ALLIANCE DATA SYSTEMS CORPORATION
LOYALTY MANAGEMENT GROUP CANADA INC.
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (herein,
the "AMENDMENT") is entered into as of March 23, 2000, between Alliance Data
Systems Corporation, a Delaware corporation (the "US BORROWER"), Loyalty
Management Group Canada Inc., an Ontario corporation (the "CANADIAN BORROWER";
the US Borrower and the Canadian Borrower being referred to herein individually
as "BORROWER" and collectively as the "BORROWERS"), Banks party to the Credit
Agreement (as such term is defined below), ▇▇▇▇▇▇ Guaranty Trust Company of New
York, as a Bank and in its capacity as outgoing Administrative Agent, Pledgee
and Collateral Agent (in such capacity, the "DEPARTING AGENT") and ▇▇▇▇▇▇ Trust
and Savings Bank, as a Bank and in its capacity as the new Administrative Agent,
Pledgee and Collateral Agent under the Credit Agreement (the "NEW AGENT" or the
"ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS
A. The Borrowers, the Departing Agent and the Banks entered into a
certain Amended and Restated Credit Agreement, dated as of July 24, 1998 and
amended and restated as of October 22, 1998 (as amended, restated, modified and
supplemented from time to time, the "CREDIT AGREEMENT"). All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement.
B. The Borrowers have requested that (i) the Departing Agent be
substituted with the New Agent as Administrative Agent, Swing Lender, Pledgee
and Collateral Agent under the relevant Credit Documents and (ii) the Banks
amend certain covenants and make certain other amendments to the Credit
Agreement, and the New Agent, the Departing Agent and the Banks party hereto are
willing to do so under the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. RESIGNATION OF ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK AS
ADMINISTRATIVE AGENT, PLEDGEE AND COLLATERAL AGENT AND REPLACEMENT
BY ▇▇▇▇▇▇ TRUST AND SAVINGS BANK.
Upon satisfaction of the conditions precedent set forth in Section 4
hereof, the Departing Agent shall cease to be the Administrative Agent under the
Credit Agreement and the other relevant Credit Documents, shall cease to be the
Pledgee under the Pledge Agreements and shall cease to be the Collateral Agent
under the other Security Documents and Credit Documents and, except as set forth
below, the Departing Agent shall have no further obligations as Administrative
Agent, Pledgee and Collateral Agent thereunder. In replacement of the Departing
Agent, the New Agent shall assume the role of the Administrative Agent under the
Credit Agreement and the other relevant Credit Documents, the Pledgee under the
Pledge Agreements and Collateral Agent under the other Security Documents and
Credit Documents and shall have
all the rights and, from and after the date this Amendment becomes effective,
obligations as Administrative Agent, Pledgee and Collateral Agent previously
held by the Departing Agent thereunder, PROVIDED that it is expressly
acknowledged and agreed that (x) the New Agent shall not be liable for any acts
or omissions of the Departing Agent and (y) the provisions of Article 8 of the
Credit Agreement (including without limitation the indemnity provisions of
Sections 8.5 and 8.6 of the Credit Agreement) shall inure to the benefit of (1)
the Departing Agent as to any actions taken or omitted to be taken by it while
it was Administrative Agent, Pledgee and Collateral Agent under the relevant
Credit Documents including without limitation all actions taken or to be taken
in furtherance of the transfer of agency to the New Agent, regardless of whether
such action is taken before or after the effectiveness thereof and (2) the New
Agent who shall be entitled to all of the rights of, and vested with the same
powers as, the Departing Agent (including without limitation all the powers of
the Administrative Agent, Pledgee and Collateral Agent) under the Credit
Documents prior to the date hereof. The parties hereto (i) consent to the
resignation of the Departing Agent as Administrative Agent under the Credit
Agreement and the other relevant Credit Documents, the Pledgee under the Pledge
Agreements and the Collateral Agent under the other Security Documents and
Credit Documents, (ii) consent to the New Agent as the successor Administrative
Agent under the Credit Agreement and the other relevant Credit Documents, the
successor Pledgee under the Pledge Agreements and the successor Collateral Agent
under the other Security Documents and Credit Documents and (iii) agree that all
references in the Credit Agreement, each other Credit Document and any other
instrument or document related or supplementary thereto to the Administrative
Agent, Pledgee or the Collateral Agent shall, upon the effectiveness hereof, be
deemed references to the New Agent. Furthermore and without limiting the
generality of the foregoing, by its execution hereto, the Departing Agent hereby
assigns the security interests and liens previously granted to it pursuant to
the Security Documents and its duties thereunder to the New Agent, as agent for
the Banks, including ▇▇▇▇▇▇ Guaranty Trust Company of New York in its capacity
as a Bank.
SECTION 2. REDUCTION OF TERM LOANS AND REVOLVING LOAN COMMITMENT.
Upon the satisfaction of the conditions precedent set forth in Section 4
hereof and the application of the proceeds of the Eligible IPO to the repayment
in full of the US Term Loans as contemplated by Section 4(d) hereof and required
under Section 2.11(A)(g) and 2.11(B)(c) of the Credit Agreement (as modified
hereby), Schedule I to the Credit Agreement shall be amended as set forth below.
Accordingly, the amount of each Bank's outstanding Term Loans and Revolving Loan
Commitment set forth opposite its name in the Pooled Assignment and Amendment
dated as of November 17, 1998 between the Borrowers, the "Existing Banks" and
the "New Banks" identified therein and the Departing Agent (or on an Assignment
and Assumption Agreement pursuant to Section 11.6 of the Credit Agreement, as
the case may be) shall be amended so as to reflect such Bank's outstanding Term
Loans and Revolving Loan Commitment as follows:
-2-
OUTSTANDING OUTSTANDING OUTSTANDING REVOLVING LOAN
BANK US TERM LOANS A TERM LOANS B TERM LOANS COMMITMENT
▇▇▇▇▇▇ Trust and
Savings Bank $0 $8,370,535.72 $0 $17,857,142.86
▇▇▇▇▇▇ Guaranty Trust
Company of New York $0 $4,185,267.86 $0 $19,675,044.66
First Union National Bank $0 $5,050,528.13 $0 $10,774,460.08
Bank One, NA $0 $5,050,528.13 $0 $10,774,460.08
Union Bank of
California, N.A. $0 $3,348,214.28 $0 $7,142,857.14
Archimedes Funding II,
Ltd. $0 $0 $7,350,000.00 $0
KZH ING-2 LLC $0 $0 $4,900,000.00 $0
KZH ING-3 LLC $0 $0 $2,450,000.00 $0
Pilgrim America High
Income Investments, Ltd. $0 $0 $4,800,000.00 $0
Pilgrim Prime Rate Trust $0 $837,053.57 $14,700,000.00 $1,785,714.29
The Huntington National
Bank $0 $4,255,784.69 $0 $9,079,007.32
Chase Bank of Texas, NA $0 $4,255,784.69 $0 $9,079,007.32
Barclays Bank PLC $0 $0 $0 $0
SunTrust Bank, Central
Florida, N.A. $0 $0 $0 $5,618,020.55
Archimedes Funding III,
Ltd. $0 $2,670,856.43 $0 $0
▇▇▇ ▇▇▇▇▇▇ Prime Rate
Income Trust $0 $3,850,446.41 $9,800,000.00 $8,214,285.71
Sequils-ING I (HBDGM),
Ltd. $0 $5,000,000.09 $0 $0
Pilgrim CLO 1999-1 Ltd. $0 $0 $5,000,000.00 $0
Total $0 $46,875,000.00 $49,000,000.00 $100,000,000.00
== ============== ============== ===============
-3-
SECTION 3. AMENDMENTS.
Upon the satisfaction of the conditions precedent set forth in Section 5
hereof, the Credit Agreement shall be and hereby is amended as follows:
3.1. All references in Section 1.1 and Section 8 of the Credit Agreement
to "▇▇▇▇▇▇ Guaranty Trust Company of New York" shall be deleted and "▇▇▇▇▇▇
Trust and Savings Bank" shall be substituted in lieu thereof.
3.2. The definitions of "Domestic Business Day" and "Prime Rate"
appearing in Section 1.1 of the Credit Agreement shall be amended by inserting
"and Chicago, Illinois" immediately after the references to "New York City"
appearing therein.
3.3. The definition of "Obligations" appearing in Section 1.1 of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:
"Obligations" means all (i) amounts owing to the
Administrative Agent, the Collateral Agent or any Bank pursuant to
the terms of this Agreement or any other Credit Document and (ii)
Derivatives Obligations of each "Assignor" (as such term is
defined in the Security Agreement) from time to time owed to a
Bank or an Affiliate of a Bank.
3.4. All references in the Credit Agreement to "New York City time" and
"New York time" shall be deleted and "Chicago, Illinois time" shall be
substituted in lieu thereof.
3.5. Section 1.1 of the Credit Agreement shall be amended by adding the
following new definitions thereto:
"Eligible IPO" means the proposed public offering of common stock
of the US Borrower to be consummated by no later than June 30, 2000
and to result in gross cash proceeds raised by the US Borrower of
not less than $250,000,000."
3.6. Section 2.3(b) and Section 2.12 of the Credit Agreement shall each
be amended by deleting the references to "funds immediately available in New
York City" appearing therein and inserting "funds immediately available in
Chicago, Illinois" in lieu thereof.
3.7. The first sentence of Section 2.11(B)(c) of the Credit Agreement
shall be amended by (i) adding "(1)" immediately before the reference to "in no
event" appearing therein and (ii) adding "and (2) all proceeds of the Eligible
IPO shall be applied (i) first to the aggregate outstanding principal amount of
the Subordinated Note and the WCAS Subordinated Note until such Notes are paid
in full and (ii) thereafter to repay the aggregate outstanding principal amount
of the US Term Loans until such Loans are repaid in full" immediately before the
period at the end thereof.
-4-
3.8. Section 6.10 of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
"Section 6.10. END OF FISCAL YEARS AND FISCAL QUARTERS. The US
Borrower shall cause its fiscal year, and shall cause each of its
Subsidiaries' fiscal years, to end on December 31 and shall cause
its and each of its Subsidiaries' fiscal quarters to coincide with
calendar quarters."
3.9. Sections 6.11, 6.12 and 6.13 of the Credit Agreement shall each be
amended and restated in their entirety to read as follows:
"Section 6.11. MINIMUM CONSOLIDATED EBITDA. The US Borrower will
not permit its Consolidated EBITDA for any period of four
consecutive fiscal quarters of the US Borrower, as determined for
such four-quarter period ending on the last day of any fiscal
quarter below, to be less than the respective amount set forth
opposite such fiscal quarter below:
Fiscal Quarter Ended Minimum Consolidated Ebitda
-------------------- ---------------------------
December 31, 1999 $75,000,000
March 31, 2000 $90,000,000
June 30, 2000 $90,000,000
September 30, 2000 $105,000,000
December 31, 2000 $105,000,000
March 31, 2001 $115,000,000
June 30, 2001 $115,000,000
September 30, 2001 $125,000,000
December 31, 2001 $125,000,000
March 31, 2002 $125,000,000
June 30, 2002 $125,000,000
September 30, 2002 $125,000,000
December 31, 2002 $125,000,000
March 31, 2003 $125,000,000
June 30, 2003 $125,000,000
September 30, 2003 $125,000,000
December 31, 2003 $125,000,000
March 31, 2004 $125,000,000
June 30, 2004 $125,000,000
September 30, 2004 $125,000,000
December 31, 2004 $125,000,000
-5-
Fiscal Quarter Ended Minimum Consolidated EBITDA
-------------------- ---------------------------
March 31, 2005 $125,000,000
June 30, 2005 $125,000,000
Each fiscal quarter thereafter $125,000,000
Section 6.12. LEVERAGE RATIO. The US Borrower shall not permit its
Leverage Ratio at any time during any fiscal quarter of the US
Borrower to exceed 4.0:1.0.
Section 6.13. ADJUSTED CONSOLIDATED NET WORTH. The US Borrower
will not permit its Adjusted Consolidated Net Worth to be less
than the sum of (i) $600,000,000, plus (ii) an amount equal to 50%
of the amount by which the US Borrower's quarterly Consolidated
Net Income (determined at the end of each fiscal quarter
commencing with the US Borrower's fiscal quarter ending on or
about June 30, 2000) exceeds zero, plus (iii) 100% of any proceeds
from equity issuances of capital stock of the US Borrower
consummated after the date of the Eligible IPO (other than in
connection with exercises of stock options of the officers,
directors and employees of the US Borrower in the ordinary course
of business)."
3.10. Section 6.17 of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
"Section 6.17 INTEREST COVERAGE RATIO. The US Borrower will not
permit its Interest Coverage Ratio for any period of four
consecutive fiscal quarters, as determined for such four-quarter
period ending on the last day of any fiscal quarter, to be less
than 3.0:1.0."
3.11. Section 11.1 of the Credit Agreement shall be amended by (i)
deleting the reference to "or the Administrative Agent" appearing therein and
(ii) deleting the reference to "the signature pages hereof" appearing therein
and inserting "the signature pages hereof and, in the case of the Administrative
Agent, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇."
3.12. Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇ and A-5 and Schedule II of the Credit
Agreement shall each be amended and restated in their entirety to read as set
forth on Annexes I, II, III, IV, V and VI respectively to this Amendment.
-6-
SECTION 4. CONDITIONS PRECEDENT.
The effectiveness of this Amendment shall be subject to the satisfaction
of the following conditions precedent:
(a) The Borrowers, the Guarantors, the Departing Agent, the New
Agent and the Required Banks shall have executed and delivered this
Amendment. With respect to the amendment set forth in Section 3.5 hereof,
the Majority Banks of each of the Tranches comprising the US Term Loans,
A Term Loans and B Term Loans shall also have executed and delivered this
Amendment.
(b) The New Agent shall have received for delivery to the
applicable Banks new Notes in the forms of Annexes II, III, IV and V to
this Amendment payable to the order of each applicable Bank, such new
Notes to constitute "NOTES" for all purposes of the Credit Agreement upon
the New Agent's receipt of the same for each Bank.
(c) The US Borrower shall have paid, in accordance with the terms
of a Fee Letter by the US Borrower to the Banks dated as of March 22,
2000, to the New Agent (for the account of each Bank which joins in this
Amendment by the time and date contemplated in such Fee Letter) an
amendment fee in an amount equal to 0.125% of the sum of such Bank's
outstanding Term Loans plus such Bank's Revolving Loan Commitment, in
each case before giving effect to this Amendment.
(d) The Eligible IPO (as defined in Section 3.5 hereof) shall have
become effective and the US Borrower shall have irrevocably authorized
and directed that the proceeds of the Eligible IPO be applied as
prepayments required under Section 2.11(A)(g) and Section 2.11(B)(c) of
the Credit Agreement (as modified hereby).
(e) The New Agent shall have received an amendment or assignment
to each Credit Document (including without limitation the Security
Documents and all financing statements and other collateral filings in
connection therewith) requested by the New Agent and reflecting, INTER
ALIA, the changes in the Administrative Agent, Pledgee and the Collateral
Agent contemplated hereby, each to be satisfactory to the New Agent as to
form and substance.
(f) The New Agent shall be in receipt of one or more certificates
of insurance (naming the New Agent, as Collateral Agent, loss payee and
additional insured) to the extent such insurance is required under the
terms of a Credit Document.
(g) The US Borrower shall have delivered to the New Agent a
certificate of good standing or foreign equivalent, as appropriate, for
each Borrower from the jurisdiction of its incorporation dated no earlier
than March 15, 2000.
(h) All legal matters incident to the execution and delivery of
this Amendment and the instruments and documents contemplated hereby
shall be satisfactory to the Banks and their counsel; and the New Agent
shall have received (with a signed copy for each Bank): (1) the signed
Certificate of the Secretary or an Assistant Secretary of each
-7-
Credit Party, dated the date hereof, certifying (A) a true and correct
copy of resolutions adopted by the Board of Directors of each Credit
Party authorizing or ratifying the transactions and instruments
contemplated hereby and (B) the incumbency and specimen signatures of
officers of each Credit Party executing the documents referred to in
Section 4 hereof and any other documents delivered to the New Agent in
connection with this Amendment and (2) an opinion of counsel to the
Borrowers, in form and substance satisfactory to the New Agent and its
counsel, covering the transactions contemplated hereby.
(i) The New Agent shall have received copies executed or certified
(as may be appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of the Credit Documents and
this Amendment and the other instruments and documents contemplated
thereby.
SECTION 5. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this Amendment, each
Borrower hereby represents to each Bank that as of the date hereof, after giving
effect to this Amendment, the representations and warranties set forth in
Section 5 of the Credit Agreement are and shall be and remain true and correct
(except that the representations contained in Section 5.4 shall be deemed to
refer to the most recent financial statements of each Borrower delivered to the
Administrative Agent) and, after giving effect to this Amendment, (i) each
Borrower is in full compliance with all of the terms and conditions of the
Credit Agreement and (ii) no Default or Event of Default has occurred and is
continuing under the Credit Agreement.
SECTION 6. MISCELLANEOUS.
(a) Each Borrower and Guarantor has heretofore executed and delivered to
the Administrative Agent and the Banks certain Security Documents and the other
Credit Documents and each Borrower and Guarantor hereby acknowledges and agrees
that, notwithstanding the execution and delivery of this Amendment, the Security
Documents and the other Credit Documents remain in full force and effect and the
rights and remedies of the Administrative Agent, the Pledgee and the Collateral
Agent and the Banks thereunder, the obligations of each Borrower and Guarantor
thereunder and the liens and security interests created and provided for
thereunder remain in full force and effect and shall not be affected, impaired
or discharged hereby. Nothing herein contained shall in any manner affect or
impair the priority of the liens and security interests created and provided for
by the Security Documents and the other Credit Documents as to the indebtedness
which would be secured thereby prior to giving effect to this Amendment.
(b) Except as specifically amended herein or waived hereby, the Credit
Agreement shall continue in full force and effect in accordance with its
original terms. Reference to this specific Amendment need not be made in the
Credit Agreement, the Notes, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any
of such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
-8-
(c) Each Bank agrees to return to the Borrowers, promptly after the
effectiveness hereof, the existing Notes heretofore issued to each Bank (or such
lost note affidavits as may reasonably be satisfactory to the Borrowers).
(d) The Borrowers agree to pay on demand all reasonable costs and
expenses of or incurred by the Departing Agent and the New Agent in connection
with the negotiation, preparation, execution and delivery of this Amendment.
(e) By signing below, each Bank hereby (i) appoints and authorizes ▇▇▇▇▇▇
Trust and Savings Bank to take such action as Administrative Agent, Pledgee and
Collateral Agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent, Pledgee and the Collateral Agent by the terms thereof, together with such
powers as are reasonably incidental thereto and (ii) consents to the taking of
all actions reasonably deemed necessary or desirable by the Departing Agent and
the New Agent to effect the foregoing.
(f) This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the laws of the State of New York.
[SIGNATURE PAGES TO FOLLOW]
-9-
Dated as of March 23, 2000.
ALLIANCE DATA SYSTEMS CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
LOYALTY MANAGEMENT GROUP
CANADA INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
Accepted and agreed to as of the date and year last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, in its
individual capacity as a Bank, as
the New Agent and as the
Administrative Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
-10-
Acknowledged and agreed to as of the date last above written. Upon the
execution and delivery of this Amendment by each of the parties hereto and
satisfaction of the conditions set forth in Section 5 above, the Departing Agent
further agrees to: (i) deliver to the New Agent the Collateral in the Departing
Agent's possession, to be thereafter held by the New Agent as collateral
security for the Obligations, and such executed original counterparts of the
Credit Agreement, the Security Documents and each other Credit Document and all
amendments, modifications and waivers entered into or otherwise delivered in
connection therewith, together with copies of all resolutions, good standing
certificates, organizational documents, regulatory approvals and opinion letters
delivered in connection therewith as may be in the possession of the Departing
Agent, (ii) deliver to the New Agent original file stamped copies of all UCC
financing statements (and their comparable equivalents for purposes of the
Canadian Security Documents) in the Departing Agent's possession that were filed
in connection with the Security Documents, together with all amendments,
assignments and continuations thereof, (iii) execute and deliver to the New
Agent UCC-3 assignment filings prepared by the New Agent, the Borrowers or their
respective counsels (and their comparable equivalents for purposes of the
Canadian Security Documents) assigning to the New Agent all rights, title and
interest in each financing statement running in favor of the Departing Agent
that were filed in connection with the Security Documents and (iv) execute and
deliver, at the expense of the US Borrower, such other instruments and documents
prepared by the New Agent, the Borrowers or their respective counsels, including
additional instruments of assignment and/or transfer, as the Borrowers or the
New Agent may reasonably request to more fully vest in the New Agent the rights
of the Departing Agent with respect to the Obligations and the Collateral.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, in its capacity as the
Departing Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By:______________________________________
Name:____________________________________
Title:___________________________________
FIRST UNION NATIONAL BANK
By:______________________________________
Name:____________________________________
Title:___________________________________
BANK ONE, NA
By:______________________________________
Name:____________________________________
Title:___________________________________
UNION BANK OF CALIFORNIA, N.A.
By:______________________________________
Name:____________________________________
Title:___________________________________
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By:______________________________________
Name:____________________________________
Title:___________________________________
KZH ING-2 LLC
By:______________________________________
Name:____________________________________
Title:___________________________________
KZH ING-3 LLC
By:______________________________________
Name:____________________________________
Title:___________________________________
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ HIGH INCOME
INVESTMENTS, LTD.
By: Pilgrim Investments, Inc.,
as its Investment Manager
By:______________________________________
Name:____________________________________
Title:___________________________________
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc.,
as its Investment Manager
By:______________________________________
Name:____________________________________
Title:___________________________________
THE HUNTINGTON NATIONAL BANK
By:______________________________________
Name:____________________________________
Title:___________________________________
CHASE BANK OF TEXAS, NA
By:______________________________________
Name:____________________________________
Title:___________________________________
BARCLAYS BANK PLC
By:______________________________________
Name:____________________________________
Title:___________________________________
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:______________________________________
Name:____________________________________
Title:___________________________________
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By:______________________________________
Name:____________________________________
Title:___________________________________
-▇▇-
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By:______________________________________
Name:____________________________________
Title:___________________________________
SEQUILS-ING I (HBDGM), LTD.
By:______________________________________
Name:____________________________________
Title:___________________________________
PILGRIM CLO 1999-1 LTD.
By: Pilgrim Investments, Inc.,
as its Investment Manager
By:______________________________________
Name:____________________________________
Title:___________________________________
-14-
GUARANTORS' CONSENT
By their execution of the Credit Agreement, the undersigned have
heretofore guaranteed certain Guaranteed Obligations under Article 10 of the
Credit Agreement. Each of the undersigned hereby consents to the Amendment to
the Credit Agreement as set forth above and confirms that all of each of the
undersigned's obligations as a Guarantor remain in full force and effect. The
undersigned further agree that the consent of the undersigned to any further
amendments to the Credit Agreement shall not be required as a result of this
consent having been obtained.
ADS ALLIANCE DATA SYSTEMS, INC.
By:
Name:_________________________________
Title:________________________________
ADS COMMERCIAL SERVICES, INC.
By:
Name:_________________________________
Title:________________________________
HARMONIC TECHNOLOGY LICENSING, INC.
By:
Name:_________________________________
Title:________________________________
-15-
ANNEX I
EXHIBIT ▇-▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
------ --, ----
For value received, Alliance Data Systems Corporation, a Delaware
corporation (the "BORROWER"), promises to pay to the order of ▇▇▇▇▇▇ Trust and
Savings Bank (the "ADMINISTRATIVE AGENT"), for the account of the [Name of Bank]
(the "BANK"), the unpaid principal amount of each US Term Loan made by the Bank
to the Borrower pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such US Term Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of ▇▇▇▇▇▇ Trust and
Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
All US Term Loans made by the Bank, the respective types thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such US Term Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED, that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the US Term Notes referred to in the Credit
Agreement dated as of July 24, 1998 among Alliance Data Systems Corporation,
Loyalty Management Group Canada Inc. (f/k/a 1302598 Ontario Inc.), the Banks
parties thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative Agent (as
the same may be amended, restated or supplemented from time to time, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
ALLIANCE DATA SYSTEMS CORPORATION
By:______________________________________
Name:_________________________________
Title:________________________________
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
ANNEX II
EXHIBIT A-2
A TERM NOTE
Chicago, Illinois
------ --, ----
For value received, Loyalty Management Group Canada Inc. (f/k/a
1302598 Ontario Inc.), an Ontario corporation (the "Borrower"), promises to pay
to the order of ▇▇▇▇▇▇ Trust and Savings Bank (the "ADMINISTRATIVE AGENT"), for
the account of the [Name of Bank] (the "BANK"), the unpaid principal amount of
each A Term Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of each such A Term Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
All A Term Loans made by the Bank, the respective types thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such A Term Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED, that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the A Term Notes referred to in the Credit
Agreement dated as of July 24, 1998 among Alliance Data Systems Corporation,
Loyalty Management Group Canada Inc. (f/k/a 1302598 Ontario Inc.), the Banks
parties thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative Agent (as
the same may be amended, restated or supplemented from time to time, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
LOYALTY MANAGEMENT GROUP CANADA INC.
By:______________________________________
Name:_________________________________
Title:________________________________
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
ANNEX III
EXHIBIT ▇-▇
▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
------ --, ----
For value received, Loyalty Management Group Canada Inc. (f/k/a
1302598 Ontario Inc.), an Ontario corporation (the "BORROWER"), promises to pay
to the order of ▇▇▇▇▇▇ Trust and Savings Bank (the "ADMINISTRATIVE AGENT"), for
the account of the [Name of Bank] (the "BANK"), the unpaid principal amount of
each B Term Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of each such B Term Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
All B Term Loans made by the Bank, the respective types
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such B Term Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; PROVIDED, that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the B Term Notes referred to in the Credit
Agreement dated as of July 24, 1998 among Alliance Data Systems Corporation,
Loyalty Management Group Canada Inc. (f/k/a 1302598 Ontario Inc.), the Banks
parties thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative Agent (as
the same may be amended, restated or supplemented from time to time, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
LOYALTY MANAGEMENT GROUP CANADA INC.
By:______________________________________
Name:_________________________________
Title:________________________________
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
ANNEX IV
EXHIBIT A-4
REVOLVING NOTE
Chicago, Illinois
------ --, ----
For value received, Alliance Data Systems Corporation, a Delaware
corporation (the "BORROWER"), promises to pay to the order of ▇▇▇▇▇▇ Trust and
Savings Bank (the "ADMINISTRATIVE AGENT"), for the account of the [Name of Bank]
(the "BANK"), the unpaid principal amount of each Revolving Loan made by the
Bank to the Borrower pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Revolving Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of ▇▇▇▇▇▇ Trust and
Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
All Revolving Loans made by the Bank, the respective types
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Revolving Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; PROVIDED, that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Revolving Notes referred to in the
Credit Agreement dated as of July 24, 1998 among Alliance Data Systems
Corporation, Loyalty Management Group Canada Inc. (f/k/a 1302598 Ontario Inc.),
the Banks parties thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative
Agent (as the same may be amended, restated or supplemented from time to time,
the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement for provisions
for the prepayment hereof and the acceleration of the maturity hereof.
ALLIANCE DATA SYSTEMS CORPORATION
By:______________________________________
Name:_________________________________
Title:________________________________
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
ANNEX V
EXHIBIT A-5
SWING NOTE
Chicago, Illinois
----- --, ----
For value received, Alliance Data Systems Corporation, a Delaware
corporation (the "BORROWER"), promises to pay to the order of ▇▇▇▇▇▇ Trust and
Savings Bank (the "ADMINISTRATIVE AGENT"), for its own account as Swing Lender
under the Credit Agreement (in such capacity, the "BANK"), the unpaid principal
amount of each Swing Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Swing Loan on the dates and at the rate or rates provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
All Swing Loans made by the Bank, the respective types thereof and
all repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Swing Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED, that the failure of the Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Swing Notes referred to in the Credit
Agreement dated as of July 24, 1998 among Alliance Data Systems Corporation,
Loyalty Management Group Canada, Inc., (f/k/a 1302598 Ontario Inc.), the Banks
parties thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative Agent (as
the same may be amended, restated or supplemented from time to time, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
ALLIANCE DATA SYSTEMS CORPORATION
By:______________________________________
Name:_________________________________
Title:________________________________
LOANS AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
-2-
ANNEX VI
SCHEDULE II
ALLIANCE DATA SYSTEMS CORPORATION
INVESTMENT POLICY
STATEMENT OF PURPOSE
The purpose of this policy is to institute proper guidelines for the
ongoing management of the cash investments of Alliance Data Systems
Corp. and its subsidiaries.
INVESTMENT OBJECTIVES
The assets are to be invested in a manner, which preserves capital,
provides adequate liquidity, maintains appropriate diversification and
generates returns relative to these guidelines and prevailing market
conditions. The intent is that all of the investments shall be held to
maturity.
RESPONSIBILITIES
A. It is the responsibility of the Board of Directors of the Company to
adopt the Investment Policy.
B. It is the responsibility of the Treasurer or the Chief Financial
Officer to implement the Investment Policy of the Company including the
direction of purchases and sales of securities.
C. The approval of either the Treasurer or the Chief Financial Officer
shall be required to transfer Company funds to Company banks or
investment accounts.
D. The Treasurer and Chief Financial Officer may employ the services of a
Bank or a Registered Investment Advisor to direct a portion or all of
the investment activities of the Company consistent with the guidelines
set forth in the Investment Policy. The firms selected must maintain a
net worth of at least $1 billion.
E. The Treasurer and Chief Financial Officer will monitor ongoing
investment activities to insure that proper liquidity is being
maintained and that the investment strategy is consistent with the
Company objectives.
F. The Treasurer or the Chief Financial Officer will report to the Board
of Directors quarterly concerning the investment performance during the
most recent quarter.
-2-
ALLIANCE DATA SYSTEMS CORPORATION AND SUBSIDIARIES
INVESTMENT GUIDELINES
A. APPROPRIATE INVESTMENTS
1. Direct obligations of the U.S. or Canadian Treasury including
Treasury Bills, Notes and Bonds. Canadian Government Debt must be
rated A or better.
2. Federal Agency Securities which carry the direct or implied
guarantee of the U.S. Government including Government National
Mortgage Association, Federal Home Loan Bank, Federal Farm Credit
Bank, Federal National Mortgage Association, Student Loan
Marketing Association, and World Bank. Investments can include
Notes, Discount Notes, Medium Term Notes and Floating Rate Notes.
3. Certificates of Deposit, Guaranteed Investment Contracts, Banker's
Acceptance and Time Deposits including Eurodollar denominated and
Yankee issues. Investments will be limited to those institutions
with total assets in excess of $1 billion and which carry a short
term rating of "A2" or "P2" or "F2" or better, or a ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ rating of at least "A" or better.
4. Corporate Securities (including commercial paper or loan
participations) and corporate debt instruments (including medium
term notes and floating rate notes) issued by Canadian or U.S.
corporations and carry a minimum long term rating of "A" or short
term rating of "A2" or "P2" or "F2" or better.
5. Tax Exempt Securities including municipal notes, commercial paper,
auction rate floaters, and floating rate notes rated A2 or P2 or
F2 or better; Municipal Notes rated SP-2/MIG-2/VMIG-2 or better,
or a long term rating of "A" or better.
6. Auction rate preferred stock or bonds issued with a rate reset
mechanism and a maximum term of 180 days. Investment will be
limited to those issuers who have a minimum long term rating of
"A" or short term rating of "A2" or "P2" or "F2" or better.
7. Money market mutual funds, which offer daily purchase and
redemption and maintain a constant share price (no equities
allowed).
8. Repurchase agreements. The underlying collateral (of at least
102%) shall consist of US Government obligations and/or government
agency securities. Investments in repurchase agreements may not
exceed 3 days.
-3-
B. INVESTMENT CONCENTRATION LIMITS
1. Investments rated AAA (long term) or A1 (short term) or
equivalent - no limit.
2. Investments rated AA or equivalent - not to exceed 70% of total
portfolio.
3. Investments rated A (long term) or A2 (short term) or equivalent -
not to exceed 30% of total portfolio.
4. Bank or Insurance Company obligations - not to exceed 50% of total
portfolio.
5. Money Market Mutual Funds - no limit.
6. Repurchase Agreements - 30% of total portfolio.
7. No individual investment shall be in excess of $10 million.
MATURITY LIMITS
1. No investments may exceed 5 years to maturity.
2. Commercial Paper/Loan Participations/Master Notes may not exceed
180 days.
3. A minimum of 30% of the portfolio must have a maturity of 1 year or
less.
SAFEKEEPING
All securities firms with whom the Company does business must be
qualified to safekeep securities on the Company's behalf at no charge.
The CFO or Treasurer will authorize these firms to hold securities.
WAIVERS
In certain circumstances the appropriate investment criteria and
portfolio concentration limits may be temporarily waived by the Chief
Financial Officer for a period not to exceed four (4) weeks. Any
waivers granted during a fiscal year will be reported to the ADS Board
of Directors annually.
INVESTMENT POLICY REVIEW
THIS POLICY WILL BE REVIEWED ANNUALLY BY THE CFO AND TREASURER TO ENSURE THAT IT
REMAINS CONSISTENT WITH THE FINANCIAL OBJECTIVES OF THE COMPANY AND CURRENT
MARKET CONDITIONS.
-4-
