OF THE NEW NOTES

General

Capitalized terms used in this “Description of the New Notes” section and not otherwise defined have the meanings set forth in the section “—Certain Definitions.” As used in this “Description of the New Notes” section, the “Company” means Affinion Group, Inc. and not any of its Subsidiaries.

Pursuant to the terms of the Rights Offering, the Investor Purchase Agreement and the Equity Rights Offering (solely if the Recapitalization is consummated), the Company will initially issue $345,000,000 in aggregate principal amount of 18% Senior PIK New Notes due 2024 (the “New Notes”) under an indenture (the “Indenture”), to be dated as of the Issue Date, among the Company, the Guarantors and Wilmington Trust, National Association, as trustee (the “Trustee”). Copies of the Indenture may be obtained from the Company upon request. See “Where You Can Find More Information.”

The following summary of certain provisions of the Indenture and the New Notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms of the Trust Indenture Act of 1939, as amended (the “TIA”) that are expressly incorporated by reference therein. The Indenture will not be qualified under the TIA.

We may issue additional New Notes (the “Additional New Notes”) from time to time after this offering without notice or the consent of holders of New Notes. Any issuance of Additional New Notes is subject to the covenant described below under the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.” The New Notes and any Additional New Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of the New Notes,” references to the New Notes include any Additional New Notes actually issued.

Principal of, premium, if any, and interest on the New Notes will be payable, and the New Notes may be exchanged or transferred, at the office or agency of the Company as specified in the Indenture (which initially shall be the principal corporate trust office of the Trustee). On each interest payment date, the Company shall pay scheduled payments of interest on the New Notes entirely by increasing the principal amount of the outstanding New Notes in the amount of interest paid (a “PIK Payment”). Upon such PIK Payment, the registrar will increase the outstanding principal amount of the New Notes as shown in the registrar’s definitive register of holders of New Notes (the “Register”) in the amount of such PIK Payment. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of the New Notes,” references to the “principal amount” of the New Notes includes any increase in the principal amount of the outstanding New Notes as a result of a PIK Payment. On the Closing Date, the Trustee shall act as the registrar.

The New Notes will be issued only in fully registered uncertificated form, without coupons, in minimum denominations of $1.00 and any integral multiple of $1.00. No service charge will be made for any registration of transfer or exchange of New Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. The New Notes will not be made eligible for trading through the facilities of The Depository Trust Company. At the Company’s option and in its sole discretion, the Company may notify the Trustee that it elects to cause the issuance of certificated notes.

Terms of the New Notes

The New Notes will be:

•

general unsecured obligations of the Company and will not be entitled to the benefit of any mandatory sinking fund;

•

effectively subordinated in right of payment to all existing and future secured Indebtedness of the Company, including the Indebtedness of the Company under the Credit Agreement to the extent of the assets securing such Indebtedness;

•

pari passu in right of payment with all existing and future senior Indebtedness of the Company, including Indebtedness of the Company under the Credit Agreement;

•

senior in right of payment to all existing and future subordinated Indebtedness of the Company; and

•

subject to the Payment Subordination Provisions (as defined below), guaranteed on a senior unsecured basis by the Guarantors as described under “—Guarantees.”

After giving pro forma effect to the Transactions (assuming all Existing Notes and are validly tendered for exchange at or prior to the Consent Time, and further assuming the Pre-Emptive Rights Offer is 0% subscribed), as of December 31, 2018, the Company and the Initial Guarantors (as defined under “—Guarantees”) would have had $[•] million of Indebtedness (including the New Notes), $[•] million of which would have been secured Indebtedness, and the Company’s Subsidiaries that are not guaranteeing the New Notes would have had $[•] million of indebtedness and other liabilities (including trade payables but excluding unsecured intercompany borrowings).

As of the date of the Indenture, all of the Company’s subsidiaries will be “Restricted Subsidiaries.” Under certain circumstances, the Company will be permitted to designate certain of its other subsidiaries as “Unrestricted Subsidiaries.” Any Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture and will not guarantee the New Notes.

The New Notes will mature on the date that is five years and six months from the Issue Date, at their principal amount, plus accrued and unpaid interest to, but not including, the maturity date. If the Consolidated Net Leverage Ratio of Affinion Holdings on the maturity date of the New Notes is greater than or equal to 8.50 to 1.00, then, in lieu of the Company making any required principal payment on the New Notes on such maturity date, the holders of a majority in aggregate principal amount of the New Notes outstanding may, with the consent of the Company, elect to convert (the “Maturity Date Conversion”) the aggregate outstanding principal amount of New Notes into new common stock, par value $0.000001, of Affinion Holdings (the “New Common Stock”) equal to a percentage of the fully diluted equity of Affinion Holdings (calculated prior to dilution from the issuance of any New Common Stock, or securities convertible into New Common Stock, in each case issued under the Management Incentive Plan), calculated by multiplying (A) 99.9999 by (B) (1) the aggregate outstanding principal amount of New Notes (calculated after giving effect to any PIK Payments) as of such date divided by (2) the aggregate principal amount of New Notes and Additional New Notes issued under the indenture (including 18% PIK interest paid semi-annually on such New Notes and Additional New Notes from the date of issuance thereof to the maturity date). Upon a Maturity Date Conversion, the indenture will be discharged and the registrar will deregister the New Notes.

Interest on the New Notes will accrue at a rate per annum of 18.00%. Interest on the New Notes will be payable semi-annually in arrears on the six- and twelve-month anniversaries of the Issue Date, commencing on the six-month anniversary of the Issue Date. The Company will make each interest payment to the holders of record of the New Notes on the fifteenth calendar day immediately preceding the related interest payment date. The New Notes will accrue interest from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date and will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest will be payable on the New Notes by increasing the principal amount of each holder’s New Notes in the Register by an amount equal to the amount of interest for the applicable interest period (rounded up to the nearest whole dollar) for such holder’s New Notes. Following an increase in the principal amount of New Notes as a result of a PIK Payment, such New Notes will bear interest on such increased principal amount from and after the interest payment date in respect of which such PIK Payment was made.

Optional Redemption

The Company may redeem the New Notes, at its option, in whole at any time or in part from time to time, upon not less than 10 nor more than 60 days’ prior notice sent electronically or mailed by first-class mail to each holder’s registered address, at a redemption price equal to 100% of the principal amount of the New Notes, plus accrued and unpaid 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).

In the case of any partial redemptions described above, selection of the New Notes for redemption will be made by the Company; provided, that no New Notes of $1.00 or less shall be redeemed in part. If any Note is to be redeemed as described above in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. Upon such redemption, the registrar will decrease the principal amount of each applicable holder’s Note in the Register to correspond with such cancellation. On and after the redemption date, interest will cease to accrue on New Notes or portions thereof called for redemption so long as the Company has deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the New Notes to be redeemed.

The Company, its Subsidiaries or any Affiliates of the Company may at any time and from time to time purchase any of our Indebtedness, including the New Notes, or Indebtedness of our Subsidiaries. Any such future purchases may be made through open market or privately negotiated transactions with third parties or our Affiliates, or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices as we, our Subsidiaries or our Affiliates may determine.

Guarantees

The New Notes will be guaranteed, jointly and severally, by Affinion Holdings and the Subsidiary Guarantors, which are each of the Company’s direct and indirect Restricted Subsidiaries (other than any Excluded Subsidiaries). On the Issue Date, each of the Company’s Restricted Subsidiaries listed on Schedule I hereto (including but not limited to the Foreign Subsidiaries listed on Schedule I hereto) will be a Subsidiary Guarantor (together with Affinion Holdings, the “Initial Guarantors”). In the twelve month period ended December 31, 2018, Subsidiaries that are not guaranteeing the New Notes (“Non-Guarantor Subsidiaries”) contributed $[•] million and $[•] million to our net revenues and EBITDA, respectively. As of December 31, 2018, the Non-Guarantor Subsidiaries would have held approximately $[•] million, or [•]%, of our total assets.

Each Guarantee:

•

will be senior in right of payment to all existing and future subordinated Indebtedness of each Guarantor;

•

will be a general unsecured obligation of each Guarantor;

•

will be effectively subordinated in right of payment to all existing and future secured Indebtedness of each Guarantor, including the guarantee of such Guarantor under the Credit Agreement to the extent of the collateral secured thereby; and

•

will be, subject to the Payment Subordination Provisions, pari passu in right of payment with all existing and future senior Indebtedness of each Guarantor, including the guarantee of such Guarantor under the Credit Agreement.

The obligations of any Foreign Subsidiary that is a Subsidiary Guarantor organized in any jurisdiction other than the United Kingdom with respect to its Guarantee will be subordinated in right of payment (as described in this paragraph, the “Payment Subordination Provisions”) to the prior payment in full in cash of all obligations under the Credit Agreement, dated as of May 10, 2017, by and among Affinion Holdings, the Company, the lenders party thereto, HPS Investment Partners, LLC, as administrative agent and collateral agent, as in effect on the Issue Date (as amended, restated, amended and restated, supplemented, refinanced, replaced or otherwise modified, the “HPS Credit Agreement”); provided that the Guarantees of such Subsidiary Guarantors shall in all respects rank (i) pari passu in right of payment with any Indebtedness of the Company or such Subsidiary Guarantor that ranks pari passu in right of payment with the HPS Credit Agreement and (ii) senior in right of payment with any Indebtedness of the Company or such Subsidiary Guarantor that ranks subordinated in right of payment with the HPS Credit Agreement.

The obligations of each Subsidiary Guarantor under its Guarantee will be limited as necessary to prevent that Guarantee from constituting a fraudulent conveyance under applicable law. In addition, the guarantees by certain foreign subsidiaries may also be limited by financial assistance, corporate purpose, capital maintenance or similar laws, regulations or defenses affecting creditor rights generally. See “Risk Factors—Risk Factors Related to Our Indebtedness Following the Transactions—Federal and state statutes allow courts, under specific circumstances, to avoid notes and any future guarantees and require holders of New Notes to return payments received, and foreign laws may contain similar provisions.” As of December 31, 2018, after giving pro forma effect to the Transactions, the Initial Guarantors would have had $[•] million of Secured Indebtedness, of which $[•] million would have been guarantees of Indebtedness under the Credit Agreement.

Each Guarantee will be a continuing guarantee and, subject to the next succeeding paragraph, shall:

(1)

remain in full force and effect until payment in full of all obligations of the Company under the Indenture and the New Notes;

(2)

be binding upon each such Guarantor and its successors; and

(3)

inure to the benefit of and be enforceable by the Trustee, the holders and their successors, transferees and assigns.

Notwithstanding anything to the contrary in “Amendments and Waivers,” a Guarantee of a Guarantor will be automatically released and discharged upon:

(1)

in the case of a Subsidiary Guarantor, the sale, disposition or other transfer (including through merger, amalgamation or consolidation) of the Capital Stock of such Subsidiary Guarantor, following which such Subsidiary Guarantor is no longer a Restricted Subsidiary, if such sale, disposition or other transfer is made in compliance with the Indenture, or

(2)

in the case of a Subsidiary Guarantor, the Company designating such Subsidiary Guarantor to be (x) an Unrestricted Subsidiary in accordance with the provisions set forth under “—Certain Covenants—Limitation on Restricted Payments” and the definition of “Unrestricted Subsidiary” or (y) an Identified Guarantor, or

(3)

the Company’s exercise of the legal defeasance option as described under “—Defeasance,” or if the Company’s obligations under the Indenture are discharged in accordance with the terms of the Indenture.

Certain Covenants

The Indenture will contain provisions in respect of certain covenants including, among others, those summarized below:

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. The Indenture will provide that:

(1)

the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and

(2)

the Company will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock;

provided, however, that the Company and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Subsidiary Guarantor of the Company may issue shares of Preferred Stock, in each case, based on the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued (determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period), if (i) the Company’s Fixed Charge Coverage Ratio would have been at least 1.65 to 1.00 and (ii) the Company’s Consolidated Net Leverage Ratio would not exceed 6.00 to 1.00.

The foregoing limitations will not apply to (collectively, “Permitted Debt”):

(a)

the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under any Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to the sum of (i) $50.0 million and (ii) an aggregate principal amount of the term loan and revolving loan commitments under the HPS Credit Agreement as in effect on the Issue Date (which is estimated on the date of this Offering Memorandum to be approximately $800 million); provided that such amount shall be reduced by the aggregate amount of all repayments, optional or mandatory, of the principal of any term Indebtedness and all commitment reductions with respect to any revolving credit commitments, in each case, under any such Credit Agreement that have been made since the Issue Date;

(b)

the Incurrence by the Company and the Guarantors of Indebtedness represented by (i) the New Notes to be issued on the Issue Date, (ii) the New Notes to be issued after the Issue Date pursuant to the terms of the Management Incentive Plan and (iii) any increase in the principal amount of New Notes as a result of a PIK Payment and, in each case, the Guarantees in respect thereof;

(c)

Indebtedness of the Company and its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness described in clauses (a) and (b)) after giving effect to the use of proceeds of the offering of the New Notes;

(d)

(1) Indebtedness (including Capital Lease Obligations) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (2) Acquired Indebtedness; provided, however, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (d), when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred (or deemed Incurred as provided under clause (n) below) pursuant to this clause (d), does not exceed $40 million in the aggregate;

(e)

Indebtedness Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(f)

Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the Transactions or the disposition of any business, assets or a Subsidiary of the Company, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;

(g)

Indebtedness of the Company to a Restricted Subsidiary; provided, that any such Indebtedness is subordinated in right of payment to the obligations of the Company under the New Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;

(h)

shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;

(i)

Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided, that if a Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except (x) to the Company or another Restricted Subsidiary or (y) a pledge of Indebtedness referred to in this clause (i) shall be deemed to be held by the pledgor and shall not be deemed a transfer until the pledgee commences actions to foreclose on such Indebtedness) shall be deemed, in each case, to be an Incurrence of such Indebtedness;

(j)

Hedging Obligations that are Incurred not for speculative purposes and either (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;

(k)

obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary, in each case, reasonably required in the conduct of the business (giving effect to any growth or expansion of such business), including those to secure health, safety, insurance and environmental obligations of the Company and its Restricted Subsidiaries as conducted in accordance with good and prudent business industry practice;

(l)

Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (l), does not exceed $65.0 million at any one time outstanding;

(m)

any guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Company or such Restricted Subsidiary is permitted under the terms of the Indenture; provided, that if such Indebtedness is by its express terms subordinated in right of payment to the New Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such guarantor with respect to such Indebtedness shall be subordinated in right of payment to the New Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the New Notes or the Guarantee of such Restricted Subsidiary, as applicable;

(n)

the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under the first paragraph of this covenant and clauses (b), (c), (d) and (n) of this paragraph, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(1)

has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced;

(2)

has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) at least 91 days later than the maturity date of the New Notes;

(3)

to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the New Notes, or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the New Notes or the Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;

(4)

is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;

(5)

shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

(6)

in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (d), shall be deemed to have been Incurred and to be outstanding under such clause (d), as applicable, and not this clause (n) for purposes of determining amounts outstanding under such clauses (d),

and provided, further, that subclauses (1) and (2) of this clause (n) will not apply to any refunding, refinancing or defeasance of (A) the New Notes or (B) any Secured Indebtedness;

(o)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business and in good faith; provided, that (i) such Indebtedness (other than credit or purchase cards) is extinguished within 10 Business Days of notification to the Company of its Incurrence; and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence;

(p)

Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued under the Credit Agreement pursuant to clause (a) above, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee, provided, that if the Indebtedness incurred under this clause (p) is at any time no longer supported by such letter of credit or bank guarantee, then the Indebtedness previously incurred under this clause (p) shall be classified under the preceding paragraph or under another available clause in this paragraph and if such Indebtedness may not be so reclassified, then an Event of Default under the Indenture shall be deemed to have occurred;

(q)

the Incurrence by the Company of up to $25.0 million in aggregate principal amount of Indebtedness in respect of letters of credit; provided that the Incurrence of any such Indebtedness under this clause (q) shall reduce dollar-for-dollar the amount available to be Incurred under any Credit Agreement under clause (a) of this paragraph by an amount equal to the face amount of such letters of credit (provided that for the avoidance of doubt, if any such Indebtedness under this clause (q) is repaid, cancelled or otherwise extinguished, the amount available to be Incurred under any Credit Agreement under clause (a) of this paragraph shall be increased by an amount equal to the face amount of letters of credit that are so repaid, cancelled or otherwise extinguished, and such increased amount shall be available only for revolving credit borrowings under the revolving credit facility provided under the Credit Agreement or any replacement revolving facility thereof by the Company and the Guarantors);

(r)

Indebtedness consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(s)

up to $10.0 million in aggregate principal amount of Indebtedness of Foreign Subsidiaries that are not Subsidiary Guarantors at any time outstanding;

(t)

Indebtedness consisting of earn-outs and obligations of the Company or any Restricted Subsidiary under deferred compensation or other similar arrangements Incurred by such person in connection with Permitted Business Acquisitions or any other Investment permitted under the Indenture;

(u)

Indebtedness consisting of an unsecured corporate purchase card program in the ordinary course of business in an aggregate amount at any time outstanding pursuant to this clause (u) not in excess of $60.0 million; and

(v)

Indebtedness by the Company or any of its Restricted Subsidiaries incurred under lines of credit or overdraft facilities extended by one or more financial institutions, in each case, established for the Company’s or such Restricted Subsidiaries’ ordinary course of operations (such Indebtedness, the “Overdraft Line”), (it being understood, however, that for a period of 90 consecutive days during each fiscal year of the Company the outstanding principal amount of Indebtedness under the Overdraft Line shall not exceed $20.0 million).

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (a) through (v) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this covenant and such item of Indebtedness, Disqualified Stock or Preferred Stock will be treated as having been Incurred pursuant to one or more of such clauses or pursuant to the first paragraph hereof. Notwithstanding the foregoing, Indebtedness under the Credit Agreement outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause (a) above and the Company shall not be permitted to reclassify all or any portion of such Indebtedness outstanding on the Issue Date. Accrual of interest, the accretion of accreted value, amortization or original issue discount, the payment of interest in the form of additional Indebtedness with the same terms (including any PIK Payment), the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided, that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

Limitation on Restricted Payments. The Indenture will provide that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests, including any payment with respect to such Equity Interests made in connection with any merger, amalgamation or consolidation involving the Company (other than (A) dividends or distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or (B) dividends or distributions by a Restricted Subsidiary on its common Equity Interests so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(2)

purchase or otherwise acquire or retire for value any Equity Interests of the Company or any Parent of the Company, including in connection with any merger, amalgamation or consolidation;

(3)

make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Company or any Restricted Subsidiary (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (g) and (i) of the second paragraph of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”); or

(4)

make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(a)

no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(b)

immediately after giving effect to such transaction on a pro forma basis as if the Restricted Payment had been made (and including any other Restricted Payments made during the interest period in which such Restricted Payment is anticipated to be made) and any Indebtedness Incurred on such date had been Incurred, the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph of the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(c)

such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (4), (6), (7) and (14) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum, without duplication, of:

(A)

50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the Issue Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

(B)

100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Company after the Issue Date from the issue or sale of Equity Interests of the Company or any Parent of the Company (excluding (without duplication) Refunding Capital Stock and Disqualified Stock) including Equity Interests (other than Refunding Capital Stock or Disqualified Stock) issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries), plus

(C)

100% of the aggregate amount of contributions to the capital of the Company received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash after the Issue Date (other than Refunding Capital Stock, Disqualified Stock and contributions by a Restricted Subsidiary), plus

(D)

100% of the aggregate amount received by the Company or any Restricted Subsidiary after the Issue Date in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Company or any Restricted Subsidiary after the Issue Date from:

(i)

the sale or other disposition (other than to the Company or a Restricted Subsidiary of the Company) of Restricted Investments made by the Company and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Company and its Restricted Subsidiaries by any Person (other than the Company or any of its Restricted Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (7) of the second paragraph of the covenant described under “—Limitation on Restricted Payments”),

(ii)

the sale (other than to the Company or a Restricted Subsidiary of the Company) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (7) of the second paragraph of “—Limitation on Restricted Payments” or to the extent such Investment constituted a Permitted Investment), or

(iii)

a distribution, dividend or other payment from an Unrestricted Subsidiary, plus

(E)

in the event any Unrestricted Subsidiary of the Company has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company after the Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investments of the Company in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) of the second paragraph of the covenant described under “—Limitation on Restricted Payments” or constituted a Permitted Investment).

The Fair Market Value of property other than cash covered by clauses (B), (C), (D) and (E) above shall be determined in good faith by the Board of Directors of the Company and

(1)

in the event of property with a Fair Market Value in excess of $10.0 million, shall be set forth in an Officers’ Certificate or

(2)

in the event of property with a Fair Market Value in excess of $25.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Company.

The foregoing provisions will not prohibit:

(1)

the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of the Indenture;


(2)	(a)	the repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) of the Company, any Parent of the Company or Subordinated Indebtedness of the Company, any Parent of the Company or any Subsidiary Guarantor, in exchange for, or out of the proceeds of, the substantially concurrent sale (other than the sale of any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Subsidiaries) of Equity Interests of the Company or any Parent of the Company or contributions to the equity capital of the Company (collectively, including any such contributions, “Refunding Capital Stock”), and

	(b)	the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Subsidiaries) of Refunding Capital Stock;

(3)

the redemption, repayment, repurchase or other acquisition or retirement of Subordinated Indebtedness of the Company or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the holders of such Subordinated Indebtedness) of, new Indebtedness of the Company or any Subsidiary Guarantor which is Incurred in accordance with the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” so long as

(a)

the principal amount of such new Indebtedness does not exceed the principal amount of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired plus any fees incurred in connection therewith),

(b)

such Indebtedness is Incurred by the Company or by a Subsidiary Guarantor in respect of refinanced Indebtedness of a Subsidiary Guarantor and, in each case, is subordinated to the New Notes, or the related Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired for value,

(c)

such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) at least 91 days later than the maturity date of the New Notes, and

(d)

such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired;

(4)

the repurchase, retirement or other acquisition for value (or dividends to any Parent of the Company to finance any such repurchase, retirement or other acquisition for value) of Equity Interests of the Company or any Parent of the Company held by any future, present or former employee, director or consultant of the Company, any Parent of the Company or any Subsidiary of the Company pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (4) do not exceed $1.25 million in any calendar year commencing with 2019; provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(a)

the cash proceeds received by the Company or any of its Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Company after the Issue Date to members of management, directors or consultants of the Company, any Parent of the Company and Restricted Subsidiaries of the Company (provided, that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend will not increase the amount available for Restricted Payments under clause (c) of the immediately preceding paragraph); plus

(b)

the cash proceeds of key man life insurance policies received by the Company, any Parent of the Company (to the extent contributed to the Company) or the Restricted Subsidiaries of the Company after the Issue Date; less

(c)

the amount of any Restricted Payments previously made pursuant to subclauses (a) and (b) of this second proviso of clause (4);

(5)

the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries issued or incurred after the Issue Date in accordance with the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;”

(6)

the payment of dividends on the Company’s common Capital Stock (or the payment of dividends to any Parent of the Company to fund the payment by such Parent of the Company of dividends on such entity’s common Capital Stock) of up to 6.0% per annum of the net cash proceeds received by or contributed to the Company from any public offering of common Capital Stock consummated after the Issue Date, other than public offerings with respect to common Capital Stock of the Company or any Parent of the Company registered on Form S-4 or Form S-8;

(7)

other Restricted Payments since the Issue Date in an aggregate amount not to exceed $2.5 million;

(8)

the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary of the Company by, Unrestricted Subsidiaries (other than to the extent such Investments were made pursuant to clause (9) of the definition of Permitted Investments);

(9)

(a) with respect to each tax year or portion thereof that any direct or indirect parent of the Company qualifies as a Flow Through Entity, the distribution by the Company to the holders of Capital Stock of such direct or indirect parent of the Company of an amount equal to the product of the amount of aggregate net taxable income of the Company allocated by the Company to the holders of Capital Stock of the Company for such period and the Presumed Tax Rate for such period; and (b) with respect to any tax year or portion thereof that any direct or indirect parent of the Company does not qualify as a Flow Through Entity, payment of dividends or other distributions to any direct or indirect parent of the Company that files a consolidated U.S. federal tax return that includes the Company and its subsidiaries in an amount not to exceed the amount that the Company and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes, as the case may be, in respect of such year if the Company and its Restricted Subsidiaries had paid such taxes directly as a stand-alone taxpayer or stand-alone group;

(10)

the declaration and payment of dividends to, or the making of loans to, any Parent of the Company in amounts required for such entity to pay general corporate overhead expenses (including salaries, bonuses, benefits paid to management and employees of any Parent, expenses related to any equity or debt offering, including pre-emptive rights offerings, of such Parent (whether or not successful), if applicable, expenses incurred in connection with such Parent’s obligations as a public company, including SEC expenses and stock exchange or OTC listing expenses and legal, accounting and other professional and administrative expenses) for any direct or indirect parent entity of the Company to the extent such expenses are (a) attributable to the ownership or operation of the Company and its Restricted Subsidiaries or (b) expenses required to be incurred by any Parent of the Company in connection with the performance of its obligations under any debt agreement, shareholders’ agreement, registration rights agreement, investor rights agreement, warrant agreement or similar agreements, whether in existence on or after the Issue Date, to the extent such obligations arise from the issuance of debt of the Company that is guaranteed by any such Parent or from the issuance of Equity Interests of any such Parent, in each case, determined in good faith by the Board of Directors;

(11)

any Restricted Payment used to fund the Transactions and the fees and expenses related thereto or made in connection with the consummation of the Transactions (including payments made pursuant to or as contemplated by the Transaction Documents, whether payable on the Issue Date or thereafter);

(12)

repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; and

(13)

payments of cash, or dividends, distributions or advances by the Company or any Restricted Subsidiary to allow any such entity to make payments of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of Capital Stock of any such Person; provided, however, that the aggregate amount of such payments, dividends, distributions or advances does not exceed $1.25 million.

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (4), (5), (6), (7) and (8), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined in good faith by senior management or the Board of Directors of the Company.

As of the Issue Date, all of the Company’s Subsidiaries will be Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if Restricted Payments or Permitted Investments in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Dividend and Other Payment Restrictions Affecting Subsidiaries. The Indenture will provide that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(a) (i)

pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;

(b)

make loans or advances to the Company or any of its Restricted Subsidiaries; or

(c)

sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries;

except in each case for such encumbrances or restrictions existing under or by reason of:

(1)

contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and other Senior Credit Documents;

(2)

the Indenture and the New Notes;

(3)

applicable law or any applicable rule, regulation or order;

(4)

any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

(5)

contracts or agreements for the sale of assets, including customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(6)

Secured Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Liens” that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7)

restrictions on cash or other deposits or net worth imposed by customers, suppliers or other vendors under contracts entered into in the ordinary course of business;

(8)

customary provisions in joint venture agreements and other similar agreements (including customary provisions in agreements relating to any Joint Venture);

(9)

purchase money obligations for property acquired and Capital Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

(10)

customary provisions contained in leases, licenses, contracts and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (c) above on the property subject to such lease;

(11)

other Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company that is Incurred subsequent to the Issue Date and permitted pursuant to the covenant described under “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” provided, that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Company’s ability to make anticipated principal or interest payments on the New Notes (as determined in good faith by senior management or the Board of Directors of the Company); and

(12)

any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (11) above; provided, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Company, no more restrictive as a whole with respect to such encumbrances and restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this covenant, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common Capital Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Company or a Restricted Subsidiary of the Company to other Indebtedness Incurred by the Company or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Transactions with Affiliates. The Indenture will provide that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $5 million, unless:

(a)

such Affiliate Transaction is on terms that are not less favorable to the Company or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(b)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20 million, the Company delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Company approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

(1)

transactions between or among the Company and/or any of its Restricted Subsidiaries;

(2)

Restricted Payments permitted by the provisions of the Indenture described above under the covenant “—Limitation on Restricted Payments” and Investments under the definition of “Permitted Investments;”

(3)

the payment of reasonable and customary fees to, and indemnity provided on behalf of officers, directors, employees or consultants of the Company, any Parent of the Company or any Restricted Subsidiary of the Company;

(4)

payments by the Company or any of its Restricted Subsidiaries made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) approved by a majority of the Board of Directors of the Company in good faith or (y) made pursuant to any agreement, or any agreement contemplated by such agreement, each as described or incorporated by reference in this Offering Memorandum;

(5)

transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;

(6)

payments or loans (or cancellation of loans) to employees or consultants that are (x) approved by a majority of the Board of Directors of the Company in good faith, (y) made in compliance with applicable law and (z) otherwise permitted under the Indenture;

(7)

any agreement as in effect as of the Issue Date as described in this Offering Memorandum;

(8)

the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, the Transaction Documents and any amendment thereto or similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (8) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the holders of the New Notes in any material respect than the original agreement as in effect on the Issue Date;

(9)

transactions to effect the Transactions and the payment of all fees and expenses related to the Transactions, as described or incorporated by reference in this Offering Memorandum;

(10)

transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture that are fair to the Company or the Restricted Subsidiaries, in the reasonable determination of the members of the Board of Directors or the senior management of the Company, or are on terms at least as favorable as would reasonably have been entered into at such time with an unaffiliated party;

(11)

if otherwise permitted under the Indenture, the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Specified Holder, the Management Group or to any director, officer, employee or consultant of the Company or any Parent of the Company;

(12)

the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Company or of a Restricted Subsidiary of the Company, as appropriate, in good faith;

(13)

the entering into of any tax sharing agreement or arrangement and any payment permitted by clause (8) of the second paragraph of the covenant described under “—Limitation on Restricted Payments;”

(14)

any contribution to the capital of the Company;

(15)

transactions between the Company or any of its Restricted Subsidiaries and any Person, a director of which is also a director of the Company or any direct or indirect parent company of the Company; provided, however, that such director abstains from voting as a director of the Company or such direct or indirect parent company, as the case may be, on any matter involving such other Person;

(16)

pledges of Equity Interests of Unrestricted Subsidiaries; and

(17)

any employment agreements entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business.

Liens. The Indenture will provide that the Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under the Indenture and the New Notes are secured on an equal and ratable basis with the obligations so secured (or, in the case of Indebtedness subordinated to the New Notes or the related Guarantees, prior or senior thereto, with the same relative priority as the New Notes will have with respect to such subordinated Indebtedness) until such time as such obligations are no longer secured by a Lien.

Reports and Other Information. The Indenture will provide that notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, from and after the Issue Date, the Company will furnish to the Trustee,

(1)

within 120 days after the end of each fiscal year, audited year-end consolidated financial statements and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a report on the annual financial statements by the Company’s independent registered public accounting firm (which, for the avoidance of doubt, will be a report solely on the annual financial statements and no assessment by management on the Company’s internal controls and procedures or any report by the Company’s independent registered public accounting firm thereon will be required to be included pursuant to this covenant); and

(2)

within 45 days after the end of each of the first three fiscal quarters of each fiscal year, unaudited quarterly financial statements and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

The Company may satisfy such reporting requirements by posting copies of such information required by the preceding paragraphs on a website (which may be nonpublic and may be maintained by the Company or a third party) to which access will be given to the Trustee, the holders, prospective investors in the New Notes (which prospective investors shall be limited to “qualified institutional buyers” within the meaning of Rule 144A of the U.S. Securities Act or non-U.S. persons (as defined in Regulation S under the U.S. Securities Act) that certify their status as such to the reasonable satisfaction of the Company).

The Indenture permits the Company to satisfy its obligations in this covenant with respect to financial information relating to the Company by furnishing financial information relating to a Parent; provided that, the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such Parent, on the one hand, and the information relating to the Company and its Restricted Subsidiaries on a standalone basis, on the other hand. For the avoidance of doubt, the consolidating information referred to in the proviso in the preceding sentence need not be audited. Notwithstanding the foregoing, the Company will be deemed to have furnished such reports and other information referred to above to the Trustee and the holders if it or such Parent has filed such reports, information or other documents with the SEC via the XXXXX filing system and such reports are publicly available (it being understood that the Company and Parent will not have any obligation to file reports with the SEC from and after the Issue Date).

Delivery of reports and other information is for informational purposes only and their respective receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s or any other Person’s compliance with any of its covenants under the Indenture, the Guarantees or the New Notes (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s or any other Person’s compliance with the covenants described herein or with respect to any reports or other documents filed under the Indenture.

Future Guarantors. The Indenture will provide that if (x) the Company acquires or creates any direct or indirect Restricted Subsidiary that is not an Excluded Subsidiary after the Issue Date (unless such Subsidiary is already a Guarantor), (y) any Excluded Subsidiary acquired or created after the Issue Date ceases to constitute an Excluded Subsidiary or (z) any existing Unrestricted Subsidiary is designated as a Restricted Subsidiary in accordance with the provisions set forth under “—Certain Covenants—Limitation on Restricted Payments” and the definition of “Unrestricted Subsidiary”, the Company shall cause such Restricted Subsidiary, at the earlier of (a) 20 Business Days after the date of such acquisition, formation, cessation or designation (provided if the administrative agent under the Credit Agreement grants an extension of time to comply with the obligation to make such Restricted Subsidiary a guarantor thereunder to a date later than 20 Business Days after the date of such acquisition, formation, cessation or designation, then such extension of time shall also be deemed granted hereunder and/or, in the case of any such Restricted Subsidiary that is a Foreign Subsidiary, such later date as may be the first practicable date because of delays caused by foreign legal requirements despite diligent efforts on the part of the Company), or (b) concurrently (to the extent reasonably practicable) with the guarantee under the Credit Agreement by such

Subsidiary, to execute and deliver to the Trustee a supplemental indenture in substantially the form attached as an exhibit to the Indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any and interest on the New Notes on a senior unsecured basis (subject to the Payment Subordination Provisions) and all other obligations under the Indenture. Each Guarantee of a Subsidiary Guarantor will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Subsidiary Guarantor without rendering the Guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Each Guarantee shall be released in accordance with the provisions of the Indenture described under “—Guarantees.”

Change of Control

Upon the occurrence of a Change of Control, each holder will have the right to require the Company to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 100% of the principal amount of the Notes thereof, in each case, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Within 60 days following any Change of Control, the Company shall send (or cause to be sent) a notice (a “Change of Control Offer”) to each holder with a copy to the Trustee stating (in addition to any information that is required by the Indenture):

(1)

that a Change of Control has occurred and that such holder has the right to require the Company to purchase such holder’s Notes at a purchase price in cash equal to 100% of the principal amount of the Notes thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date);

(2)

the circumstances and relevant facts and financial information regarding such Change of Control;

(3)

the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent); and

(4)

the instructions determined by the Company, consistent with this covenant, that a holder must follow in order to have its Notes purchased.

In addition, the Company will not be required to make a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (ii) at the time of such Change of Control, any Credit Agreement in effect at such time prohibits the Company from making such Change of Control Offer or otherwise prohibits the Company from repurchasing all Notes subject to such Change of Control Offer.

The Credit Agreement provides that certain change of control events with respect to the Company constitute an event of default under the Credit Agreement and, as of the Issue Date, prohibits the Company from repurchasing the Notes in a Change of Control Offer. Any future credit agreements or other similar agreements to which the Company becomes a party may contain similar provisions and may prohibit the Company from purchasing any Notes. In the event a Change of Control occurs at a time when the Company is prohibited by any Credit Agreement from purchasing Notes, the Company could seek the consent of its lenders, including lenders under the Credit Agreement to the purchase of Notes, or could attempt to refinance the borrowings that contain such prohibition; however, the Company is under no obligation to seek such consent or attempt to so refinance. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes under such Credit Agreement and, in such case, the Company will not be required to make a Change of Control Offer in respect of such Change of Control, and the Company’s failure to make such Change of Control Offer would not constitute an Event of Default under the Indenture.

Notice of any Change of Control Offer may be given prior to the completion thereof, and any such Change of Control Offer notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Change of Control Offer.

The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this paragraph by virtue thereof.

The Company has no present intention to engage in a transaction involving a Change of Control, although it is possible that the Company could decide to do so in the future. Subject to the limitations discussed below, the Company could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect the capital structure or credit ratings of the Company or any of its Affiliates. In addition, holders of Notes may not be entitled to require us to purchase their Notes in certain circumstances involving a significant change in the composition of our Board of Directors.

The definition of “Change of Control” includes a phrase relating to the sale, lease or transfer of “all or substantially all” the assets of the Company and its Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase “substantially all,” under New York law, which governs the Indenture, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require the Company to repurchase such Notes as a result of a sale, lease or transfer of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain.

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

The Indenture will provide that the Company may not consolidate, amalgamate or merge with or into or wind up into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1)

the Company is a surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof or the District of Columbia (the Company or such Person, as the case may be, being herein called the “Successor Company”);

(2)

the Successor Company (if other than the Company) expressly assumes all the obligations of the Company under the Indenture and the New Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3)

immediately after giving effect to such transaction no Default or Event of Default shall have occurred and be continuing;

(4)

immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either

(a)

the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” or

(b)

the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be greater than or equal to such ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(5)

each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under the Indenture and the New Notes.

(6)

if the Successor Company is not organized as a corporation after such transaction, a successor corporation which is a Subsidiary of the Successor Company and is organized or existing under the laws of the United States, any state thereof or the District of Columbia shall be co-obligor of the New Notes and shall have by supplemental indenture confirmed its obligations under the Indenture and the New Notes; and

(7)

the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

The Successor Company (if other than the Company) will succeed to, and be substituted for, the Company under the Indenture and the New Notes, and the Company will automatically be released and discharged from its obligations under the Indenture and the New Notes, but in the case of a lease of all or substantially all of its assets, the Company will not be released from the obligations to pay the principal of and interest on the New Notes. Notwithstanding the foregoing clauses (3) and (4), (a) any Restricted Subsidiary may consolidate or amalgamate with, merge into, sell, assign or transfer, lease, convey or otherwise dispose of all or part of its properties and assets to the Company or to another Restricted Subsidiary and (b) the Company may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of incorporating or organizing the Company in another state of the United States or the District of Columbia so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby (any transaction described in this sentence a “Specified Merger/Transfer Transaction”). This “—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets” will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and its Restricted Subsidiaries.

For purposes of this covenant, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

Although there is a limited body of case law interpreting the phrase “substantially all,” under New York law, which governs the Indenture, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “all or substantially all” of the property or assets of a Person.

The Indenture will further provide that subject to certain limitations in the Indenture governing release of a Guarantee upon the sale or disposition of a Restricted Subsidiary of the Company that is a Subsidiary Guarantor, each Subsidiary Guarantor will not, and the Company will not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1)

such Subsidiary Guarantor is a surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof or the District of Columbia (such Subsidiary Guarantor or such Person, as the case may be, being herein called the “Successor Guarantor”) and the Successor Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor under the Indenture and such Subsidiary Guarantor’s Guarantee pursuant to a supplemental indenture;

(2)

immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and

(3)

any Successor Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

Subject to certain limitations described in the Indenture, the Successor Guarantor will succeed to, and be substituted for, such Subsidiary Guarantor under the Indenture and such Subsidiary Guarantor’s Guarantee, and such Subsidiary Guarantor will automatically be released and discharged from its obligations under the Indenture and such Subsidiary Guarantor’s guarantee. Notwithstanding clause (2) of the foregoing paragraph, (i) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of incorporating or organizing such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States, so long as the amount of Indebtedness of the Subsidiary Guarantor is not increased thereby and (ii) a Subsidiary Guarantor may merge, amalgamate or consolidate with another Subsidiary Guarantor or the Company.

Defaults

An “Event of Default” will be defined in the Indenture as:

(1)

a default in any payment of interest on any Note when due that continues for 30 days,

(2)

a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(3)

the failure by the Company or any of its Restricted Subsidiaries to comply with the provisions described under the captions “—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets,” and “—Optional Redemption,”

(4)

the failure by the Company, Affinion Holdings or any of its Restricted Subsidiaries to comply for 30 days after notice with any of its obligations under the covenants described under “—Certain Covenants,”

(5)

the failure by the Company or any of its Restricted Subsidiaries to comply for 60 days after notice with its other agreements contained in the New Notes or the Indenture,

(6)

the failure by the Company, Affinion Holdings, any Significant Subsidiary or any group of Restricted Subsidiaries of the Company that would constitute a Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to a Restricted Subsidiary of the Company) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $16.5 million or its foreign currency equivalent (the “cross-acceleration provision”),

(7)

certain events of bankruptcy, insolvency or reorganization of the Company, Affinion Holdings, any Significant Subsidiary or any group of Restricted Subsidiaries of the Company that would constitute a Significant Subsidiary (the “bankruptcy provisions”),

(8)

failure by the Company, Affinion Holdings, any Significant Subsidiary or any group of Restricted Subsidiaries of the Company that would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $16.5 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days (the “judgment default provision”), or

(9)

any Guarantee of Affinion Holdings, a Significant Subsidiary or a group of Restricted Subsidiaries of the Company that would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any such Guarantor that qualifies or a group of such Guarantors that would qualify as a Significant Subsidiary denies or disaffirms its obligations under the Indenture or any Guarantee and such Default continues for ten days.

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clauses (4) and (5) will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the New Notes outstanding notify the Company of the default and the Company does not cure such default within the time specified in clauses (4) and (5) hereof after receipt of such notice.

If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the New Notes outstanding by notice to the Company (and to the Trustee if given by holders) may declare the principal of, premium, if any, and accrued but unpaid interest on all the New Notes to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of, premium, if any, and interest on all the New Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of the New Notes outstanding may rescind any such acceleration with respect to the New Notes and its consequences.

In the event of any Event of Default specified in clause (6) of the first paragraph above, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the New Notes, if within 20 days after such Event of Default arose the Company delivers an Officers’ Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default (and such Officers’ Certificate would attach information provided by such holders or otherwise relied upon by the Company to support the statement in the Officers’ Certificate relating to such rescission or waiver by such holders) or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the New Notes as described above be annulled, waived or rescinded upon the happening of any such events.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security against any loss, liability or expense satisfactory to the Trustee. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the New Notes unless:

(1)

such holder has previously given the Trustee notice that an Event of Default is continuing,

(2)

holders of at least 25% in principal amount of the New Notes outstanding have requested the Trustee to pursue the remedy,

(3)

such holders have offered the Trustee security or indemnity (satisfactory to the Trustee) against any loss, liability or expense,

(4)

the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and

(5)

the holders of a majority in principal amount of the outstanding New Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the holders of a majority in principal amount of the New Notes outstanding are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses, liabilities and expenses caused by taking or not taking such action.

The Indenture provides that if a Default occurs and is continuing and is actually known to the Trustee, the Trustee must send electronically or mail to each holder of the New Notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any applicable Note, the Trustee may withhold notice if and so long as the Trustee in good faith determines that withholding notice is in the interests of the noteholders. In addition, the Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Company also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events which would constitute certain Defaults, their status and what action the Company is taking or proposes to take in respect thereof.

Amendments and Waivers

Subject to certain exceptions, the Indenture may be amended with the consent of the holders of a majority in principal amount of the New Notes then outstanding and any past default or compliance with any provision may be waived with the consent of the holders of a majority in principal amount of the New Notes then outstanding. However, without the consent of each holder of an outstanding Note affected, no amendment may, among other things:

(1)

reduce the amount of New Notes whose holders must consent to an amendment,

(2)

reduce the rate of or extend the time for payment of interest on any Note,

(3)

reduce the principal of or change the Stated Maturity of any Note,

(4)

make any Note payable in money other than that stated in such Note,

(5)

impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s New Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s New Notes,

(6)

make any change in the amendment provisions which require each holder’s consent or in the waiver provisions,

(7)

expressly subordinate the New Notes or any Guarantee thereof to any other Indebtedness of the Company or any Guarantor,

(8)

modify the Guarantees in any manner adverse to the holders, or

(9)

modify the provisions set forth under “—Transfer and Exchange” below (including the definition of Permitted Transfer).

Notwithstanding the preceding, without the consent of any holder, the Company and Trustee may amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a Successor Company of the obligations of the Company under the Indenture and the New Notes, to provide for the assumption by a Successor Guarantor of the obligations of a Subsidiary Guarantor under the Indenture and its Guarantee, to provide for New Notes to be represented in uncertificated, certificated or global form (including making any

changes to the Indenture necessary to reflect such form of notes and/or the requirements of any clearing agency, such as The Depository Trust Company), to add Guarantees with respect to the New Notes, to secure the New Notes, to add to the covenants of the Company for the benefit of the holders or to surrender any right or power conferred upon the Company, to make any change that does not adversely affect the rights of any holder, to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA, to give effect to any transaction that is expressly permitted by another provision of the Indenture, to effect any provision of the Indenture or to make certain changes to the Indenture to provide for the issuance of Additional New Notes.

The consent of the noteholders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under the Indenture becomes effective, the Company is required to send or cause to be sent to the noteholders a notice briefly describing such amendment. However, the failure to give such notice to all noteholders entitled to receive such notice, or any defect therein, will not impair or affect the validity of the amendment.

The Indenture will provide that: (i) in determining whether the holders of the required principal amount of New Notes have concurred in any request, demand, authorization, notice, direction, amendment, supplement, waiver or consent, New Notes owned of record or beneficially by the Company, Affinion Holdings or any Affiliate of the Company or any other obligor of the New Notes shall be considered as though they are not outstanding (but the New Notes owned of record of beneficially owned by any Specified Holder shall be deemed outstanding for all purposes under the Indenture) and (ii) in determining whether the Trustee shall be protected in relying on any such request, demand, authorization, notice, direction, amendment, supplement, waiver or consent, only New Notes owned by the Company, Affinion Holdings, Affiliates of the Company (other than by any Specified Holder) or any other obligor on the New Notes which a Trust Officer of the Trustee knows are so owned shall be considered as though they are not outstanding.

No Personal Liability of Directors, Officers, Employees and Stockholders

The Indenture will provide that no director, officer, employee, incorporator or holder of any Equity Interests in the Company, as such, will have any liability for any obligations of the Company under the New Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of New Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the New Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Transfer and Exchange

A noteholder may transfer or exchange New Notes in accordance with the Indenture. Subject to the immediately succeeding paragraph, prior to an IPO, no holder shall be permitted to sell or otherwise transfer any of its New Notes except pursuant to a Permitted Transfer. Upon any transfer or exchange, the registrar and the Trustee may require a noteholder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a noteholder to pay any taxes required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption or to transfer or exchange any Note for a period of 15 days prior to a selection of New Notes to be redeemed. The New Notes will be issued in registered uncertificated form and the registered holder of a Note as shown in the Register will be treated as the owner of such Note for all purposes.

As used herein,

“IPO” means the first public underwritten offering of the equity securities of Affinion Holdings (or a direct or indirect parent holding company or Subsidiary) pursuant to an effective registration statement under the Securities Act (other than on Forms X-0, X-0 or successors to such forms) marketed by a nationally recognized investment bank after the closing of which such equity securities are listed on the New York Stock Exchange or NASDAQ;

“Permitted Transfer” means (A) transfers (x) with respect to a holder that is not a natural person, a transfer from a holder to its members (if such holder is a limited liability company), to its partners (if such holder is a general or limited partnership), to its shareholders (if such holder is a corporation) or by way of a distribution or to its beneficiaries (if such holder is a trust) or a transfer to an Affiliate of the transferring holder or (y) with respect to a holder that is a natural person, transfers to such holder’s legatees or heirs, following the death of such holder, and transfers to a family member or to a trust primarily for such holder’s benefit or the benefit of its family members; (B) transfers to or among Specified Holders; or (C) transfers to a third party purchaser, provided for purposes of this clause (C) that (x) unless approved by the Board of Directors of Affinion Holdings, no New Notes may be transferred to, whether directly or indirectly, a Prohibited Person, (y) no New Notes may be transferred to a third party if, as a result of such transfer, Affinion Holdings or any of its Affiliates would be required to register as a reporting company under the Exchange Act, and (z) prior to such transfer, (1) any prospective selling holder must provide notice to the Specified Holders holding at least 7.0% of the aggregate outstanding principal amount of the New Notes as of such date who is not an affiliate of such prospective selling holder (each such Specified Holder, a “ROFO Holder”) setting forth the aggregate principal amount of New Notes proposed to be sold (the “Transfer Interests”), and concurrently with such notice, such selling holder will submit to the chief legal officer of Affinion Holdings, on a confidential basis, the price at which such selling holder desires to sell such Transfer Interests (the “Offer Price”), (2) within five Business Days after such notice (the “ROFO Exercise Period”), each ROFO Holder wishing to exercise its right of first offer to purchase such New Notes will notify the chief legal officer of Affinion Holders with the price at which such ROFO Holder desires to purchase the Transfer Interest (each, a “Bid Price”), and indicating any other material terms and conditions on which, such ROFO Holder is willing to purchase all (but not less than all) of the Transfer Interests (each, a “ROFO Exercise Notice”), (3) if any ROFO Holder provides a ROFO Exercise Notice within the ROFO Exercise Period, on the Business Day immediately following the expiration of the ROFO Exercise Period, Affinion Holdings will notify the selling holder and the ROFO Holders who submitted a ROFO Exercise Notice of the Transfer Price (as defined below), and (4) if (I) there is an Accepted Offer Event (as defined below), the selling holder will transfer all of the Transfer Interests at the Transfer Price on commercially reasonable terms negotiated in good faith to the ROFO Holders who submitted the Transfer Price (and any ROFO Holder who submitted an Offer Price will have the right, but not the obligation, to participate in such transfer in connection with an Accepted Offer Event at the Transfer Price in proportion to their and their Affiliates ownership percentage of the aggregate principal amount of the Notes), (II) there is a Rejected Offer Event (as defined below), then the selling holder will have 90 days after the ROFO Exercise Period during which to transfer, subject to clauses (A) and (B) above, all of the Transfer Interest to a third party purchaser (which may include any other holder of New Notes or any stockholder of Affinion Holdings) at a price equal to or greater than the Transfer Price and on terms no more favorable to such third party purchaser in all material respects than those contained in the ROFO Exercise Notice, (III) no ROFO Holder delivers a ROFO Exercise Notice prior to the end of the ROFO Election Period, then the selling holder will have 90 days after the ROFO Exercise Period during which to transfer, subject to clauses (A) and (B) above, all of the Transfer Interest to a third party purchaser (which transfer, for the avoidance of doubt, may be for price greater than, equal to or less than the Offer Price), provided further that if after 90 days following the ROFO Election Period, such selling holder has not completed a transfer of the Transfer Interests to a third party purchaser, such selling holder will no longer be permitted to transfer the Transfer Interests to any Person without again complying with the requirements of this clause (z);

“Prohibited Person” means (A) any Person appearing on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control in the United States Department of the Treasury; (B) any other Person with whom a transaction is prohibited by Executive Order 13224, the USA PATRIOT Act, the Trading with the Enemy Act or the foreign asset control regulations of the United States Treasury Department, in each case as amended from time to time; (C) any other Person whom the Board of Directors of Affinion Holdings (acting reasonably and in good faith and the determination of which includes the independent director thereof) considers would create a material reputational risk for Affinion Holdings or the Company; (D) any other Person (x) who competes with Affinion Holdings or any of its Subsidiaries as determined by the Board of Directors of Affinion Holdings (which shall include the approval of the independent director thereof) or (y) who is known by the Board of Directors of Affinion Holdings to directly or indirectly own (other than as a passive investor) more than 10.0% of the equity securities of a Person described in the foregoing clause (x) or (E) any Person (or an Affiliate thereof) who holds Existing Notes after the consummation of the Exchange Offer and Rights Offering; and

“Transfer Price” means an amount determined as follows: (i) in the event only one Bid Price was submitted by one or more ROFO Holders and it exceeds the Offer Price, then the Transfer Price shall be an amount equal to the average of the Bid Price and the Offer Price; (ii) in the event multiple Bid Prices were submitted and at least one exceeds the Offer Price, then the Transfer Price shall be an amount equal to the average of the highest Bid Price and the Offer Price; (iii) if only one Bid Price is submitted by one or more ROFO Holders and such Bid Price equals the Offer Price, then the Transfer Price shall be an amount equal to the Offer Price (this or the foregoing circumstances described in clauses (i) and (ii), an “Accepted Offer Event”); (iv) in the event only one Bid Price was submitted and the Offer Price exceeds it, then the Transfer Price shall be an amount equal to the average of the Bid Price and the Offer Price; and (v) in the event multiple Bid Prices were submitted and the Offer Price exceeds the highest Bid Price submitted, then the Transfer Price shall be an amount equal to the average of the lowest Bid Price and the Offer Price (this or the foregoing circumstances described in clause (iv), a “Rejected Offer Event”).

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration or transfer or exchange of the New Notes, as expressly provided for in the Indenture) as to all outstanding New Notes when:

(1)

either (a) all the New Notes registered on the Register have been deregistered or (b) all of the New Notes under the Indenture (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) if redeemable at the option of the Company, have been called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the New Notes not theretofore deregistered, for principal of, premium, if any, and interest on the New Notes to the date of deposit together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(2)

the Company has and/or the Guarantors have paid all other sums payable under the Indenture; and

(3)

the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.

Defeasance

The Indenture will provide that the Company at any time may terminate all its obligations under the New Notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the New Notes, to replace mutilated, destroyed, lost or stolen New Notes and to maintain a registrar and paying agent in respect of the New Notes. The Company at any time may terminate its obligations under certain covenants that are described in the Indenture, including the covenants described under “—Certain Covenants,” the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under “—Defaults” and the undertakings and covenants contained under “—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets” (“covenant defeasance”). If the Company exercises its legal or covenant defeasance option each Guarantor will be released from all of its obligations with respect to its Guarantee.

The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the New Notes may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the New Notes may not be accelerated because of an Event of Default specified in clause (3), (4), (5), (6), (7) (with respect only to Significant Subsidiaries), (8) or (9) under “—Defaults.”

In order to exercise either defeasance option, the Company must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the New Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the New Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and

defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable federal income tax law). Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the New Notes not theretofore deregistered (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

Concerning the Trustee

GLAS Trust Company LLC will be the Trustee under the Indenture and will be appointed by the Company as registrar and a paying agent with regard to the New Notes.

If the Trustee becomes a creditor of the Company or any Guarantor, the Indenture and the Trust Indenture Act limit its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

The Indenture will provide that in case an Event of Default will occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of New Notes, unless such Holder will have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Tax Treatment

The Company and its Affiliates, and the holders of the New Notes, shall treat the New Notes as indebtedness for U.S. federal income tax purposes, except that they shall treat the New Notes as equity if (i) there has been a “determination” within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended (the “Code”) that the New Notes are equity for U.S. federal income tax purposes, or (ii) there has been a change in the Code, the Treasury Regulations thereunder, or IRS published rulings or procedures, occurring after the Closing Date, and the Company or the holders of the New Notes shall have received advice of counsel that, as a result of such change, it is more likely than not that the New Notes are equity for U.S. federal income tax purposes.

Governing Law

The Indenture will provide that it and the New Notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

“Acquired Indebtedness” means, with respect to any specified Person:

(1)

Indebtedness of any other Person existing at the time such other Person is merged or consolidated with or into or becomes a Restricted Subsidiary of such specified Person, and

(2)

Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,

in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such Person, as applicable.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“Affinion Holdings” means Affinion Group Holdings, Inc., a Delaware corporation, and its successors.

“Agreed Guarantee Principles” means the principles set forth as an exhibit to the Indenture, in substantially the form attached as Exhibit A hereto.

“Applicable Insurance Laws and Regulations” means any laws, rules and regulations of any government or governmental authority or agency, including of any Applicable Insurance Regulatory Authority, applicable to the Insurance Business or the Insurance Subsidiaries.

“Applicable Insurance Regulatory Authority” means, when used with respect to any Insurance Subsidiary, the insurance department or similar administrative authority or agency located in (x) the state or other jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory jurisdiction over such Insurance Subsidiary, the insurance department, authority or agency in each state or other jurisdiction in which such Insurance Subsidiary is licensed, and shall include any Federal insurance regulatory department, authority or agency that may be created in the future and that asserts regulatory jurisdiction over such Insurance Subsidiary.

“Board of Directors” means as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or place of payment.

“Capital Lease” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property by such Person as lessee that are required to be accounted for as a capital lease on a balance sheet of such person prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any Capital Lease, and, for purposes hereof, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock” means:

(1)

in the case of a corporation or a company, corporate stock or shares;

(2)

in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3)

in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4)

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means:

(1)

U.S. dollars, pounds sterling, euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2)

securities issued or directly and fully guaranteed or insured by the government of the United States or any country that is a member of the European Union or any agency or instrumentality thereof, in each case with maturities not exceeding two years from the date of acquisition;

(3)

certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year, and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250 million, or the foreign currency equivalent thereof, and whose long-term debt is rated “A” or the equivalent thereof by Xxxxx’x or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4)

repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)

commercial paper issued by a corporation (other than an Affiliate of the Company) rated at least “A-1” or the equivalent thereof by Xxxxx’x or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

(6)

readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Xxxxx’x or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(7)

Indebtedness issued by Persons with a rating of “A” or higher from S&P or “A-2” or higher from Xxxxx’x (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

(8)

investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above.

“CFC” means a “controlled foreign corporation” pursuant to Section 957 of the Code.

“Change of Control” means the occurrence of one or more of the following events:

(1)

upon the sale or disposition of all or substantially of the property and assets or business of the Company and its Restricted Subsidiaries, taken as a whole (in one transaction or a series of related transactions) to any Person, other than to a Subsidiary Guarantor pursuant to a transaction expressly permitted by the Indenture; or

(2)

the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Affinion Holdings (for purposes of calculating the total voting power of the Voting Stock held by a group, the voting power beneficially owned by a Permitted Holder shall be excluded to the extent such Permitted Holder retains the sole economic rights with respect to the subject Voting Stock); or

(3)

a majority of the seats (other than vacant seats) on the Board of Directors of Affinion Holdings shall at any time be occupied by persons who were neither (a) nominated by the Board of Directors of Affinion Holdings or a Permitted Holder, nor (b) appointed by directors so nominated.

Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control.

“Code” means the Internal Revenue Code of 1986, as amended.

“Consolidated Net Leverage Ratio” means, with respect to any Person at any date, the ratio of (a) the aggregate amount of all Indebtedness of such Person and its Restricted Subsidiaries less cash and cash equivalents (excluding restricted cash), in each case, determined on a consolidated basis in accordance with GAAP as of such date to (b) the EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Company or any of its Restricted Subsidiaries Incurs or redeems any Indebtedness subsequent to the commencement of the period for which the Consolidated Net Leverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Consolidated Net Leverage Ratio is made, then the Consolidated Net Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period. The provisions applicable to pro forma transactions and Indebtedness set forth in the second paragraph of the definition of “Fixed Charge Coverage Ratio” will apply for purposes of making the computation referred to in this paragraph.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its subsidiaries for such period, on a consolidated basis, plus the amount that the provision for taxes exceeds cash taxes paid by such Person and its subsidiaries in such period; provided, however, that:

(a)

[reserved];

(b)

any increase in amortization or depreciation or any one-time non-cash charges resulting from purchase accounting in connection with any acquisition that is consummated on or after the Issue Date shall be excluded;

(c)

the cumulative effect of a change in accounting principles during such period shall be excluded;

(d)

any net after-tax gains or losses on disposal of discontinued operations shall be excluded;

(e)

any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Company) shall be excluded;

(f)

any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of (i) indebtedness, and (ii) Swap Agreements and other derivative instruments to the extent that such gains or losses have been realized by the Company, in each case, shall be excluded;

(g)

the Net Income for such period of any person that is not a subsidiary of such person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments actually paid in cash (or to the extent converted into cash) to the referent person or a subsidiary thereof in respect of such period;

(h)

the Net Income for such period of any subsidiary of such person shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such subsidiary or its equity holders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such subsidiary to such person or a subsidiary of such person (subject to the provisions of this clause (h)), to the extent not already included therein;

(i)

any non-cash impairment charge or asset write-off resulting from the application of Statement of Financial Accounting Standards No. 142 and 144, and the amortization of intangibles arising pursuant to No. 141, shall be excluded;

(j)

any non-cash expenses realized or resulting from employee benefit plans or post-employment benefit plans, long-term incentive plans or grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors and employees of such person or any of its Subsidiaries shall be excluded;

(k)

any one-time non-cash compensation charges shall be excluded;

(l)

non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 and related interpretations shall be excluded;

(m)

[reserved];

(n)

[reserved];

(o)

any currency translation gains and losses realized from currency remeasurements of Indebtedness, and any net loss or gain realized from any Swap Agreements for currency exchange risk, in each case, that are actually paid in cash, shall be excluded; and

(p) (i)

the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included.

Notwithstanding the foregoing, for the purpose of the covenant described under “—Certain Covenants—Limitation on Restricted Payments” only, there shall be excluded from the calculation of Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary of the Company in respect of or that originally constituted Restricted Investments.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1)

to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2)

to advance or supply funds:

(a)

for the purchase or payment of any such primary obligation; or

(b)

to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)

to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Credit Agreement” means (i) the Credit Agreement, dated as of May 10, 2017, among the Company, Affinion Holdings, the lenders from time to time party thereto, HPS Investment Partners, LLC, as Administrative Agent and Collateral Agent, and the other agents party thereto, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any one or more agreements or indentures extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by the Company to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1)

matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,

(2)

is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or

(3)

is redeemable at the option of the holder thereof, in whole or in part,

each case prior to 91 days after the maturity date of the New Notes;

provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that (x) if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability and (y) such Capital Stock shall not constitute Disqualified Stock if such Capital Stock matures or is mandatorily redeemable or is redeemable at the option of the holders thereof as a result of a change of control or asset sale so long as the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the New Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the New Notes (including the purchase of any New Notes tendered pursuant thereto); provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

“EBITDA” means, with respect to the Company and its Restricted Subsidiaries on a consolidated basis for any period, the Consolidated Net Income of the Company and its Restricted Subsidiaries for such period (without giving effect to the amount added to Net Income in calculating Consolidated Net Income for the excess of the provision for taxes over cash taxes), plus

(a)

the sum of, without duplication:

(i)

to the extent deducted or otherwise excluded in calculating Consolidated Net Income for such period, provision for taxes based on income, profits or capital of the Company and its Restricted Subsidiaries for such period, without duplication, including, without limitation, state franchise and similar taxes, and including an amount equal to the amount of tax distributions actually made to the holders of Equity Interests of the Company and the Restricted Subsidiaries in respect of such period, which shall be included as though such amounts had been paid as income taxes directly by the Company or any Restricted Subsidiary; plus

(ii)

to the extent deducted or otherwise excluded in calculating Consolidated Net Income for such period, Fixed Charges of the Company and its Restricted Subsidiaries for such period; plus

(iii)

to the extent deducted or otherwise excluded in calculating Consolidated Net Income for such period, depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash charges or expenses to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of the Company and its Restricted Subsidiaries for such period; plus

(iv)

to the extent deducted or otherwise excluded in calculating Consolidated Net Income for such period, the amount of any business optimization expenses and restructuring charges or expenses (which, for the avoidance of doubt, shall include office and plant closures, facility consolidations, retention payments and special supplemental bonuses payable, exit costs, severance payments, systems establishment costs or excess pension charges); provided that the aggregate total amount of all such restructuring charges and expenses that are actually paid in cash that may be added back, under this clause (iv) shall not exceed the greater of $15,000,000 and 7.5% of EBITDA for the relevant Test Period prior to giving effect to such addback; plus

(v)

any net after-tax extraordinary or nonrecurring or unusual losses, expenses or charges, provided that the aggregate total amount of all such losses, expenses, charges and fees consisting of legal fees, fines and legal settlements that may be added back pursuant to this clause (v) shall not exceed (x) $16,500,000 for the relevant Test Period or (y) $33,000,000 in the aggregate during the term of the Indenture; plus

(vi)

[reserved]; plus

(vii)

any expenses or charges (other than depreciation or amortization expense as described in the preceding clause (iii)) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by the Indenture (including a refinancing thereof) (whether or not successful), including such fees, expenses or charges related to (x) the offering of the Existing Notes, (y) the Restructuring Transactions (to the extent such fees, expenses or charges are paid within 180 days of the Issue Date), and (z) any amendment or other modification of the New Notes or other Indebtedness; plus

(viii)

non-cash gains and losses with respect to Swap Agreements and other derivative instruments; plus

(ix)

non-cash currency translation gains and losses related to currency remeasurements of Indebtedness, and any net non-cash loss or gain resulting from any Swap Agreement for currency exchange risk; minus

(b)

the sum of (i) non-cash items increasing such Consolidated Net Income for such period (excluding the recognition of deferred revenue or any non-cash items which represent the reversal of any accrual of, or reserve for, anticipated cash charges in any prior period and any items for which cash was received in any prior period and excluding amounts increasing Consolidated Net Income pursuant to clause (q) of the definition of Consolidated Net Income); and (ii) any net after-tax extraordinary or nonrecurring or unusual gains or income (including, for the avoidance of doubt, cancellation of debt income in connection with the Transactions or otherwise);

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the preceding, the provision for taxes based on the income or profits of, the Fixed Charges of, the depreciation and amortization and other non-cash expenses or non-cash items of and the restructuring charges or expenses of, a Restricted Subsidiary of the Company will be added to (or subtracted from, in the case of non-cash items described in clause (b) above) Consolidated Net Income to compute EBITDA, (A) in the same proportion that the Net Income of such Restricted Subsidiary was added to compute such Consolidated Net Income of the Company, and (B) only to the extent that a corresponding amount of the Net Income of such Restricted Subsidiary would be permitted at the date of determination to be dividended or distributed to the Company by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Excluded Foreign Subsidiary” means (i) any Foreign Subsidiary that is a CFC and (ii) any Restricted Subsidiary that has no material assets other than Equity Interests of, or Equity Interests and indebtedness of, one or more CFCs.

“Excluded Subsidiaries” means (i) each Unrestricted Subsidiary, (ii) to the extent prohibited by Applicable Insurance Laws and Regulations, any Insurance Subsidiary, (iii) [reserved]; (iv) any Foreign Subsidiary not required to be Guarantors pursuant to the Agreed Guarantee Principles, (v) any Immaterial Subsidiary (as defined in the Credit Agreement as in effect on the Issue Date), (vi) any Restricted Subsidiary solely to the extent that, and only for so long as, guaranteeing the Obligations would violate or require consent (that could not be readily obtained without undue burden to the Company and the Guarantors) under applicable law or regulations or a contractual obligation on such Restricted Subsidiary and such law or obligation existed at the time of the acquisition of such Restricted Subsidiary and was not created or made binding on such Restricted Subsidiary in contemplation of or in connection with the acquisition of such Restricted Subsidiary and (vii) any Excluded Foreign Subsidiaries; provided, that any such Restricted Subsidiary that is a guarantor under or in respect of the Credit Agreement shall be deemed not to be an Excluded Subsidiary.

“Existing Notes” means the Senior Cash 12.5% / PIK Step-Up to 15.5% New Notes due 2022 that were issued by the Company May 10, 2017.

“Fair Market Value” means, with respect to any asset or property, the price that could be negotiated in an arm’s-length transaction between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of such period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio referred to above, Investments, acquisitions, dispositions, mergers, consolidations or discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations or discontinued operations (including the Transactions) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger or consolidation or discontinued any operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger, consolidation or discontinued operation (including the Transactions) and the amount of income or earnings relating thereto, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company and shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated by the SEC. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if the related hedge has a remaining term in excess of twelve months).

Interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

(1)

the consolidated interest expense (net of interest income) to the extent it relates to Indebtedness of such Person and its Restricted Subsidiaries for such period and to the extent such expense was deducted in computing Consolidated Net Income, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments (including any interest on the New Notes), the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations (but excluding the amortization or writeoff of deferred financing fees or expenses of any bridge or other financing fee in connection with the Transactions , the refinancing of the Credit Agreement and the offering of the New Notes); plus

(2)

the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

(3)

any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such guarantee or Lien is called upon; plus

(4)

to the extent not included in clause (1) above, the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock or Preferred Stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests (other than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal,

in each case, on a consolidated basis and in accordance with GAAP.

“Flow Through Entity” means an entity that is treated as a partnership not taxable as a corporation, a grantor trust or a disregarded entity for U.S. federal income tax purposes or subject to treatment on a comparable basis for purposes of state, local or foreign tax law.

“Foreign Subsidiary” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect subsidiary of such Restricted Subsidiary.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of the Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment. Notwithstanding any changes in GAAP after the Issue Date, any lease of Affinion Holdings, the Company or their respective Subsidiaries that would be characterized as an operating lease under GAAP in effect on the Issue Date (whether such lease is entered into before or after the Issue Date) will not constitute Indebtedness, a Capital Lease or a Capital Lease Obligation of Affinion Holdings, the Company or their respective Subsidiaries under the Indenture as a result of such changes in GAAP.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

“Guarantee” means any guarantee of the obligations of the Company under the Indenture and the New Notes by any Person in accordance with the provisions of the Indenture.

“Guarantor” means any Person that Incurs a Guarantee; provided, that upon the release or discharge of such Person from its Guarantee in accordance with the Indenture, such Person ceases to be a Guarantor.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

(1)

currency exchange or interest rate swap agreements, cap agreements and collar agreements; and

(2)

other agreements or arrangements designed to manage exposure or protect such Person against fluctuations in currency exchange or interest rates.

“holder” or “noteholder” means the Person in whose name a Note is registered on the registrar’s books.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

“Indebtedness” means, with respect to any Person:

(1)

the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property, except any such balance that constitutes a current account payable, trade payable or similar obligation Incurred, (d) in respect of Capital Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2)

to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3)

to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (i) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money, (ii) deferred or prepaid revenues, (iii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (iv) obligations to make payments in respect of money back guarantees offered to customers in the ordinary course of business, (v) obligations to make payments to one or more insurers in respect of premiums collected by the Company on behalf of such insurers or in respect profit-sharing arrangements entered into with such insurers, in each case in the ordinary course of business, or (vi) the financing of insurance premiums with the carrier of such insurance or take or pay obligations contained in supply agreements, in each case entered into in the ordinary course of business.

Notwithstanding anything in the Indenture, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under the Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under the Indenture.

“Identified Guarantor” means a Guarantor identified in writing for release by the Company and agreed to by holders of a majority in principal amount of the New Notes outstanding.

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Similar Business, in each case of nationally recognized standing that is, in the good faith determination of the Board of Directors of the Company, qualified to perform the task for which it has been engaged.

“Insurance Business” means one or more aspects of the business of soliciting, administering, selling, issuing or underwriting insurance or reinsurance.

“Insurance Subsidiary” means any Restricted Subsidiary that is licensed by any Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance Business.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and marketing partners and commission, travel and similar advances to officers, employees and consultants, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and the covenant described under “—Certain Covenants—Limitation on Restricted Payments”:

(1)

“Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a)

the Company’s “Investment” in such Subsidiary at the time of such redesignation, less

(b)

the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2)

any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by senior management or the Board of Directors of the Company.

“Investor Purchase Agreement” means that certain Investor Purchase Agreement, dated as of February [•], 2019, by and among Affinion Holdings, the Company and the investors from time to time party thereto.

“Issue Date” means the date on which the New Notes are originally issued.

“Joint Venture” means any Person, other than an individual or a Subsidiary of the Company, (i) in which the Company or a Restricted Subsidiary of the Company holds or acquires an ownership interest (whether by way of Capital Stock or otherwise) and (ii) which is engaged in a Similar Business.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest and, any filing of or agreement to give any financing statement under the Uniform Commercial Code or equivalent statutes of any jurisdiction (other than a filing for informational purposes)); provided, that in no event shall an operating lease be deemed to constitute a Lien.

“Management Group” means all of the individuals consisting of the directors, executive officers and other management personnel of the Company or any direct or indirect parent company of the Company, as the case may be, on the Issue Date together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of the Company or any direct or indirect parent company of the Company, as the case may be, as applicable, was approved by (x) a vote of a majority of the directors of the Company or any direct or indirect parent of the Company as applicable, then still in office who were either directors on the Issue Date or whose election or nomination was previously so approved or (y) the Specified Holders and (2) executive officers and other management personnel of the Company or any direct or indirect parent company of the Company, as the case may be, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of the Company or any direct or indirect parent company of the Company, as the case may be, as applicable.

“Management Incentive Plan” means Affinion Holding’s new incentive plan (as amended from time to time) for its directors and management with equity and non-equity awards, as described in the Offering Memorandum.

“Moody’s” means Xxxxx’x Investors Service, Inc. or any successor to the rating agency business thereof.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, less an amount equal to the amount of tax distributions actually made to the holders of Capital Stock of such Person or any Parent of such Person in respect of a period in accordance with clause (8) of the second paragraph under “—Certain Covenants—Limitation on Restricted Payments,” as if such amounts had been paid as income taxes directly by such Person but only to the extent such amounts have not already been accounted for as taxes reducing the net income (loss) of such Person.

“Non-Guarantor Restricted Subsidiary” means any Restricted Subsidiary of the Company that is not a Subsidiary Guarantor.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided, that Obligations with respect to the New Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the holders of the New Notes.

“Offering Memorandum” means the Confidential Offering Memorandum, Consent Solicitation, Rights Offering and Disclosure Statement, dated March [4], 2019 (including the information incorporated by reference therein), as amended or supplemented on the Issue Date.

“Officer” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company or any of the Company’s Restricted Subsidiaries.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company or any of the Company’s Restricted Subsidiaries, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or any of the Company’s Restricted Subsidiaries, that meets the requirements set forth in the Indenture.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.

“Parent” means, with respect to any Person, any direct or indirect parent company of such Person whose only material assets consist of the common Capital Stock of such Person. For the avoidance of doubt, Affinion Holdings shall be a Parent of the Company on the Issue Date.

“Permitted Holders” mean (i) any owner of Equity Interests of Affinion Holdings as of the Issue Date that, together with its Affiliates, owns at least 10% of the Equity Interests of Affinion Holdings on a fully diluted basis as of the Issue Date and (ii) any Affiliates of the foregoing. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investments” means:

(1)

any Investment in the Company or any Restricted Subsidiary;

(2)

any Investment in Cash Equivalents;

(3)

any Investment by the Company or any Subsidiary Guarantor of the Company in a Person if as a result of such Investment (a) such Person becomes a Subsidiary Guarantor of the Company, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Subsidiary Guarantor of the Company;

(4)

[reserved];

(5)

any Investment existing on the Issue Date and any Investments made pursuant to binding commitments in effect on the Issue Date;

(6)

advances in the ordinary course of business to employees not in excess of $6.25 million and outstanding at any one time in the aggregate; provided that advances that are forgiven shall continue to be deemed outstanding;

(7)

any Investment acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(8)

Hedging Obligations permitted under clause (j) of the second paragraph of “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;”

(9)

additional Investments by the Company or any of its Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) since the Issue Date that are at that time outstanding (without giving effect to the sale of Investments made pursuant to this clause (9) to the extent the proceeds of such sale received by the Company and its Restricted Subsidiaries do not consist of Cash Equivalents), not to exceed $20 million (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(10)

loans and advances to officers, directors and employees for business-related travel expenses, moving and relocation expenses and other similar expenses, in each case Incurred in the ordinary course of business;

(11)

Investments the payment for which consists of Equity Interests of the Company or any Parent of the Company (other than Disqualified Stock); provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under the calculation set forth in clause (c) of the first paragraph of the covenant described under “—Certain Covenants—Limitation on Restricted Payments” until such time as the Investment in such Equity Interests is no longer outstanding;

(12)

Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(13)

Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property in each case in the ordinary course of business;

(14)

Investments of a Restricted Subsidiary of the Company acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with a Restricted Subsidiary of the Company in a transaction that is not prohibited by the covenant described under “—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets” after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(15)

any Investment in the New Notes;

(16)

any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under “—Certain Covenants—Transactions with Affiliates” (except transactions described in clauses (2), (5), (6), (7), (8), (10) and (15) of such paragraph); and

(17)

any Investment in the Company or any Restricted Subsidiary of the Company consisting of intercompany current liabilities incurred in the ordinary course of business, consistent with past practice and in good faith in connection with reasonable and customary cash management operations of the Company and/or its Restricted Subsidiaries to provide working capital to Restricted Subsidiaries for ongoing operations.

“Permitted Liens” means, with respect to any Person:

(1)

pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations, including those to secure health, safety, insurance and environmental obligations, of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2)

landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction or other like Liens arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings and in respect of which, if applicable, the Company or any Restricted Subsidiary shall have set aside on its books reserves in accordance with GAAP;

(3)

Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings;

(4)

Liens to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory obligations, surety and appeal bonds, performance and return of money bonds, bids, leases, government contracts, trade contracts, agreements with public utilities, and other obligations of a like nature (including letters of credit in lieu of any such bonds or to support the issuance thereof) in the ordinary course of business, including those Incurred to secure health, safety, insurance and environmental obligations in the ordinary course of business;

(5)

zoning restrictions, survey exceptions, easements, trackage rights, leases (other than Capital Lease Obligations), licenses, special assessments, rights-of-way, restrictions on or agreements dealing with the use of real property, servicing agreements, development agreements, site plan agreements and other similar encumbrances Incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and that, in the aggregate, do not interfere in any material respect with the ordinary conduct of the business of such Person;

(6)

Liens securing Indebtedness permitted to be Incurred pursuant to clause (a), (d) or (v) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” provided, that in the case of clause (d), such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred;

(7)

Liens existing on the Issue Date;

(8)

Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary of the Company;

(9)

Liens on assets or property at the time the Company or a Restricted Subsidiary of the Company acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary of the Company; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other assets or property owned by the Company or any Restricted Subsidiary of the Company;

(10)

Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary of the Company permitted to be Incurred in accordance with the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;”

(11)

Liens securing Hedging Obligations permitted to be Incurred under clause (j) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;”

(12)

Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13)

leases and subleases of real property granted to others in the ordinary course of business that do not (i) materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries or (ii) secure any Indebtedness;

(14)

Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

(15)

Liens in favor of the Company or any Guarantor;

(16)

Liens on equipment of the Company or any Restricted Subsidiary granted in the ordinary course of business to the Company’s customer at the site at which such equipment is located;

(17)

Liens securing insurance premiums financing arrangements; provided, that such Liens are limited to the applicable unearned insurance premiums;

(18)

Liens on the Equity Interests of Unrestricted Subsidiaries;

(19)

licenses of intellectual property and software that are not material to the conduct of any of the business lines of the Company and the Restricted Subsidiaries and the value of which does not constitute a material portion of the assets of the Company and its Restricted Subsidiaries, taken as a whole, and such license does not materially interfere with the ordinary course of conduct of the business of the Company or any of its Restricted Subsidiaries;

(20)

Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (7), (8) and (9); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (7), (8) and (9) at the time the original Lien became a Permitted Lien under the Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(21)

judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(22)

Liens securing obligations permitted to be Incurred under clause (l) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;

(23)

Liens arising out of consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(24)

Liens incurred to secure cash management services in the ordinary course of business and in good faith;

(25)

Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;

(26)

deposits and other Liens made in the ordinary course of business in compliance with the Federal Employers Liability Act or any other workers’ compensation, unemployment insurance and other social security laws or regulations and deposits securing liability to insurance carriers under insurance or self-insurance arrangements in respect of such obligations and (ii) deposits and other Liens securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Company or any Restricted Subsidiary;

(27)

Liens on cash collateral securing Indebtedness permitted to be Incurred under clause (q) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” so long as such cash collateral does not exceed 105% of the Indebtedness permitted to be Incurred under such clause (q);

(28)

deposits or other Liens with respect to property or assets of the Company or any Restricted Subsidiary; provided, that the obligations secured by such Liens shall not exceed $1.25 million at any time; and

(29)

Liens solely on any xxxx xxxxxxx money deposits made by the Company or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder with respect to any acquisition that would constitute an Investment pursuant to this Indenture;

(30)

Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights (including Liens arising or created pursuant to the applicable general banking terms and conditions (algemene bankvoorwaarden) of any member of the Dutch Banking Association;

(31)

Liens of franchisors in the ordinary course of business not securing Indebtedness; and

(32)

Liens securing judgments that do not constitute an Event of Default under clause (8) of the definition thereof.

“Person” means any individual, corporation, partnership, limited liability company, Joint Venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up.

“Presumed Tax Rate” means the highest effective marginal statutory combined U.S. federal, state and local income tax rate prescribed for an individual residing in New York City (taking into account (i) the deductibility of state and local income taxes for U.S. federal income tax purposes, assuming the limitation of Section 68(a)(2) of the Code applies and taking into account any impact of Section 68(f) of the Code, and (ii) the character (long-term or short-term capital gain, dividend income or other ordinary income) of the applicable income).

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this “Description of the New Notes,” all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

“Restructuring Transactions” shall mean the transactions contemplated by the Support Agreement, including the transactions contemplated by the Fifth Amendment to the Credit Agreement, dated as of the Issue Date, and the issuance of the New Notes.

“S&P” means Standard & Poor’s Ratings Group or any successor to the rating agency business thereof.

“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than leases between the Company and a Restricted Subsidiary of the Company or between Restricted Subsidiaries of the Company.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Senior Credit Documents” means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented or otherwise modified from time to time.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC or any successor provision.

“Similar Business” means any business or activity of the Company or any of its Subsidiaries currently conducted or proposed as of the Issue Date, or any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof, or is complementary, incidental, ancillary or related thereto.

“Specified Holders” means Xxxxxxx Management Corporation, Metro SPV LLC, Xxxxxxx Capital Management, LP and Empyrean Capital Partners, L.P. and any of their respective Affiliates.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

“Subordinated Indebtedness” means (a) with respect to the Company, any Indebtedness of the Company which is by its terms subordinated in right of payment to the New Notes and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.

“Subsidiary” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Wholly Owned Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity and (3) any Person that is consolidated in the consolidated financial statements of the specified Person in accordance with GAAP.

“Subsidiary Guarantor” means each Subsidiary of the Company that is a Guarantor.

“Support Agreement” means that certain Support Agreement, dated as of February [•], 2019, by and among Affinion Holdings, the Company and the consenting stakeholders party thereto, as may be amended, modified or supplemented prior to the Issue Date.

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided, that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Affinion Holdings, the Company or any of its Restricted Subsidiaries shall be a Swap Agreement.

“Test Period” means, on any date of determination, the period of four consecutive fiscal quarters of the Company then most recently ended for which financial statements have been filed with the SEC or furnished to Trustee pursuant to the covenant under “Certain Covenants—Reports and Other Information” (taken as one accounting period).

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture.

“Total Assets” means, with respect to any Person, the total consolidated assets of such Person and its Restricted Subsidiaries, as shown on the most recent balance sheet.

“Transactions” means collectively, the Exchange Offer, the Restructuring Transactions, and the other related transactions that are described in, or contemplated by, the Support Agreement, the Investor Purchase Agreement and the Offering Memorandum.

“Transaction Documents” means the Indenture, the Support Agreement, the Investor Purchase Agreement, the Credit Agreement and, in each case, any other document entered into in connection with the Transactions, in each case as amended, supplemented or modified from time to time.

“Trust Officer” means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and who shall have direct responsibility for the administration of the Indenture.

“Trustee” means the respective party named as such in the Indenture until a successor replaces it and, thereafter, means the successor.

“Unrestricted Subsidiary” means:

(1)

any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2)

any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company (other than any Subsidiary of the Subsidiary to be so designated); provided, however, that (i) the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries (other than Equity Interests of Unrestricted Subsidiaries) and (ii) such designation would be permitted under the covenant described under “—Certain Covenants—Limitation on Restricted Payments.” Notwithstanding the foregoing, the aggregate amount of Total Assets of all Unrestricted Subsidiaries as of the last day of the most recent fiscal quarter for which internal consolidated financial statements of the Company are available shall not exceed either (x) 2.00% of the Total Assets of the Company or (y) 1.00% of EBITDA, in each case, as of such date.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

(x)

(1) the Company could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the first paragraph under “—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” or (2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y)

no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Government Obligations” means securities that are:

(1)

direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or

(2)

obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

“Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares or interests required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such Person.

Exhibit A to the Description of the New Notes

AGREED GUARANTEE PRINCIPLES

The guarantees to be provided by Foreign Subsidiaries of Affinion Holdings (the “Group”) will be given in accordance with certain agreed guarantee principles set forth below (the “Agreed Guarantee Principles”). This schedule addresses the manner in which the Agreed Guarantee Principles will impact the guarantees proposed to be taken in relation to this transaction.

The Agreed Guarantee Principles embody a recognition by all parties that there may be certain legal and practical impediments in obtaining effective guarantees from members of the Group in jurisdictions in which it has been agreed that guarantees will be granted. In particular:

general statutory limitations, regulatory requirements or restrictions, financial assistance, corporate benefit, fraudulent preference, “earnings stripping”, “controlled foreign corporation” rules, “thin capitalization” rules (or analogous restrictions), tax restrictions, retention of title claims, employee consultation or approval requirements, capital maintenance rules and similar principles may prevent or limit a member of the Group from providing a guarantee or may require that the guarantee or be limited in amount or otherwise;

ii.

a key factor in determining whether or not a guarantee shall be taken is the applicable cost (including adverse effects on interest deductibility and stamp duty, notarization and registration fees and the burden and/or cost of complying with any applicable financial assistance, corporate benefit or thin capitalization rules) which shall not be materially and disproportionately greater than the benefit to the holders of the New Notes of obtaining such guarantee;

iii.

the maximum guaranteed amount may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties where the incremental cost of such fees, taxes and duties is materially and disproportionately greater than the benefit to the holders of the New Notes of increasing the guaranteed amount;

iv.

members of the Group will not be required to give guarantees if it is not within the legal capacity of the relevant members of the Group or if the same would conflict with the fiduciary duties of the directors of the relevant members of the Group or contravene any legal or regulatory prohibition or would result in (or in a material risk of) personal or criminal liability on the part of any officer or director;

members of the Group will not be required to give guarantees if doing so would be prohibited by (1) any law or regulation or (2) any contractual obligation in effect on the Issue Date (or, with respect to any subsidiary that is acquired after the Issue Date, any contractual obligation in effect on the date of such acquisition that is not entered into in contemplation thereof), but only for so long as such prohibition exists, and provided that the relevant member of the Group shall use reasonable endeavors to overcome any such obstacles or restrictions; and

vi.

the giving of a guarantee, will not be required if it would be reasonably likely to have a material adverse effect on the ability of the Company or the relevant Guarantor to conduct its operations and business in the ordinary course as otherwise permitted by the Indenture.

Schedule I to the Description of the New Notes

Initial Guarantors

The Initial Guarantors shall be the following:

US Subsidiary Guarantors:

Affinion Brazil Holdings I, LLC

Affinion Brazil Holdings II, LLC

Affinion Data Services, Inc.

Affinion Developments, LLC

Affinion Group, Inc.

Affinion Group, LLC

Affinion Investments II, LLC

Affinion Investments, LLC

Affinion Net Patents, Inc.

10.

Affinion PD Holdings, Inc.

11.

Affinion Publishing, LLC

12.

BreakFive, LLC

13.

Xxxxxxxx Agency, Inc.

14.

CCAA, Corporation

15.

Connexions Loyalty Acquisition, LLC

16.

Connexions Loyalty Global Travel Fulfillment LLC

17.

Connexions Loyalty Travel Solutions LLC

18.

Connexions Loyalty, Inc.

19.

Connexions SM Ventures, LLC

20.

Connexions SMV, LLC

21.

CUC Asia Holdings

22.

Global Protection Solutions, LLC

23.

Incentive Networks LLC

24.

Lift Media, LLC

25.

Long Term Preferred Care, Inc.

26.

Loyalty Travel Agency LLC

27.

Xxxxx Corp.

28.

Travelers Advantage Services, LLC

29.

Trilegiant Auto Services, Inc.

30.

Trilegiant Corporation

31.

Trilegiant Insurance Services, Inc.

32.

Trilegiant Retail Services, Inc.

33.

Watchguard Registration Services, Inc.

34.

Webloyalty Holdings Inc.

35.

Xxxxxxxxxx.xxx, Inc.

Foreign Subsidiary Guarantors:

Affinion International Holdings Limited (UK)

Affinion International Limited UK (UK)

Affinion International Travel Holdco Limited (UK)

Loyalty Ventures Limited (UK)

Webloyalty International Limited (UK)

Affinion International B.V. (The Netherlands)

Bassae Holding B.V. (The Netherlands)

Webloyalty Holdings Cooperatief U.A. (The Netherlands)

Webloyalty International Sarl (Switzerland)

Annex B-2

Summary Description of the Rights Offering


	RECAPITALIZATION	IN-COURT RESTRUCTURING
Security Offered	Rights to subscribe for $300.0 million aggregate principal amount of New Notes, having the terms set forth on Annex B-1.

Participants	(i) Eligible Holders of Existing Notes that participate in the Exchange Offer on or prior to the Consent Time and (ii) existing holders of Company Common Stock and Existing Warrants, provided that each such participating holder holds at least 1% of Company Common Stock on an as converted basis.	Holders of Note Claims.

Allocation	96% to Eligible Holders of Existing Notes that participate in the Exchange Offer on or prior to the Consent Time. 4% to existing holders of Company Common Stock and Existing Warrants that hold, together with their affiliates, at least 1% of Company Common Stock on an as converted basis.	100% to eligible holders of Note Claims. Existing holders of Company Common Stock and Existing Warrants will have no right to participate in the Rights Offering.

Price	Each $1,000 principal amount of New Notes will be offered at a price equal to $1,000, with no OID.

Expiration of the Offer; Closing	The Rights Offering will expire at the Consent Time, with subscription offer acceptance notices due on the fifth Business Day following the Consent Time (the “Subscription Deadline”). Participants (other than the Financing Parties) must fund into escrow within three Business Days after the Subscription Deadline. The issuance of the New Notes pursuant to the Rights Offering will occur concurrent with the settlement of the Exchange Offer (and the Financing Parties will fund on such date) (the “Settlement Date”. For the avoidance of doubt, interest on the New Notes shall start accruing only at the Settlement Date.	The Rights Offering will expire at the Consent Time, with subscription offer acceptance notices due on Subscription Deadline. Participants (other than the Financing Parties) must fund into escrow within three Business Days after the Subscription Deadline. The issuance of the New Notes pursuant to the Rights Offering will occur concurrent on the Effective Date (and the Financing Parties will fund on such date). For the avoidance of doubt, interest on the New Notes shall start accruing only at the Effective Date.

B-2


	RECAPITALIZATION	IN-COURT RESTRUCTURING
No Revocation of Exercise	All subscriptions to purchase New Notes will be irrevocable (except as required by law) and may not be withdrawn.

Financing Parties	Certain parties to the Support Agreement have entered into the Investor Purchase Agreement on the terms and conditions set forth therein (the “*Financing Parties*”).

Financing Commitment Premium	Financing commitment premium will consist of (i) $45 million aggregate principal amount of New Notes and (ii) New Common Stock (or common stock of reorganized Affinion Holdings with respect to an In-Court Restructuring) equal to 12.5% of the issued and outstanding New Common Stock (or common stock of reorganized Affinion Holdings), as calculated prior to dilution on account of New Common Stock issued pursuant to the MIP and, in the case of a Recapitalization, the issuance of Investor Warrants, as applicable (the “*Financing Premium*”). To the extent the acquisition of New Common Stock (or common stock of reorganized Affinion Holdings with respect to an In-Court Restructuring) would result in a Financing Party beneficially owning 19.9% or more of the outstanding amount of New Common Stock or common stock of reorganized Affinion Holdings, as applicable, and which a Financing Party’s acquisition of the New Common Stock, or notice to, a governmental authority (including without limitation the U.K. Financial Conduct Authority), and such consent has not been obtained, or notice has not been given, such Financing Party will receive, as necessary, New Xxxxx Warrants in lieu of shares of New Common Stock or common stock of reorganized Affinion Holdings, as applicable, for such Financing Party’s applicable its Financing Premium.

Exercise Documents	Participants will execute and deliver a customary subscription offer acceptance notice.

B-3

Annex C

Form of Credit Agreement Amendment

[See Attached]

C-1

Execution Version

FIFTH AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO COLLATERAL AGREEMENT¹

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO COLLATERAL AGREEMENT, dated as of , 2019 (this “Fifth Amendment”), is made by and among AFFINION GROUP, INC., a Delaware corporation (the “Borrower”), HPS INVESTMENT PARTNERS, LLC, as administrative agent (in such capacity, together with its successors in such capacity, the “Administrative Agent”), the Lenders party hereto and, for purposes of Section 5 hereof, each other Loan Party party hereto. Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Amended Credit Agreement or in the Amended Collateral Agreement, as applicable.

RECITALS

A. (i) AFFINION GROUP HOLDINGS, INC., a Delaware corporation (“Holdings”), the Borrower, the Lenders from time to time party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of May 10, 2017, (as amended by that First Amendment to Credit Agreement, dated November 30, 2017, that Second Amendment to Credit Agreement, dated as of May 4, 2018, that Third Amendment to Credit Agreement, dated as of July 16, 2018, that Fourth Amendment to Credit Agreement, dated as of November 14, 2018, the “Existing Credit Agreement”; and as amended hereby, the “Amended Credit Agreement”), pursuant to which the Lenders have made certain Loans and provided certain Commitments (subject to the terms and conditions thereof) to the Borrower and (ii) Holdings, the Borrower, certain other Loan Parties from time to time party thereto and the Administrative Agent are parties to that certain Collateral Agreement, dated as of May 10, 2017 (the “Existing Collateral Agreement”; and as amended hereby, the “Amended Collateral Agreement”);

B. The Borrower wishes, and the Lenders signatory hereto and the Administrative Agent are willing to permit the Borrower, to modify the application of proceeds provisions in Section 5.4(a) of the Existing Collateral Agreement;

C. The Borrower, Holdings and certain other Loan Parties are party to that certain Restructuring Support Agreement (as defined in Exhibit A hereto) and the Borrower wishes to achieve, and the Lenders signatory hereto and the Administrative Agent are willing to permit, the consummation of the Restructuring Transactions (as defined in Exhibit A hereto) described in the Restructuring Support Agreement;

In the event that the Restructuring Transactions are consummated pursuant to a chapter 11 proceeding, the Fifth Amendment and Amended Credit Agreement shall be modified as necessary to reflect, among other things, that there will only be a single class of Term Loans. Additionally, as further set forth in the Restructuring Support Agreement, the Administrative Agent (in its sole discretion) may inform the Borrower that the Fifth Amendment and Amended Credit Agreement shall be modified to (1) provide for the exercise of the Non-Consenting Lender Option (as defined in the Restructuring Support Agreement), if applicable, and (2) if, applicable, to reflect that there will only be a single class of Term Loans.

D. The Borrower desires to (i) obtain an extension of the maturity of the Revolving Facility Commitments and Term Loans existing immediately prior to the Fifth Amendment Effective Date (as hereinafter defined) and (ii) to modify certain other provisions in the Existing Credit Agreement;

E. The Revolving Facility Lenders and each Term Lender signatory hereto (any such Term Lender, a “2019 Term Lender”) have agreed to extend the maturity of all Revolving Facility Loans and such 2019 Term Lender’s outstanding Term Loans (so extended, the “2019 Term Loans”), as applicable, and consents to the proposed modifications with respect thereto in accordance with the terms and subject to the conditions set forth herein; as of the Fifth Amendment Effective Date, Term Loans held by Term Lenders that are not party hereto shall be deemed a separate tranche from the 2019 Term Loans (such Term Loans to be referred to as the “Non-Extended Term Loans”); and

F. The Borrower wishes, and the Lenders signatory hereto and the Administrative Agent are willing, to amend the Existing Credit Agreement pursuant to Section 9.09(b) of the Existing Credit Agreement as more fully described herein.

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

SECTION 1. Amendments to Existing Credit Agreement. As of the Fifth Amendment Effective Date (as defined below), the Existing Credit Agreement is hereby amended, to delete the stricken text (indicated textually in the same manner as the following example: ~~stricken text~~ ) and to add the underlined text (indicated textually in the same manner as the following example: underlined text) as set forth on Exhibit A hereto.

SECTION 2. Amendments to Existing Collateral Agreement. As of the Fifth Amendment Effective Date, the Existing Collateral Agreement is hereby amended as follows:

(a) Section 5.4(a) is hereby replaced in its entirety with the following text in lieu thereof:

“5.4 Application of Proceeds. (a) Subject to Section 5.4(b) below, if an Event of Default shall have occurred and be continuing, the Agent shall, notwithstanding the provisions of Section 2.08 and Section 2.11 of the Credit Agreement, apply all or any part of the Collateral and/or net Proceeds thereof realized through the exercise by the Agent of its remedies hereunder or as the result of any distributions or other recoveries in any bankruptcy or other insolvency proceeding (after deducting fees and expenses as provided in Section 5.5), whether or not held in any Collateral Account, in payment of the Secured Obligations. The Agent shall apply any such Collateral or Proceeds to be applied as set forth in Section 3(a) of the Fifth Amendment.

In addition, with respect to any proceeds of Insurance received by the Agent, (x) if no Event of Default shall have occurred and be continuing, (i) such Insurance Proceeds shall be returned to the Grantors if permitted or required by the Credit Agreement or (ii) if not so permitted or required by the Credit Agreement, then such Insurance Proceeds shall be applied in accordance with this Section 5.4(a) and (y) if an Event of Default shall have occurred and be continuing, then such Insurance Proceeds shall be applied in accordance with this Section 5.4(a).

SECTION 3. Consents and Other Agreements.

(a) Notwithstanding anything to the contrary in any Loan Document, if an Event of Default shall have occurred and be continuing, the Collateral Agent shall, notwithstanding the provisions of Section 2.08 and Section 2.11 of the Credit Agreement, apply all or any part of the Collateral and/or net Proceeds (as defined in the Collateral Agreement) thereof and/or any other proceeds realized through the exercise by the Collateral Agent of its remedies under the Loan Documents or as the result of any distributions or other recoveries in any bankruptcy or other insolvency proceeding (after deducting fees and expenses as applicable), whether or not held in any Collateral Account, in payment of the Secured Obligations. The Collateral Agent shall apply any such amounts in the following order:

First, to the Collateral Agent and the Administrative Agent to pay incurred and unpaid fees and expenses under the Loan Documents;

Second, to the Administrative Agent in respect of Secured Obligations then due and owing to any Revolving Facility Lender and Non-Extending Term Lender and remaining unpaid for application by the Administrative Agent in accordance with the terms of the Credit Agreement;

Third, to the Administrative Agent in respect of all Secured Obligations to the Revolving Facility Lenders and Non-Extending Term Lenders (other than those under clause second above) for prepayment of such Secured Obligations in accordance with the terms of the Credit Agreement; and

Fourth, to the Administrative Agent in respect of Secured Obligations then due and owing (other than those under clauses second and third above) and remaining unpaid for application by the Administrative Agent in accordance with the terms of the Credit Agreement;

Fifth, to the Administrative Agent in respect of all Secured Obligations (other than those under clauses second, third and fourth above) for prepayment of such Secured Obligations in accordance with the terms of the Credit Agreement; and

Sixth, any balance of such Proceeds or other amounts remaining after a Discharge of the Secured Obligations shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same and any Collateral remaining after a Discharge of Secured Obligations shall be returned to the applicable Grantor or to whomsoever may be lawfully entitled to receive the same.

In addition, with respect to any proceeds of Insurance (as defined in the Collateral Agreement) received by the Collateral Agent, (x) if no Event of Default shall have occurred and be continuing, (i) such Insurance Proceeds shall be returned to the Grantors if permitted or required by the Credit Agreement or (ii) if not so permitted or required by the Credit Agreement, then such Insurance Proceeds shall be applied in accordance with this Section 3(a) and (y) if an Event of Default shall have occurred and be continuing, then such Insurance Proceeds shall be applied in accordance with this Section 3(a).

(b) On the Fifth Amendment Effective Date, certain outstanding Term Loans shall be prepaid in accordance with the Restructuring Support Agreement; the 2019 Term Lenders party hereto hereby consent to the prepayment on the Fifth Amendment Effective Date of any 2019 Term Loans on a less than pro rata basis with any prepayment of Non-Extended Term Loans on the Fifth Amendment Effective Date and agree that such prepayment of 2019 Term Loans shall be made at par plus accrued and unpaid interest, without any further premium or penalty.

(c) The Lenders party hereto hereby consent to the Restructuring Transactions and agree that the consummation thereof does not result in a Default or Event of Default under the Loan Documents, such transactions to include, for the avoidance of doubt, (i) (x) the prepayment in full at par plus accrued and unpaid interest of the Revolving Facility Loans using proceeds from the Offering and cash on hand and (y) subject to the exercise of the Non-Consenting Lender Option (as defined in the Restructuring Support Agreement), the prepayment (A) at par plus accrued and unpaid interest of the 2019 Term Loans and (B) of the Non-Extended Term Loans pursuant to the terms of the Existing Credit Agreement, in the case of clause (y), using the $5,000,000 of Net Proceeds from the Bridges Sale released from escrow on the Fifth Amendment Effective Date and $148,000,000 of proceeds from the Offering and cash on hand², (ii) the exercise and consummation of the Non-Consenting Lender Option and (iii) (w) the repayment of any outstanding Indebtedness committed pursuant to the Second Lien Commitment Letter with cash from the proceeds of the Offering and cash on hand in an amount equal to the actual cash proceeds of such Indebtedness received by the Borrower, the amount of all interest actually paid in kind, accrued and unpaid interest, and the amount of all customary indemnity and expense reimbursement obligations due under the definitive documentation for such Indebtedness, (x) the repayment of amounts equal to the Closing Fee (as defined in the Second Lien Commitment Letter) in the form of New Notes, (y) the repayment of amounts equal to the Early Termination Fee (as defined in the Second Lien Commitment Letter) in the form of New Notes and (z) the payment of any other fees, premiums or amounts (if any) owing to the lenders under such Indebtedness in the form of New Notes (as defined in Exhibit A hereto) (the prepayments contemplated pursuant to this clause (c), collectively, the “Fifth Amendment Effective Date Payments”).

To the extent the Restructuring Transactions are consummated through the Chapter 11 Cases as defined in the Restructuring Support Agreement, the amount of cash available for repayment of Term Loans on the Fifth Amendment Effective Date will be reduced by the amount of cash interest paid with respect to the Term Loans during the Chapter 11 Cases.

(d) On the Fifth Amendment Effective Date, the outstanding Revolving Facility Loans shall be prepaid in full and the Revolving Facility Commitments shall be permanently reduced to $85,000,000 on a pro rata basis among the Revolving Facility Lenders.

SECTION 4. Conditions to Effectiveness. This Fifth Amendment shall not become effective until the date (the “Fifth Amendment Effective Date”) on which each of the following conditions is satisfied (or waived in accordance with Section 9.09 of the Existing Credit Agreement):

(a)

The Administrative Agent shall have received from the Lenders required to execute this Fifth Amendment pursuant to the Restructuring Support Agreement, the Borrower and the other parties hereto, executed counterparts of this Fifth Amendment.

(b)

The Administrative Agent shall have received, on behalf of itself, the Lenders, each Issuing Bank and each Swingline Lender on the Fifth Amendment Effective Date, the favorable written opinion of (a) Akin Gump Xxxxxxx Xxxxx & Xxxx LLP and (b) local counsel for material Loan Parties organized under the laws of England and Wales, Switzerland and the Netherlands, (i) in form and substance reasonably satisfactory to the Administrative Agent, (ii) dated as of the Fifth Amendment Effective Date and (iii) addressed to the Lenders, each Issuing Bank, each Swingline Lender and the Administrative Agent, covering such matters relating to this Fifth Amendment and the Loan Documents as the Administrative Agent shall reasonably request.

(c)

The Administrative Agent shall have received a certificate from a Responsible Officer of Holdings, dated the Fifth Amendment Effective Date, confirming: (i) the representations and warranties set forth in the Loan Documents that are qualified by materiality shall be true and correct, and the representations and warranties that are not so qualified shall be true and correct in all material respects, in each case on and as of the date of the Fifth Amendment Effective Date, or if specifically specified in the Loan Documents as of the applicable earlier date, (ii) no Event of Default or Default has occurred and is continuing or would result herefrom, and (iii) that the condition set forth in Section 2(j) below has been satisfied.

(d)

The Administrative Agent shall have received in the case of each Loan Party each of the items referred to below, as applicable and subject to the proviso at the end of this clause (d):

(i) a copy of the certificate or articles of incorporation or formation, limited liability agreement, partnership agreement or other constituent or governing documents, including all amendments thereto, of each Loan Party, (a) if applicable in such jurisdiction, certified as of a recent date by the Secretary of State (or other similar official) of the jurisdiction of its organization, and a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of such jurisdiction) of each such Loan Party

as of a recent date from such Secretary of State (or other similar official), and (b) otherwise, (i) certified by the Secretary or Assistant Secretary or similar officer of each such Loan Party or other person duly authorized by the constituent documents of such Loan Party or (ii) otherwise in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders;

(ii) a certificate of the Secretary or Assistant Secretary or similar officer of each Loan Party or other person duly authorized by the constituent documents of such Loan Party dated the Fifth Amendment Effective Date and certifying:

(A) that attached thereto is a true and complete copy of the by-laws (or limited liability company agreement, articles of association, partnership agreement or other equivalent constituent and governing documents) of such Loan Party as in effect on the Fifth Amendment Effective Date and at all times since a date prior to the date of the resolutions described in clause (B) below;

(B) that attached thereto is a true and complete copy of resolutions (or equivalent authorizing actions) duly adopted by the Board of Directors (or equivalent governing body) of such Loan Party (or its managing general partner or managing member), and, with respect to each Loan Party incorporated in the Netherlands, if required by law or its constituent documents, the general meeting (algemene vergadering), (algemene ledenvergadering) and/or supervisory board (raad van commissarissen) of such Loan Party, authorizing the execution, delivery and performance of the Loan Documents to which such person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Fifth Amendment Effective Date;

(C) that attached thereto, in relation to a Loan Party incorporated in Switzerland, is a true and complete copy of the minutes of a shareholder/quotaholder resolutions duly adopted by the shareholder/quotaholder of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such person is a party and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Fifth Amendment Effective Date;

(D) that the certificate or articles of incorporation, by-laws, limited liability company agreement, articles of association, partnership agreement or other equivalent constituent and governing documents of such Loan Party have not been amended since the date of the last amendment thereto disclosed pursuant to clause (i) above;

(E) as to the incumbency and specimen signature of each officer or other duly authorized person executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party;

(F) as to the absence of any pending proceeding for the dissolution or liquidation of such Loan Party or, to the knowledge of such person, threatening the existence of such Loan Party;

(G) in the case of a Loan Party formed, incorporated or organized under the laws of England and Wales, confirming that borrowing or guaranteeing or securing, as appropriate, the total commitments would not cause any borrowing, guarantee, security or similar limit binding on it to be exceeded;

(iii) a certification of another officer or other duly authorized person as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer or other person duly authorized by such Loan Party executing the certificate pursuant to clause (ii) above; and

(iv) in the case of a Loan Party formed, incorporated or organized under the laws of England and Wales), a copy of a resolution of the board of directors (or applicable equivalent) and/or the shareholders of that Loan Party (in each case to the extent required by law): (i) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute the Loan Documents to which it is a party; (ii) authorizing a specified person or persons to execute the Loan Documents to which it is a party on its behalf; and (iii) authorizing a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with the Loan Documents to which it is a party;

provided, however, that to the extent the applicable constituent and governing documents and incumbencies required above have not changed since the last time delivered, the certifying Secretary or Assistant Secretary or similar officer or person may certify to that effect rather than re-attaching such documents and incumbencies.

(e)

The Administrative Agent shall have received in the case of each Loan Party incorporated in the Netherlands, if applicable, an unconditional positive advice (advies) of each works council having jurisdiction over that Loan Party and the related request for advice (adviesaanvraag) or confirmation of such works council that it irrevocably and unconditionally waives its right to render advice, or, if not applicable, a confirmation by the Board of Directors of that Loan Party in the resolutions referred to in paragraph (ii)(B) above that such Loan Party does not have a works council.

(f)

All actions reasonably requested by the Administrative Agent to ensure the continuing enforceability of the guarantees of the Loan Parties and the continuing grant and perfection of all security interests previously granted by the Loan Parties shall have been undertaken in a manner reasonably acceptable to the Administrative Agent.

(g)

At least five Business Days prior to the Fifth Amendment Effective Date, the Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities or reasonably requested by the Administrative Agent or any Lender under or in respect of applicable “know-your-customer” and anti-money laundering rules and regulations, including the PATRIOT Act, and including a duly executed W-9 tax form (or such other applicable IRS tax form) of the Borrower that was requested at least 10 Business Days prior to the Fifth Amendment Effective Date.

(h)

The Administrative Agent shall have received all amounts due and payable pursuant to the Restructuring Support Agreement on or prior to the Fifth Amendment Effective Date. Additionally, the Administrative Agent shall have received reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP and reasonably necessary U.S. local and foreign counsel) invoiced on or prior to the Fifth Amendment Effective Date.

(i)

The Restructuring Transactions shall have been consummated substantially concurrently with the Fifth Amendment Effective Date, on the terms set forth in the Restructuring Support Agreement.

(j)

Prior to or substantially concurrently with the Fifth Amendment Effective Date, the Borrower shall make the Fifth Amendment Effective Date Payments.

SECTION 5. Ratification and Affirmation. The Borrower and each other Loan Party does hereby adopt, ratify, and confirm the Existing Credit Agreement, the Existing Collateral Agreement and the other Loan Documents, as amended hereby, and its obligations thereunder. The Borrower and each other Loan Party hereby (a) acknowledges, renews and extends its continued liability under each Loan Document and agrees that each Loan Document remains in full force and effect, except as expressly amended hereby, notwithstanding the amendments contained herein and shall not be impaired or limited by the execution or effectiveness of this Fifth Amendment, (b) confirms and ratifies all of its obligations under the Loan Documents, including its obligations and the Liens and security interests granted by it under the Security Documents and (c) confirms that all references in such Security Documents to the “Credit Agreement” (or words of similar import) refer to the Existing Credit Agreement as amended and supplemented hereby without impairing any such obligations or Liens in any respect. Notwithstanding the conditions to effectiveness set forth in this Amendment, no consent by any Loan Party (other than the Borrower) is required by the terms of the Existing Credit Agreement or any other Loan Document to the amendments to the Existing Credit Agreement effected pursuant to this Amendment and nothing in the Amended Credit Agreement, this Amendment or any other Loan Document shall be deemed to require its consent to any future amendments to the Amended Credit Agreement, except to the extent expressly set forth in Section 9.09 of the Amended Credit Agreement.

SECTION 6. Miscellaneous.

(a)

Confirmation. The provisions of the Loan Documents, as amended by this Fifth Amendment, shall remain in full force and effect in accordance with their terms following the effectiveness of this Fifth Amendment.

(b)

Loan Document. This Fifth Amendment and each agreement, instrument, certificate or document executed by the Borrower or any other Loan Party or any of its or their respective officers in connection therewith are “Loan Documents” as defined and described in the Amended Credit Agreement and all of the terms and provisions of the Loan Documents relating to other Loan Documents shall apply hereto and thereto.

(c)

Counterparts. This Fifth Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Fifth Amendment by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

(d)

ENTIRE AGREEMENT. THIS FIFTH AMENDMENT, THE AMENDED CREDIT AGREEMENT, THE AMENDED COLLATERAL AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AND ENTIRE AGREEMENT RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE ADMINISTRATIVE AGENT OR ANY LENDER, ISSUING BANK OR SWINGLINE LENDER RELATIVE TO THE SUBJECT MATTER HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE OTHER LOAN DOCUMENTS.

(e)

GOVERNING LAW. THIS FIFTH AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(f) THE PROVISIONS OF SECTIONS 9.13 AND 9.17 OF THE AMENDED CREDIT AGREEMENT SHALL APPLY, MUTATIS MUTANDIS, TO THIS FIFTH AMENDMENT. THE PROVISIONS OF SECTION 8.07 (FIRST SENTENCE) AND SECTION 8.08 OF THE AMENDED CREDIT AGREEMENT SHALL APPLY, MUTATIS MUTANDIS, TO THIS FIFTH AMENDMENT, IT BEING UNDERSTOOD THAT THE PARTIES’ RESPECTIVE FINANCIAL ADVISORS INVOLVED IN THE ARRANGEMENT OF THIS FIFTH AMENDMENT SHALL ALSO BE ENTITLED TO RELY ON THE BENEFITS THEREOF.

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to be duly executed and delivered as of the date first written above.


AFFINION GROUP, INC., as Borrower

By:
Name:
Title:

[Signature Page—Fifth Amendment to Credit Agreement]


		AFFINION GROUP HOLDINGS, INC.
		AFFINION BRAZIL HOLDINGS I, LLC
		AFFINION BRAZIL HOLDINGS II, LLC
		AFFINION DATA SERVICES, INC.
		AFFINION DEVELOPMENTS, LLC
		AFFINION GROUP, LLC
		AFFINION INVESTMENTS II, LLC
		AFFINION PD HOLDINGS, INC.
		AFFINION PUBLISHING, LLC
		BREAKFIVE, LLC
		XXXXXXXX AGENCY, INC.
		CCAA, CORPORATION
		CONNEXIONS LOYALTY GLOBAL TRAVEL FULFILLMENT LLC
		CONNEXIONS LOYALTY TRAVEL SOLUTIONS LLC
		CONNEXIONS LOYALTY, INC.
		CONNEXIONS SM VENTURES, LLC
		CONNEXIONS SMV, LLC
		GLOBAL PROTECTION SOLUTIONS, LLC
		LIFT MEDIA, LLC
		LONG TERM PREFERRED CARE, INC.
		LOYALTY TRAVEL AGENCY LLC
		XXXXX CORP.
		TRAVELERS ADVANTAGE SERVICES, LLC
		TRILEGIANT AUTO SERVICES, INC.
		TRILEGIANT CORPORATION
		TRILEGIANT INSURANCE SERVICES, INC.
		TRILEGIANT RETAIL SERVICES, INC.
		WATCHGUARD REGISTRATION SERVICES, INC.
		WEBLOYALTY HOLDINGS, INC.
		XXXXXXXXXX.XXX, INC.

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AFFINION GROUP HOLDINGS, INC., ET AL. AMENDED AND RESTATED SUPPORT AGREEMENT March 4, 2019