EXHIBIT 10.1
EXECUTION COPY
 
 
ALLIANCE DATA SYSTEMS CORPORATION
$500,000,000
Senior Notes
$250,000,000 6.00% Senior Notes, Series A, due May 16, 2009
$250,000,000 6.14% Senior Notes, Series B, due May 16, 2011
 
NOTE PURCHASE AGREEMENT
 
Dated as of May 1, 2006
 
 
SERIES A PPN: 018581 A* 9
SERIES B PPN: 018581 A@ 7

 

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TABLE OF CONTENTS

                  Section           Page   1.   AUTHORIZATION OF NOTES.     1  
 
  1.1   Description of Notes to be Issued.     1  
 
  1.2   Subsidiary Guaranty.     1  
 
                2.   SALE AND PURCHASE OF NOTES.     2  
 
                3.   CLOSING.     2  
 
                4.   CONDITIONS TO CLOSING.     2  
 
  4.1   Representations and Warranties.     2  
 
  4.2   Performance; No Default.     3  
 
  4.3   Compliance Certificates.     3  
 
  4.4   Opinions of Counsel.     3  
 
  4.5   Purchase Permitted By Applicable Law, etc.     3  
 
  4.6   Sale of Other Notes.     4  
 
  4.7   Payment of Special Counsel Fees.     4  
 
  4.8   Private Placement Numbers.     4  
 
  4.9   Changes in Corporate Structure.     4  
 
  4.10   Funding Instructions.     4  
 
  4.11   Proceedings and Documents.     4  
 
                5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.     4  
 
  5.1   Organization; Power and Authority.     5  
 
  5.2   Authorization, etc.     5  
 
  5.3   Disclosure.     5  
 
  5.4   Organization and Ownership of Shares of Subsidiaries; Affiliates.     6
 
 
  5.5   Financial Statements; Material Liabilities.     7  
 
  5.6   Compliance with Laws, Other Instruments, etc.     7  
 
  5.7   Governmental Authorizations, etc.     7  
 
  5.8   Litigation; Observance of Statutes and Orders.     8  
 
  5.9   Taxes.     8  
 
  5.10   Title to Property; Leases.     9  
 
  5.11   Licenses, Permits, etc.     9  
 
  5.12   Compliance with ERISA.     9  
 
  5.13   Private Offering by the Company.     10  
 
  5.14   Use of Proceeds; Margin Regulations.     11  
 
  5.15   Existing Debt; Future Liens.     11  
 
  5.16   Foreign Assets Control Regulations, etc.     11  
 
  5.17   Status under Certain Statutes.     12  
 
  5.18   Environmental Matters.     12  
 
  5.19   Solvency.     13  
 
                6.   REPRESENTATIONS OF THE PURCHASERS.     13  

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  6.1   Purchase for Investment.     13  
 
  6.2   Source of Funds.     13  
 
                7.   INFORMATION AS TO COMPANY.     15  
 
  7.1   Financial and Business Information.     15  
 
  7.2   Officer’s Certificate.     17  
 
  7.3   Visitation.     18  
 
                8.   PREPAYMENT OF THE NOTES.     18  
 
  8.1   No Scheduled Prepayments.     18  
 
  8.2   Optional Prepayments with Make-Whole Amount.     19  
 
  8.3   Mandatory Offer to Prepay Upon Change of Control.     19  
 
  8.4   Allocation of Partial Prepayments.     21  
 
  8.5   Maturity; Surrender, etc.     21  
 
  8.6   Purchase of Notes.     21  
 
  8.7   Make-Whole Amount.     21  
 
                9.   AFFIRMATIVE COVENANTS.     23  
 
  9.1   Compliance with Law.     23  
 
  9.2   Insurance.     23  
 
  9.3   Maintenance of Properties.     23  
 
  9.4   Payment of Taxes and Claims.     24  
 
  9.5   Corporate Existence, etc.     24  
 
  9.6   Books and Records.     24  
 
  9.7   Subsidiary Guaranty; Release.     24  
 
  9.8   Pari Passu Ranking.     25  
 
  9.9   Security.     25  
 
                10.   NEGATIVE COVENANTS.     26  
 
  10.1   Senior Debt; Consolidated Debt.     26  
 
  10.2   Interest Coverage.     27  
 
  10.3   Capitalization of Insured Subsidiaries.     27  
 
  10.4   Priority Debt.     27  
 
  10.5   Liens.     27  
 
  10.6   Subsidiary Debt.     29  
 
  10.7   Mergers, Consolidations, etc.     30  
 
  10.8   Sale of Assets.     30  
 
  10.9   Nature of Business.     31  
 
  10.10   Transactions with Affiliates.     31  
 
  10.11   Terrorism Sanctions Regulations.     32  
 
                11.   EVENTS OF DEFAULT.     32  
 
                12.   REMEDIES ON DEFAULT, ETC.     34  
 
  12.1   Acceleration.     34  
 
  12.2   Other Remedies.     35  
 
  12.3   Rescission.     35  

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  12.4   No Waivers or Election of Remedies, Expenses, etc.     35  
 
                13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.     36  
 
  13.1   Registration of Notes.     36  
 
  13.2   Transfer and Exchange of Notes.     36  
 
  13.3   Replacement of Notes.     37  
 
                14.   PAYMENTS ON NOTES.     37  
 
  14.1   Place of Payment.     37  
 
  14.2   Home Office Payment.     37  
 
                15.   EXPENSES, ETC.     38  
 
  15.1   Transaction Expenses.     38  
 
  15.2   Survival.     38  
 
                16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.     38  
 
                17.   AMENDMENT AND WAIVER.     39  
 
  17.1   Requirements.     39  
 
  17.2   Solicitation of Holders of Notes.     39  
 
  17.3   Binding Effect, etc.     40  
 
  17.4   Notes held by Company, etc.     40  
 
                18.   NOTICES.     40  
 
                19.   REPRODUCTION OF DOCUMENTS.     41  
 
                20.   CONFIDENTIAL INFORMATION.     41  
 
                21.   SUBSTITUTION OF PURCHASER.     42  
 
                22.   MISCELLANEOUS.     42  
 
  22.1   Successors and Assigns.     42  
 
  22.2   Payments Due on Non-Business Days.     42  
 
  22.3   Accounting Terms.     43  
 
  22.4   Severability.     43  
 
  22.5   Construction.     43  
 
  22.6   Counterparts.     43  
 
  22.7   Governing Law.     43  
 
  22.8   Jurisdiction and Process; Waiver of Jury Trial.     43  
 
  22.9   Maximum Interest Payable.     44  

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SCHEDULE A
  —   Information Relating to Purchasers

SCHEDULE B
  —   Defined Terms
 
       
SCHEDULE 4.9
  —   Changes in Corporate Structure
SCHEDULE 5.3
  —   Disclosure Materials
SCHEDULE 5.4
  —   Subsidiaries; Ownership of Subsidiary Stock; Affiliates
SCHEDULE 5.4(d)
  —   Agreements Limiting Subsidiary Distributions
SCHEDULE 5.5
  —   Financial Statements
SCHEDULE 5.8
  —   Litigation
SCHEDULE 5.14
  —   Use of Proceeds
SCHEDULE 5.15
  —   Existing Debt
SCHEDULE 10.5
  —   Liens
SCHEDULE 10.6
  —   Subsidiary Debt
 
       
EXHIBIT 1(a)
  —   Form of Series A Note
EXHIBIT 1(b)
  —   Form of Series B Note
EXHIBIT 1.2
  —   Form of Subsidiary Guaranty
EXHIBIT 4.4(a)
  —   Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b)
  —   Form of Opinion of Special Counsel to the Purchasers

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ALLIANCE DATA SYSTEMS CORPORATION
17655 Waterview Parkway
Dallas, TX 75252
Phone: 972-348-5100
Fax: 972-348-5335
$250,000,000 6.00% Senior Notes, Series A, due May 16, 2009
$250,000,000 6.14% Senior Notes, Series B, due May 16, 2011
Dated as of May 1, 2006
TO EACH OF THE PURCHASERS LISTED IN
     THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
          ALLIANCE DATA SYSTEMS CORPORATION, a Delaware corporation (the
“Company”), agrees with you as follows:

1.   AUTHORIZATION OF NOTES.   1.1   Description of Notes to be Issued.

          The Company has authorized the issue and sale of $500,000,000
aggregate principal amount of its Senior Notes consisting of (i) $250,000,000
aggregate principal amount of its 6.00% Senior Notes, Series A, due May 16, 2009
(the “Series A Notes”); and (ii) $250,000,000 aggregate principal amount of its
6.14% Senior Notes, Series B, due May 16, 2011 (the “Series B Notes” and,
together with the Series A Notes, the “Notes”, such term to include any such
Notes issued in substitution therefor pursuant to Section 13 of this Agreement).
The Notes shall be substantially in the form set out in Exhibits 1(a) and 1(b),
with such changes therefrom, if any, as may be approved by you, the Other
Purchasers of such Notes, or series thereof, and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.

1.2   Subsidiary Guaranty.

          Subject to Section 9.7, the payment by the Company of all amounts due
with respect to the Notes and the performance by the Company of its obligations
under this Agreement will be guaranteed by ADSI, any other Subsidiary that
hereafter becomes a co-obligor, borrower or guarantor under a U.S. Credit
Agreement and any other Domestic Subsidiary that becomes a co-obligor, borrower
or guarantor under the Credit Agreement (Canadian) (individually, a “Subsidiary
Guarantor” and collectively, the “Subsidiary Guarantors”), pursuant to the
Subsidiary Guaranty in substantially the form of the attached Exhibit 1.2, as it
hereafter may be amended or supplemented from time to time (the “Subsidiary
Guaranty”). Notwithstanding the foregoing, the provisions of this Section 1.2
shall not be

 

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applicable to Insured Subsidiaries, Qualified Securitization Subsidiaries and
Subsidiaries of Foreign Subsidiaries, Insured Subsidiaries and Qualified
Securitization Subsidiaries.

2.   SALE AND PURCHASE OF NOTES.

          Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and each of the other purchasers named in Schedule A
(the “Other Purchasers”), and you and the Other Purchasers will purchase from
the Company, at the Closing provided for in Section 3, Notes in the principal
amount and series specified opposite your names in Schedule A at the purchase
price of 100% of the principal amount thereof. Your obligation hereunder and the
obligations of the Other Purchasers are several and not joint obligations and
you shall have no obligation and no liability to any Person for the performance
or non-performance by any Other Purchaser hereunder.

3.   CLOSING.

          The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Foley & Lardner LLP, 321 North
Clark Street, Suite 2800, Chicago, Illinois 60610-4764, at 9:00 a.m., Chicago
time, at a closing (the “Closing”) on May 16, 2006 or on such other Business Day
thereafter on or prior to June 15, 2006 as may be agreed upon by the Company and
you and the Other Purchasers. The date or time of the Closing may be changed to
such other Business Day as may be agreed upon by the Company and the Purchasers.
At the Closing the Company will deliver to you the Notes to be purchased by you
in the form of a single Note (or such greater number of Notes in denominations
of at least $100,000 as you may request) dated the date of such Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds for
the account of the Company to account number 0189-1960617 at Huntington National
Bank, Columbus, Ohio, ABA number 044-000-024. If at the Closing the Company
shall fail to tender such Notes to you as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.

4.   CONDITIONS TO CLOSING.

          Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:

4.1   Representations and Warranties.

          The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.

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4.2   Performance; No Default.

          The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing, and, after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Section 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since December 31, 2005 that would have been prohibited by
Section 10 had such Section applied since such date.

4.3   Compliance Certificates.

      (a) Officer’s Certificate. The Company shall have delivered to you an
Officer’s Certificate, dated the date of Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
      (b) Secretary’s Certificates. The Company shall have delivered to you
certificates of its and each Subsidiary Guarantor’s Secretary or an Assistant
Secretary, dated the date of Closing, certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization, execution
and delivery of the Notes and this Agreement.

4.4   Opinions of Counsel.

          You shall have received opinions in form and substance satisfactory to
you, dated the date of such Closing (a) from Akin Gump Strauss Hauer & Feld LLP,
counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
you or your counsel may reasonably request (and the Company instructs its
counsel to deliver such opinion to you), and (b) from Foley & Lardner LLP, your
special counsel in connection with such transactions, substantially in the form
set forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.

4.5   Purchase Permitted By Applicable Law, etc.

          On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you in writing, you shall have received an
Officer’s Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.

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4.6   Sale of Other Notes.

          Contemporaneously with the Closing, the Company shall sell to the
Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them as specified in Schedule A.

4.7   Payment of Special Counsel Fees.

          Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the reasonable fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to such Closing.

4.8   Private Placement Numbers.

          Private Placement Numbers issued by Standard & Poor’s CUSIP Service
Bureau (in cooperation with the SVO) shall have been obtained by Foley & Lardner
LLP for each series of the Notes.

4.9   Changes in Corporate Structure.

          Except as set forth in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

4.10   Funding Instructions.

          At least three Business Days prior to the date of the Closing, you
shall have received written instructions signed by a Responsible Officer on
letterhead of the Company confirming the information specified in Section 3
including (i) the name and address of the transferee bank, (ii) such transferee
bank’s ABA number and (iii) the account name and number into which the purchase
price for the Notes is to be deposited.

4.11   Proceedings and Documents.

          All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          The Company represents and warrants to you that:

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5.1   Organization; Power and Authority.

          The Company is a corporation duly incorporated and validly existing
and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes and to perform the provisions hereof and
thereof.

5.2   Authorization, etc.

          This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
          The Subsidiary Guaranty has been duly authorized by all necessary
corporate action on the part of each Subsidiary Guarantor and upon execution and
delivery thereof will constitute the legal, valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
fraudulent transfer, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).

5.3   Disclosure.

          The Company, through its agent, J.P. Morgan Securities Inc., has
delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated April 2006 (the “Memorandum”), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. This Agreement, the Memorandum, the documents, certificates or
other writings identified in Schedule 5.3 by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, in each case, delivered to the Purchasers
prior to April 26, 2006 (this Agreement, the Memorandum and such documents,
certificates or other writings and such financial statements being referred to,
collectively, as the “Disclosure Documents”), taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since December 31, 2005, there has

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been no change in the financial condition, operations, business or properties of
the Company or any Subsidiary except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Disclosure Documents.

5.4   Organization and Ownership of Shares of Subsidiaries; Affiliates.

      (a) Schedule 5.4 contains (except as noted therein) complete and correct
lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, whether such
Subsidiary is a Material Domestic Subsidiary, a Foreign Subsidiary, an Insured
Subsidiary, a Qualified Securitization Subsidiary or a Subsidiary of a Foreign
Subsidiary, Insured Subsidiary or a Qualified Securitization Subsidiary, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) the
Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors
and senior officers.
      (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary (except as otherwise
disclosed in Schedule 5.4) free and clear of any Lien (except Liens under the
Pledge Agreements or as otherwise disclosed in Schedule 5.4).
      (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing or equivalent
status under the laws of its jurisdiction of organization, and is duly qualified
as a foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.
      (d) No Subsidiary is a party to, or otherwise subject to any legal,
regulatory, contractual or other restriction restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary other than (i) this Agreement, (ii) the agreements listed on Schedule
5.4(d), (iii) customary restrictions imposed by corporate law or similar
statutes, (iv) restrictions applicable to Qualified Securitization Subsidiaries
and Subsidiaries thereof, (v) restrictions applicable to Insured Subsidiaries
and Subsidiaries thereof required by law or by any Governmental Authority having
jurisdiction over Insured Subsidiaries, Subsidiaries thereof or any of their
respective businesses, (vi) customary supermajority voting provisions and other
customary provisions with respect to distributions, each

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contained in corporate charters, bylaws, stockholders’ agreements, limited
liability company agreements, partnership agreements, joint venture agreements
and similar agreements, and (vii) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business.

5.5   Financial Statements; Material Liabilities.

          The Company has delivered to you and each Other Purchaser copies of
the financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments and the
absence of footnotes). The Company and its Subsidiaries do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

5.6   Compliance with Laws, Other Instruments, etc.

          The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or, except as contemplated hereby, result in the
creation of any Lien in respect of any property of the Company or any Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
          The execution, delivery and performance by each Subsidiary Guarantor
of the Subsidiary Guaranty will not (i) contravene, result in any breach of, or
constitute a default under, or, except as contemplated hereby, result in the
creation of any Lien in respect of any property of such Subsidiary Guarantor
under, any agreement, or corporate charter or by-laws, to which such Subsidiary
Guarantor is bound or by which such Subsidiary Guarantor or any of its
properties may be bound or affected, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to such
Subsidiary Guarantor or (iii) violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to such Subsidiary
Guarantor.

5.7   Governmental Authorizations, etc.

          No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or

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performance by the Company of this Agreement or the Notes or the execution,
delivery or performance by each Subsidiary Guarantor of the Subsidiary Guaranty.
The foregoing representation is qualified to the extent that filings with
Governmental Authorities may be required of the Company and its Subsidiaries in
connection with their performance of their obligations under Sections 9.1
through 9.5, inclusive.

5.8   Litigation; Observance of Statutes and Orders.

      (a) Except as disclosed in Schedule 5.8, there are no actions, suits,
investigations or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any property of
the Company or any Subsidiary in any court or before any arbitrator of any kind
or before or by any Governmental Authority that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
      (b) Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including Environmental Laws and the USA Patriot Act) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Neither the Company (or any of its directors or officers) nor any Insured
Subsidiary (or any of its directors or officers) is a party to, or subject to,
any agreement with, or directive or order issued by, any federal or state bank
or thrift regulatory authority that imposes restrictions or requirements on it
which are not generally applicable to banks or thrifts; and no action or
administrative proceeding is pending or, to the Company’s knowledge, threatened
against the Company or any Insured Subsidiary or any of their directors or
officers that seeks to impose any such restriction or requirement.

5.9   Taxes.

          The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not,
individually or in the aggregate, Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been finally determined
(whether by reason of completed audits or the

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statute of limitations having run) for all fiscal years up to and including the
fiscal year ended December 31, 1998.

5.10   Title to Property; Leases.

          The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.

5.11   Licenses, Permits, etc.

      (a) The Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others.
      (b) To the best knowledge of the Company, no product of the Company or any
of its Subsidiaries infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person.
      (c) To the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, proprietary software, service mark, trademark,
trade name or other right owned or used by the Company or any of its
Subsidiaries.

5.12   Compliance with ERISA.

      (a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to section 401(a)(29) or 412 of the Code or section
4068 of ERISA, other than such liabilities or Liens as would not be individually
or in the aggregate Material.

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      (b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan’s most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by an amount that, individually, or in the
aggregate for all Plans, is Material. The term “benefit liabilities” has the
meaning specified in section 4001 of ERISA and the terms “current value” and
“present value” have the meaning specified in section 3 of ERISA.
      (c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
      (d) The expected postretirement benefit obligation (determined as of the
last day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
      (e) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
      (f) All Non-US Plans have been established, operated, administered and
maintained in compliance with all laws, regulations and orders applicable
thereto, except where failure so to comply could not be reasonably expected to
have a Material Adverse Effect. All premiums, contributions and any other
amounts required by applicable Non-US Plan documents or applicable laws to be
paid or accrued by the Company and its Subsidiaries have been paid or accrued as
required, except where failure so to pay or accrue could not be reasonably
expected to have a Material Adverse Effect.

5.13   Private Offering by the Company.

          Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you, the Other Purchasers and not more than 29 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act or to
the registration requirements of any securities or blue sky laws of any
applicable jurisdiction.

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5.14   Use of Proceeds; Margin Regulations.

          The Company will apply the proceeds of the sale of the Notes to
refinance Debt of the Company as set forth in Schedule 5.14 and for general
corporate purposes. No part of the proceeds from the sale of the Notes will be
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 1% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 1% of the value of such
assets. As used in this Section, the terms “margin stock” and “purpose of buying
or carrying” shall have the meanings assigned to them in said Regulation U.

5.15   Existing Debt; Future Liens.

      (a) Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Debt of the Company and its Subsidiaries as of
December 31, 2005 (including a description of the obligors and obligees,
principal amount outstanding and collateral therefor, if any, and guaranty
thereof, if any), since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Debt of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Debt of the Company or any
Subsidiary and no event or condition exists with respect to any Debt of the
Company or any Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.
      (b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
      (c) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other
agreement (including its charter or other organizational document) that limits
the amount of, or otherwise imposes restrictions on the incurring of, Debt of
the Company, except as specifically indicated in Schedule 5.15.

5.16   Foreign Assets Control Regulations, etc.

      (a) Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR,

11

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Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
      (b) Neither the Company nor any Subsidiary (i) is a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of the
Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(ii) to the Company’s knowledge, engages in any dealings or transactions with
any such Person. The Company and its Subsidiaries are in compliance, in all
material respects, with the USA Patriot Act.
      (c) No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming in all cases that such Act applies
to the Company.

5.17   Status under Certain Statutes.

          Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the ICC Termination Act, as
amended, or the Federal Power Act, as amended.

5.18   Environmental Matters.

      (a) Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.
      (b) Neither the Company nor any Subsidiary has knowledge of any facts that
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
      (c) Neither the Company nor any Subsidiary has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them and has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect.
      (d) All buildings on all real properties now owned, leased or operated by
the Company or any Subsidiary are in compliance with applicable Environmental
Laws, except where failure to comply could not reasonably be expected to result
in a Material Adverse Effect.

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5.19   Solvency.

          After giving effect to the transactions contemplated herein, (i) the
present fair salable value of the assets of each Subsidiary Guarantor is in
excess of the amount that will be required to pay its probable liability on its
existing debts as said debts become absolute and matured, (ii) each Subsidiary
Guarantor has received reasonably equivalent value for executing and delivering
the Subsidiary Guaranty, (iii) the property remaining in the hands of each
Subsidiary Guarantor is not an unreasonably small capital, and (iv) each
Subsidiary Guarantor is able to pay its debts as they mature.

6.   REPRESENTATIONS OF THE PURCHASERS.

6.1   Purchase for Investment.

          You represent that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.

6.2   Source of Funds.

          You represent that at least one of the following statements is an
accurate representation as to each source of funds (a “Source”) to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
      (a) the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
National Association of Insurance Commissioners (the “NAIC Annual Statement”))
for the general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10% of
the total reserves and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with your state of domicile; or
      (b) the Source is a separate account that is maintained solely in
connection with your fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate

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account (or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment performance of the
separate account; or
      (c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of PTE 91-38 (issued July 12,
1991) and, except as you have disclosed to the Company in writing pursuant to
this paragraph (c), no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective investment fund;
or
      (d) the Source constitutes assets of an “investment fund” (within the
meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan’s assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of “control” in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (d); or
      (e) the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(h) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or
      (f) the Source is a governmental plan; or
      (g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(g); or
      (h) the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA.

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As used in this Section 6.2, the terms “employee benefit plan”, “governmental
plan” and “separate account” shall have the respective meanings assigned to such
terms in Section 3 of ERISA.

7.   INFORMATION AS TO COMPANY.

7.1   Financial and Business Information.

               The Company will deliver to each holder of Notes that is an
Institutional Investor:
      (a) Quarterly Statements — within 60 days (or such shorter period as is 15
days greater than the period applicable to the filing of the Company’s Quarterly
Report on Form 10-Q (“Form 10-Q”) with the SEC regardless of whether the Company
is subject to the filing requirements thereof) after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the last quarterly
fiscal period of each such fiscal year), duplicate copies of,
      (i) a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarter, and
      (ii) consolidated statements of income, changes in stockholders’ equity
and cash flows of the Company and its Subsidiaries for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments and the absence of footnotes, provided that delivery within the time
period specified above of copies of the Company’s Form 10-Q prepared in
compliance with the requirements therefor and filed with the SEC shall be deemed
to satisfy the requirements of this Section 7.1(a) provided, further, that the
Company shall be deemed to have made such delivery of such Form 10-Q if it shall
have timely made Electronic Delivery thereof;
      (b) Annual Statements — within 120 days (or such shorter period as is
15 days greater than the period applicable to the filing of the Company’s Annual
Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the
Company is subject to the filing requirements thereof) after the end of each
fiscal year of the Company, duplicate copies of
      (i) a consolidated balance sheet of the Company and its Subsidiaries, as
at the end of such year, and

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      (ii) consolidated statements of income, changes in stockholders’ equity
and cash flows of the Company and its Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, provided that
the delivery within the time period specified above of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual
report to stockholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and filed
with the SEC shall be deemed to satisfy the requirements of this Section 7.1(b)
provided, further, that the Company shall be deemed to have made such delivery
of such Form 10-K if it shall have timely made Electronic Delivery thereof;
      (c) SEC and Other Reports — promptly upon their becoming available, one
copy of (i) each financial statement, report, notice or proxy statement sent by
the Company or any Subsidiary to its public securities holders generally and
(ii) each regular or periodic report, each registration statement (without
exhibits except as expressly requested by such holder), and each prospectus and
all amendments thereto filed by the Company or any Subsidiary with the SEC and
of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material; provided that timely Electronic Delivery of such documents shall be
deemed to satisfy the requirements of this Section 7.1(c);
      (d) Notice of Default or Event of Default — promptly, and in any event
within five Business Days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default hereunder or that
any Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11(f), a written notice specifying
the nature and period of existence thereof, whether or not the Company agrees
that any claimed default constitutes a Default or Event of Default, and what
action the Company is taking or proposes to take with respect thereto;
      (e) ERISA Matters — promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
        (i) with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof

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has not been waived pursuant to such regulations as in effect on the date
hereof; or
        (ii) the taking by the PBGC of steps to institute, or the threatening by
the PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
        (iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse Effect; and
      (f) Notices from Governmental Authority — promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
      (g) Requested Information — with reasonable promptness, and subject to
applicable privacy laws or regulations and contractual obligations, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries
(including actual copies of any documents previously delivered by means of
Electronic Delivery) or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of Notes.

7.2   Officer’s Certificate.

          Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) will be accompanied by a
certificate (which, in the case of Electronic Delivery of any such financial
statements, may be by separate concurrent delivery of such certificate to each
holder of Notes or by Electronic Delivery thereof) of a Senior Financial Officer
setting forth:
      (a) Covenant Compliance — the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.8,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum

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amount, ratio or percentage, as the case may be, permissible under the terms of
such Sections, and the calculation of the amount, ratio or percentage then in
existence); and
      (b) Event of Default — a statement that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made, under his
or her supervision, a review of the transactions and conditions of the Company
and its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the certificate
and that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default or,
if any such condition or event existed or exists (including any such event or
condition resulting from the failure of the Company or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to take with
respect thereto.

7.3   Visitation.

          The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
      (a) No Default — if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company during normal business hours, to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with the Company’s officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) to visit the other offices and properties of
the Company and each Material Subsidiary, all at such reasonable times and as
often as may be reasonably requested in writing; and
      (b) Default — if a Default or Event of Default then exists, at the expense
of the Company, to visit and inspect any of the offices or properties of the
Company or any Material Subsidiary during normal business hours, to examine all
their respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers and independent public accountants
(and by this provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Subsidiaries), all at such
times and as often as may be requested.

8.   PREPAYMENT OF THE NOTES.

8.1   No Scheduled Prepayments.

          No regularly scheduled prepayments are due on the Notes prior to their
stated maturity.

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8.2   Optional Prepayments with Make-Whole Amount.

      (a) Optional Prepayment by Series. The Company may, at its option, upon
notice as provided below, prepay at any time all, or from time to time any part
of, the Notes of any series in an amount not less than $2,000,000 in the
aggregate in the case of a partial prepayment, at 100% of the principal amount
so prepaid, and the Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date (which shall be a Business Day), the
aggregate principal amount of the Notes of such series to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes or the series to be prepaid a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
      (b) Prepayments During Defaults or Events of Defaults. Anything in Section
8.2(a) to the contrary notwithstanding, during the continuance of a Default or
Event of Default, the Company may prepay less than all of the outstanding Notes
pursuant to Section 8.2(a) only if such prepayment is allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.

8.3   Mandatory Offer to Prepay Upon Change of Control.

      (a) Notice of Change of Control or Control Event — The Company will,
within five Business Days after any Responsible Officer has knowledge of the
occurrence of any Change of Control or Control Event, give notice of such Change
of Control or Control Event to each holder of Notes unless notice in respect of
such Change of Control (or the Change of Control contemplated by such Control
Event) shall have been given pursuant to subparagraph (b) of this Section 8.3.
If a Change of Control has occurred, such notice shall contain and constitute an
offer to prepay Notes as described in paragraph (c) of this Section 8.3 and
shall be accompanied by the certificate described in paragraph (g) of this
Section 8.3.
      (b) Condition to Company Action — The Company will not take any action
that consummates or finalizes a Change of Control unless (i) at least 15
Business Days prior to such action it shall have given to each holder of Notes
written notice containing and constituting an offer to prepay Notes accompanied
by the certificate described in paragraph (g) of this Section 8.3, and
(ii) subject to the provisions of paragraph (d)

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below, contemporaneously with such action, it prepays all Notes required to be
prepaid in accordance with this Section 8.3.
      (c) Offer to Prepay Notes — The offer to prepay Notes contemplated by
paragraphs (a) and (b) of this Section 8.3 shall be an offer to prepay, in
accordance with and subject to this Section 8.3, all, but not less than all, of
the Notes held by each holder (in this case only, “holder” in respect of any
Note registered in the name of a nominee for a disclosed beneficial owner shall
mean such beneficial owner) on a date specified in such offer (the “Proposed
Prepayment Date”). If such Proposed Prepayment Date is in connection with an
offer contemplated by paragraph (a) of this Section 8.3, such date shall be not
less than 30 days and not more than 60 days after the date of such offer.
      (d) Acceptance; Rejection — A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance
to be delivered to the Company on or before the date specified in the
certificate described in paragraph (g) of this Section 8.3. A failure by a
holder of Notes to respond to an offer to prepay made pursuant to this
Section 8.3, or to accept an offer as to all of the Notes held by the holder,
within such time period shall be deemed to constitute rejection of such offer by
such holder.
      (e) Prepayment — Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment and shall not
require the payment of any Make-Whole Amount. The prepayment shall be made on
the Proposed Prepayment Date except as provided in paragraph (f) of this
Section 8.3.
      (f) Deferral Pending Change of Control — The obligation of the Company to
prepay Notes pursuant to the offers required by paragraphs (a) and (b) and
accepted in accordance with paragraph (d) of this Section 8.3 is subject to the
occurrence of the Change of Control in respect of which such offers and
acceptances shall have been made. In the event that such Change of Control does
not occur on or prior to the Proposed Prepayment Date in respect thereof, the
prepayment shall be deferred until and shall be made on the date on which such
Change of Control occurs. The Company shall keep each holder of Notes reasonably
and timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change of Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change of
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.3 in respect of such Change of Control shall be
deemed rescinded). Notwithstanding the foregoing, in the event that the
prepayment has not been made within 90 days after such Proposed Prepayment Date
by virtue of the deferral provided for in this Section 8.3(f), the Company shall
make a new offer to prepay in accordance with paragraph (c) of this Section 8.3.
      (g) Officer’s Certificate — Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment

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Date, (ii) that such offer is made pursuant to this Section 8.3, (iii) the
principal amount of each Note offered to be prepaid, (iv) the interest that
would be due on each Note offered to be prepaid, accrued to the Proposed
Prepayment Date, (v) that the conditions of this Section 8.3 have been
fulfilled, (vi) in reasonable detail, the nature and date or proposed date of
the Change of Control and (vii) the date by which any holder of a Note that
wishes to accept such offer must deliver notice thereof to the Company, which
date shall not be earlier than three Business Days prior to the Proposed
Prepayment Date or, in the case of a prepayment pursuant to Section 8.3(b), the
date of the action referred to in Section 8.3(b)(i).

8.4   Allocation of Partial Prepayments.

          In the case of each partial prepayment of Notes of a series pursuant
to Section 8.2, the principal amount of the Notes of such series to be prepaid
shall be allocated among all of the Notes of such series at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.

8.5   Maturity; Surrender, etc.

          In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day),
together with interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and canceled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.

8.6   Purchase of Notes.

          The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment or prepayment of Notes pursuant to any provision of this Agreement and
no Notes may be issued in substitution or exchange for any such Notes.

8.7   Make-Whole Amount.

          “Make-Whole Amount” means, with respect to any Note, an amount equal
to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

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          “Called Principal” means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
          “Discounted Value” means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
          “Reinvestment Yield” means, with respect to the Called Principal of
any Note, .50% over the yield to maturity implied by (i) the yields reported as
of 10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as “Page PX1” (or such other display as may replace Page PX1 on Bloomberg
Financial Markets (“Bloomberg”) or, if Page PX1 (or its successor screen on
Bloomberg) is unavailable, the Telerate Access Service screen which corresponds
most closely to Page PX1 for the most recently issued actively traded on-the-run
U.S. Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if such yields are
not reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater than such Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
maturity closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Note.
          “Remaining Average Life” means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
          “Remaining Scheduled Payments” means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Notes, then the
amount of the

22

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next succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Section 8.2 or 12.1.
          “Settlement Date” means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.

9.   AFFIRMATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are
outstanding:

9.1   Compliance with Law.

          Without limiting Section 10.11, the Company will, and will cause each
Subsidiary to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

9.2   Insurance.

          The Company will, and will cause each Subsidiary to, maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.

9.3   Maintenance of Properties.

          The Company will, and will cause each Subsidiary to, maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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9.4   Payment of Taxes and Claims.

          The Company will, and will cause each Subsidiary to, file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or such Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes, assessments and
claims in the aggregate could not reasonably be expected to have a Material
Adverse Effect.

9.5   Corporate Existence, etc.

          Subject to Section 10.7, the Company will at all times preserve and
keep in full force and effect its corporate existence. Subject to Sections 10.7
and 10.8, the Company will at all times preserve and keep in full force and
effect the corporate (or, as applicable, limited liability company) existence of
each Subsidiary (unless merged into the Company or a Wholly-Owned Subsidiary)
and all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

9.6   Books and Records.

          The Company will, and will cause each Subsidiary to, maintain proper
books of record and account in conformity with GAAP and all applicable
requirements of any Governmental Authority having legal or regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.

9.7   Subsidiary Guaranty; Release.

      (a) Subsidiary Guarantors. The Company will cause each (A) Subsidiary
that, on or after the date of the Closing, is or becomes a co-obligor, borrower
or guarantor of Debt in respect of a U.S. Credit Agreement or (B) Domestic
Subsidiary that, on or after the date of the Closing, is or becomes a
co-obligor, borrower or guarantor of Debt in respect of the Credit Agreement
(Canadian), on the date of the Closing or within 10 Business Days of its
thereafter becoming a co-obligor, borrower or a guarantor of Debt in respect of
a U.S. Credit Agreement or a co-obligor, borrower or guarantor of Debt in
respect of the Credit Agreement (Canadian), as the case may be, to become a
party to the Subsidiary Guaranty, and shall deliver to each holder:

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            (i) an executed counterpart of the Subsidiary Guaranty, or, if the
Subsidiary Guaranty has been previously executed and delivered, an executed
counterpart of a Joinder thereto;
            (ii) copies of such directors’ or other authorizing resolutions,
charter, bylaws and other constitutive documents of such Subsidiary as the
Required Holders may reasonably request; and
            (iii) an opinion of independent counsel reasonably satisfactory to
the Required Holders covering the authorization, execution, delivery, compliance
with law, no conflict with other documents, no consents and enforceability of
the Subsidiary Guaranty against such Subsidiary in form and substance reasonably
satisfactory to the Required Holders.
      (b) Release of Subsidiary Guarantor. Each holder of a Note fully releases
and discharges from the Subsidiary Guaranty a Subsidiary Guarantor, immediately
and without any further act, upon such Subsidiary Guarantor being released and
discharged as a co-obligor, borrower or guarantor under and in respect of each
U.S. Credit Agreement and, in the case of a Domestic Subsidiary, the Credit
Agreement (Canadian); provided that (i) no Default or Event of Default exists or
will exist immediately following such release and discharge; (ii) if any fee or
other consideration is paid or given to any holder of Debt under any of the U.S.
Credit Agreements or the Credit Agreement (Canadian) in connection with such
release, other than the repayment of all or a portion of such Debt under such
U.S. Credit Agreement or the Credit Agreement (Canadian), each holder of a Note
receives equivalent consideration on a pro rata basis; and (iii) at the time of
such release and discharge, the Company delivers to each holder of Notes a
certificate of a Responsible Officer certifying (x) that such Subsidiary
Guarantor has been or is being released and discharged as a co-obligor, borrower
or guarantor under and in respect of each of the U.S. Credit Agreements and, in
the case of a Domestic Subsidiary, the Credit Agreement (Canadian) and (y) as to
the matters set forth in clauses (i) and (ii). Any outstanding Debt of a
Subsidiary Guarantor shall be deemed to have been incurred by such Subsidiary
Guarantor as of the date it is released and discharged from the Subsidiary
Guaranty.

9.8   Pari Passu Ranking.

          The Debt evidenced by the Notes will at all times rank at least pari
passu with all senior unsecured Debt of the Company and on and at all times
after September 30, 2006 will rank at least pari passu with the Company’s Debt
under the U.S. Credit Agreements.

9.9   Security.

          Not later than September 30, 2006, the Company, each relevant
Subsidiary and each other party thereto, will either:
      (a) Deliver to each holder of Notes (i) an instrument or instruments, in
form reasonably satisfactory to the Required Holders, executed by Harris N.A.,
as collateral

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agent, acknowledging that each of the Pledge Agreements has been satisfied and
terminated and that the Intercreditor Agreement has been terminated and (ii) a
certificate of a Responsible Officer certifying that the Collateral Agent has
duly assigned, transferred and delivered to the Company and its Subsidiaries the
collateral subject to any Pledge Agreement; or
      (b) If any of the deliveries set forth in Section 9.9(a) has not occurred,
enter into (i) an amendment of the Intercreditor Agreement, in form and
substance reasonably satisfactory to the Required Holders, adding each holder of
Notes as a Senior Creditor under and as defined in such agreement and providing,
among other things, for the ratable sharing of all payments received by any
Senior Creditor following an Enforcement (as defined therein), so that the
holders of Notes are pari passu with all other Senior Creditors and (ii) an
amendment of the Pledge Agreement if it has not been satisfied and terminated,
in form and substance reasonably satisfactory to the Required Holders, adding
each holder of Notes as a Secured Creditor under and as defined in the Pledge
Agreement. The Intercreditor Agreement, as amended, will contain a provision
obligating each holder of Notes to direct the collateral agent to release the
interest of the holders in any collateral under the Pledge Agreement, if clause
(ii) applies, if the required holders of Debt under the U.S. Credit Agreements
release such collateral; provided that (i) no Default or Event of Default exists
or will exist immediately following such release and discharge; (ii) if any fee
or other consideration is paid or given to any holder of Debt under any of the
U.S. Credit Agreements in connection with such release, other than the repayment
of all or a portion of such Debt under such U.S. Credit Agreement, each holder
of a Note receives equivalent consideration on a pro rata basis and (iii) the
Intercreditor Agreement is terminated concurrently therewith or the sharing
mechanism contained in the Intercreditor Agreement is modified so that the
holders of Notes remain pari passu with all other Senior Creditors.

10.   NEGATIVE COVENANTS.

               The Company covenants that so long as any of the Notes are
outstanding:

10.1   Senior Debt; Consolidated Debt.

      The Company will not permit:
      (a) the ratio of Senior Debt (as of any date) to Consolidated Operating
EBITDA (for the Company’s most recently completed four fiscal quarters) to
exceed 2.75 to 1.00 at any time; and
      (b) the ratio of Consolidated Debt (as of any date) to Consolidated
Operating EBITDA (for the Company’s most recently completed four fiscal
quarters) to exceed 3.75 to 1.00 at any time.

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10.2   Interest Coverage.

          The Company will not permit the ratio of Consolidated Operating EBITDA
to Consolidated Interest Expense, in each case for the Company’s most recently
completed four fiscal quarters, to be less than 3.00 to 1.00 as of the end of
any fiscal quarter.

10.3   Capitalization of Insured Subsidiaries.

          The Company will at all times cause each Insured Subsidiary to be
“well capitalized” within the meaning of 12 C.F.R. 208.43(b)(1) or any successor
regulations and will not permit any Insured Subsidiary to be reclassified by any
Governmental Authority as anything other than “well capitalized” at any time.

10.4   Priority Debt.

          The Company will not create, assume, incur or suffer to be created,
assumed or incurred additional Priority Debt, if immediately thereafter,
Priority Debt exceeds 20% of Consolidated Net Worth as of the end of the most
recently completed fiscal quarter of the Company.

10.5   Liens.

          The Company will not, and will not permit any Subsidiary to, permit to
exist, create, assume or incur, directly or indirectly, any Lien on its
properties or assets, whether now owned or hereafter acquired, unless the Notes
are simultaneously equally and ratably secured by a Lien on the same property
and assets pursuant to an agreement or agreements reasonably acceptable to the
Required Holders, except:
      (a) Liens under the Pledge Agreements and Liens permitted by
Section 9.9(b);
      (b) Liens for taxes, assessments or governmental charges or levies not
then due and delinquent or the nonpayment of which is permitted by Section 9.4;
      (c) any attachment or judgment Lien not constituting a Default or Event of
Default under Section 11(i);
      (d) Liens incurred or deposits or pledges made in the ordinary course of
business (i) in connection with workers’ compensation, unemployment insurance
and other types of social security, (ii) to secure the payment or performance of
tenders, statutory or regulatory obligations, bids, leases, contracts (including
contracts to provide customer care services, billing services, transaction
processing services and other services), performance and return of money bonds
and other similar obligations, including letters of credit and bank guarantees
required or requested by the United States, any state thereof or any foreign
government or any subdivision, department, agency, organization or
instrumentality of any of the foregoing in connection with any contract or
statute (exclusive of obligations for the payment of borrowed money), or
(iii) for the

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benefit of the sponsor or its customers, to cover anticipated costs of future
redemptions of awards under loyalty marketing programs;
      (e) encumbrances in the nature of leases, subleases, zoning restrictions,
easements, rights of way, minor survey exceptions and other rights and
restrictions of record on the use of real property and defects in title arising
or incurred in the ordinary course of business, which, individually and in the
aggregate, do not materially detract from the value of such property or assets
subject thereto or materially impair the use of the property or assets subject
thereto by the Company or such Subsidiary;
      (f) Liens (other than those referred to in Section 10.5(a)) existing on
property or assets of the Company or any Subsidiary as of the date of this
Agreement that are described in Schedule 10.5;
      (g) Liens,
      (i) existing on property at the time of its acquisition by the Company or
a Subsidiary and not created in contemplation thereof, whether or not the Debt
secured by such Lien is assumed by the Company or a Subsidiary; or
      (ii) on property or in rights related thereto created contemporaneously
with its acquisition or within 180 days of the acquisition or completion of
construction or development thereof to secure or provide for all or a portion of
the purchase price or cost of the acquisition, construction or development of
such property after the date of the Closing; or
      (iii) existing on property of a Person at the time such Person is merged
or consolidated with, or becomes a Subsidiary of, or substantially all of its
assets are acquired by, the Company or a Subsidiary and not created in
contemplation thereof;
provided that in the case of each of clauses (i), (ii) and (iii) such Liens do
not extend to additional property of the Company or any Subsidiary (other than
property that is an improvement to or is acquired for specific use in connection
with the subject property) and that the aggregate principal amount of Debt
secured by each such Lien does not exceed the fair market value of the property
subject thereto (as determined in good faith by one or more officers of the
Company to whom authority to enter into the transaction has been delegated by
the board of directors);
      (h) Liens resulting from extensions, renewals or replacements of Liens
permitted by paragraphs (f) or (g) or this paragraph (h), provided that
(i) there is no increase in the principal amount or decrease in maturity of the
Debt secured thereby at the time of such extension, renewal or replacement other
than by the amount of related fees, costs, expenses and accrued but unpaid
interest on such Debt, (ii) any new Lien attaches only to the same property
theretofore subject to such earlier Lien and (iii) immediately after such
extension, renewal or replacement no Default or Event of Default would exist;

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      (i) Liens incurred in connection with a Qualified Securitization
Transaction;
      (j) Liens securing Debt of a Subsidiary owed to the Company or to a Wholly
Owned Subsidiary or of the Company owed to a Wholly Owned Subsidiary; and
      (k) Liens securing Debt not otherwise permitted by paragraphs (a) through
(j) of this Section 10.5, provided that, at the time of creation, assumption or
incurrence thereof, Priority Debt does not exceed 20% of Consolidated Net Worth
as of the end of the most recently completed fiscal quarter of the Company.
In each case set forth above, notwithstanding any stated limitation on the
assets that may be subject to such Lien, a permitted Lien on a specified asset
or group or type of assets may include Liens on all improvements, additions and
accessions thereto, property acquired for a specific use in connection
therewith, and all products and proceeds thereof and of any of the foregoing
(including, without limitation, dividends, distributions and increases in
respect thereof).

10.6   Subsidiary Debt.

          The Company will not permit any Subsidiary, directly or indirectly, to
at any time create, incur, assume, guarantee, have outstanding, or otherwise
become or remain directly or indirectly liable for, any Debt other than:
      (a) Debt of a Subsidiary Guarantor;
      (b) Debt outstanding (or permitted to be outstanding up to the full
$35 million in the case of the Credit Agreement (Canadian)) on the date of this
Agreement that is described on Schedule 10.6 and any extension, renewal,
refinancing or refunding thereof, provided that the principal amount thereof is
not increased other than by the amount of related fees, costs, expenses and
accrued but unpaid interest on such Debt;
      (c) Debt owed to the Company or a Wholly Owned Subsidiary;
      (d) Debt of a Person outstanding at the time it becomes a Subsidiary
provided that (i) such Debt was not incurred in contemplation of such Person’s
becoming a Subsidiary and (ii) immediately after such Person becomes a
Subsidiary no Default or Event of Default exists; and any extension, renewal or
refunding of such Debt, provided that the principal amount thereof is not
increased other than by the amount of related fees, costs, expenses and accrued
but unpaid interest on such Debt;
      (e) Debt of an Insured Subsidiary, consisting of certificates of deposit
or other similar items;
      (f) Debt not otherwise permitted by the preceding clauses (a) through (e),
provided that immediately after giving effect thereto and to the application of
the proceeds thereof,
      (i) no Default or Event of Default exists, and

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      (ii) Priority Debt does not exceed 20% of Consolidated Net Worth as of the
end of the most recently completed fiscal quarter of the Company.

10.7   Mergers, Consolidations, etc.

          The Company will not consolidate with or merge with any other Person
or convey, transfer, sell or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person unless:
      (a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer, sale or lease all or
substantially all of the assets of the Company as an entirety, as the case may
be, is a solvent corporation or limited liability company organized and existing
under the laws of the United States or any state thereof (including the District
of Columbia), and, if the Company is not such successor or survivor, such
corporation or limited liability company (i) shall have executed and delivered
to each holder of any Notes its assumption of the due and punctual performance
and observance of each covenant and condition of this Agreement and the Notes
and (ii) shall have caused to be delivered to each holder of any Notes an
opinion of nationally recognized independent counsel or other independent
counsel reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof; and
      (b) after giving effect to such transaction, no Default or Event of
Default shall exist.

10.8   Sale of Assets.

          Except as permitted by Section 10.7, the Company will not, and will
not permit any Subsidiary to, sell, lease, transfer or otherwise dispose of,
including by way of merger (collectively a “Disposition”), any assets, in one or
a series of transactions, to any Person, other than:
      (a) Dispositions in the ordinary course of business;
      (b) Dispositions by a Subsidiary to the Company or a Wholly Owned
Subsidiary or by the Company to a Wholly Owned Subsidiary;
      (c) Dispositions of accounts or notes receivable and rights related
thereto in a Qualified Securitization Transaction;
      (d) Dispositions not otherwise permitted by clauses (a), (b) or (c) of
this Section 10.8 provided that (i) the aggregate net book value of all assets
so disposed of in any fiscal year pursuant to this Section 10.8(d) does not
exceed 15% of Consolidated Total Assets as of the last day of the most recently
ended fiscal year and (ii) after giving effect to such transaction, no Default
or Event of Default shall exist.

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Notwithstanding the foregoing, the Company may, or may permit a Subsidiary to,
make a Disposition and the assets subject to such Disposition shall not be
subject to or included in the foregoing limitation and computation contained in
clause (d)(i) of the preceding sentence if, within 365 days of such Disposition,
an amount equal to the net proceeds from such Disposition is:
      (A) reinvested in productive assets to be used in the existing business of
the Company or a Subsidiary; or
      (B) applied to the payment or prepayment of the Notes or any other
outstanding Debt of the Company or any Subsidiary that is not subordinated in
right of payment to the Notes.
For purposes of foregoing clause (B), the Company shall offer to prepay (on a
Business Day not less than 30 or more than 60 days following such offer) the
Notes on a pro rata basis with any such other Debt that the Company elects to
include in such offer at a price of 100% of the principal amount of the Notes to
be prepaid (without any Make-Whole Amount) together with interest accrued to the
date of prepayment; provided that if any holder of the Notes declines or rejects
such offer, the proceeds that would have been paid to such holder shall be
offered pro rata to the other holders of the Notes that have accepted the offer.
A failure by a holder of Notes to respond in writing not later than 10 Business
Days prior to the proposed prepayment date to an offer to prepay made pursuant
to this Section 10.8 shall be deemed to constitute a rejection of such offer by
such holder. Solely for the purposes of foregoing clause (B), whether or not
such offers are accepted by the holders, the entire principal amount of the
Notes subject thereto shall be deemed to have been prepaid.
          For avoidance of doubt, this Section 10.8 is not applicable to
Dispositions of cash or cash equivalents.

10.9   Nature of Business.

          The Company will not, and will not permit any Subsidiary to, engage in
any business if, as a result, the general nature of the business in which the
Company and its Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the
Company and its Subsidiaries, taken as a whole, are engaged on the date of this
Agreement as described in the Memorandum.

10.10   Transactions with Affiliates.

          The Company will not, and will not permit any Subsidiary to, enter
into directly or indirectly any Material transaction or Material group of
related transactions (including the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company’s or such
Subsidiary’s business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm’s-length transaction with a Person not an Affiliate.

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10.11   Terrorism Sanctions Regulations.

          The Company will not and will not permit any Subsidiary to (a) become
a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of
the Anti Terrorism Order or (b) knowingly engage in any dealings or transactions
with any such Person.

11.   EVENTS OF DEFAULT.

          An “Event of Default” shall exist if any of the following conditions
or events shall occur and be continuing:
      (a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
      (b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
      (c) the Company defaults in the performance of or compliance with any term
contained in Section 7.1(d) or Sections 10.1 through 10.11; or
      (d) the Company defaults in the performance of or compliance with any term
contained herein (other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) the Company receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a “notice of default” and to
refer specifically to this paragraph (d) of Section 11); or
      (e) any representation or warranty made in writing by or on behalf of the
Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby or thereby
proves to have been false or incorrect in any material respect on the date as of
which made; or
      (f) (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Debt that is outstanding in an aggregate
principal amount of at least $25,000,000 beyond any period of grace provided
with respect thereto, or (ii) the Company or any Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt that is
outstanding in an aggregate principal amount of at least $25,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Debt has become,
or has been declared (or one or more Persons are entitled to declare such Debt
to be), due and payable before its stated maturity or before its regularly
scheduled dates of payment, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or the
right of the holder of Debt to convert

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such Debt into equity interests), (x) the Company or any Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or before its
regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $25,000,000, or (y) one or more Persons have the right to
require the Company or any Subsidiary so to purchase or repay such Debt; or
      (g) the Company or any Material Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
      (h) a court or Governmental Authority of competent jurisdiction enters an
order appointing, without consent by the Company or any Material Subsidiary, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any Material Subsidiary, or any such
petition shall be filed against the Company or any Material Subsidiary and such
petition shall not be dismissed within 90 days; or
      (i) a final judgment or judgments for the payment of money aggregating in
excess of $25,000,000 are rendered against one or more of the Company and its
Subsidiaries, which judgments are not, within 75 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within
75 days after the expiration of such stay;
      (j) if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning
of section 4001(a)(18) of ERISA) under all Plans determined in accordance with
Title IV of ERISA, shall exceed $25,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any

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Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare benefits
in a manner that would increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect;
      (k) the Subsidiary Guaranty ceases to be in full force and effect (except
in accordance with and by reason of the provisions of Section 9.7(b)) or is
declared to be null and void in whole or in material part by a court or other
governmental or regulatory authority having jurisdiction or the validity or
enforceability thereof shall be contested by the Company or any Subsidiary
Guarantor or any of them renounces any of the same or denies that it has any or
further liability thereunder;
      (l) at any time after completion of the actions required by
Section 9.9(b), the security interest in the Collateral created by the Pledge
Agreements ceases to be in full force and effect or is declared to be null and
void in whole or in material part by a court or other governmental or regulatory
authority having jurisdiction or the validity, enforceability or priority
thereof shall be contested by the Company or any Subsidiary party to either
Pledge Agreement or any of them renounces any of the same or asserts any of the
foregoing; or
      (m) at any time after completion of the actions required by
Section 9.9(b), any of the Collateral is transferred in violation of the terms
of either Pledge Agreement.
As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in section 3 of ERISA.

12.   REMEDIES ON DEFAULT, ETC.

12.1   Acceleration.

      (a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
      (b) If any other Event of Default has occurred and is continuing, any
holder or holders of at least 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
      (c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or

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          notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.
          Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon (including, but not limited to, interest accrued thereon
at the Default Rate) and (y) the Make-Whole Amount determined in respect of such
principal amount (to the fullest extent permitted by applicable law), shall all
be immediately due and payable, in each and every case without presentment,
demand, notice of acceleration, notice of intent to accelerate, protest or
further notice, all of which are hereby waived. The Company acknowledges, and
the parties hereto agree, that each holder of a Note has the right to maintain
its investment in the Notes free from repayment by the Company (except as herein
specifically provided for) and that the provision for payment of a Make-Whole
Amount by the Company in the event that the Notes are prepaid or are accelerated
as a result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.

12.2   Other Remedies.

          If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

12.3   Rescission.

          At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holder or holders of at least
51% in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.

12.4   No Waivers or Election of Remedies, Expenses, etc.

          No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice

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such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including reasonable attorneys’ fees, expenses and
disbursements.

13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1   Registration of Notes.

          The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.

13.2   Transfer and Exchange of Notes.

          Upon surrender of any Note to the Company at the address and to the
attention of the designated officer (all as specified in Section 18(iii)), for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or such holder’s attorney duly
authorized in writing and accompanied by the relevant name, address and other
information for notices of each transferee of such Note or part thereof), the
Company shall execute and deliver within 10 Business Days, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1(a) or 1(b). Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than $100,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representations and
agreements set forth in Section 6.2.

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13.3   Replacement of Notes.

          Upon receipt by the Company at the address and to the attention of the
designated officer (all as specified in Section 18(iii)) of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
      (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
      (b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver within 10 Business
Days, in lieu thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed or mutilated
Note or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

14.   PAYMENTS ON NOTES.

14.1   Place of Payment.

          Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in New
York, New York at the principal office of JPMorgan Chase Bank, N.A. in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

14.2   Home Office Payment.

          So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or

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surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 13.2. The Company will afford the benefits of this Section 14.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.

15.   EXPENSES, ETC.

15.1   Transaction Expenses.

          Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys’
fees of one special counsel and, if reasonably required by the Required Holders,
local or other counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement, the Notes, the
Subsidiary Guaranty, the Pledge Agreements or the Intercreditor Agreement
(whether or not such amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement, the Notes, the Subsidiary Guaranty, the Pledge Agreements or the
Intercreditor Agreement or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement, the
Notes, the Subsidiary Guaranty, the Pledge Agreements or the Intercreditor
Agreement, or by reason of being a holder of any Note, (b) the costs and
expenses, including financial advisors’ fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby, by the
Notes, by the Subsidiary Guaranty, the Pledge Agreements and the Intercreditor
Agreement and (c) the costs and expenses incurred in connection with the initial
filing of this Agreement and all related documents and financial information
with the SVO. The Company will pay, and will save you and each Other Purchaser
or holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those, if any, retained by
a Purchaser or other holder in connection with its purchase of the Notes).

15.2   Survival.

          The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement
(other than an amendment, waiver or termination that specifically references
this Section 15.2).

16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

          All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument

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delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.

17.   AMENDMENT AND WAIVER.

17.1   Requirements.

          This Agreement, the Notes and the Subsidiary Guaranty may be amended,
and the observance of any term hereof or thereof may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) subject
to the provisions of Section 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
17.2 Solicitation of Holders of Notes.
      (a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
      (b) Payment. The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding that also enters
into any waiver or amendment of any of the terms and provisions hereto. If any
such remuneration is paid to any holder of Notes that for any reason does not
enter into any waiver or amendment of any of the terms and provisions hereof,
such remuneration shall also be paid to all other non-consenting holders.

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17.3   Binding Effect, etc.

          Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
“this Agreement” or “the Agreement” and references thereto shall mean this Note
Purchase Agreement as it may from time to time be amended or supplemented.

17.4   Notes held by Company, etc.

          Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

18.   NOTICES.

          All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
      (i) if to you or your nominee, to you or it at the address specified for
such communications in Schedule A, or at such other address as you or it shall
have specified to the Company in writing,
      (ii) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or
      (iii) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of the General Counsel, with a copy to the
Company at 800 Tech Center Drive, Gahanna, Ohio 43230, telephone (614) 729-4701,
fax (614) 729-4899, to the attention of the Treasurer, or at such other address
as the Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.

40

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19.   REPRODUCTION OF DOCUMENTS.

          This Agreement and all documents relating hereto, including
(a) consents, waivers and modifications that may hereafter be executed,
(b) documents received by you at a Closing (except the Notes themselves), and
(c) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and you may destroy any original document so reproduced. The Company
agrees and stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

20.   CONFIDENTIAL INFORMATION.

          For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure, (b) subsequently becomes
publicly known through no act or omission by you or any Person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary, or (d) constitutes financial statements delivered to
you under Section 7.1 that are otherwise publicly available. You will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the NAIC or the SVO or, in each case, any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or

41

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(z) if an Event of Default has occurred and is continuing, to the extent you may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under your
Notes and this Agreement. Each holder of a Note, by its acceptance of a Note,
will be deemed to have agreed to be bound by and to be entitled to the benefits
of this Section 20 as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

21.   SUBSTITUTION OF PURCHASER.

          You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word “you” is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word “you” is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.

22.   MISCELLANEOUS.

22.1   Successors and Assigns.

          All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including any subsequent holder of a Note)
whether so expressed or not.

22.2   Payments Due on Non-Business Days.

          Anything in this Agreement or the Notes to the contrary
notwithstanding (but without limiting the requirement in Section 8.2 that the
notice of any optional prepayment specify a Business Day as the date fixed for
such prepayment), any payment of principal of or Make-Whole Amount or interest
on any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day;
provided that if the maturity date of any Note is a date other than a Business
Day, the payment otherwise due on such maturity date shall be made on the next
succeeding Business Day and shall include the additional days elapsed in the
computation of interest payable on such next succeeding Business Day.

42

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22.3   Accounting Terms.

          All accounting terms used herein that are not expressly defined in
this Agreement have the meanings respectively given to them in accordance with
GAAP. Except as otherwise specifically provided herein, (i) all computations
made pursuant to this Agreement shall be made in accordance with GAAP and
(ii) all financial statements shall be prepared in accordance with GAAP.

22.4   Severability.

          Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

22.5   Construction.

          Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
          For the avoidance of doubt, all Schedules and Exhibits attached to
this Agreement shall be deemed to be a part hereof.

22.6   Counterparts.

          This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

22.7   Governing Law.

          This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the state of New York
excluding choice of law principles of the law of such state that would require
the application of the laws of a jurisdiction other than such state.

22.8   Jurisdiction and Process; Waiver of Jury Trial.

      (a) The Company irrevocably submits to the non-exclusive jurisdiction of
any New York state or federal court sitting in the Borough of Manhattan, The
City of New York, over any suit, action or proceeding arising out of or relating
to this Agreement or

43

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the Notes. To the fullest extent permitted by applicable law, the Company
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
      (b) The Company consents to process being served by or on behalf of any
holder of Notes in any suit, action or proceeding of the nature referred to in
Section 22.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.
      (c) Nothing in this Section 22.8 shall affect the right of any holder of a
Note to serve process in any manner permitted by law, or limit any right that
the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
      (d) THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.

22.9   Maximum Interest Payable.

          The Company, each Purchaser and any other holder of the Notes
specifically intend and agree to limit contractually the amount of interest
payable under this Agreement, the Notes and all other instruments and agreements
related hereto and thereto to the maximum amount of interest lawfully permitted
to be charged under applicable law. Therefore, none of the terms of this
Agreement, the Notes or any instrument pertaining to or relating to this
Agreement or the Notes shall ever be construed to create a contract to pay
interest at a rate in excess of the maximum rate permitted to be charged under
applicable law, and none of the Company, any Subsidiary Guarantor or any other
party liable or to become liable hereunder, under the Notes, the Subsidiary
Guaranty or under any other instruments and agreements related hereto and
thereto shall ever be liable for interest in excess of the amount determined at
such maximum rate, and the provisions of this Section 22.9 shall control over
all other provisions of this Agreement, the Notes, the Subsidiary Guaranty or
any other instrument pertaining to or relating to the transactions herein
contemplated. If any amount of interest taken or received by a Purchaser or

44

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any holder of a Note shall be in excess of said maximum amount of interest
which, under applicable law, could lawfully have been collected by such
Purchaser or such holder incident to such transactions, then such excess shall
be deemed to have been the result of a mathematical error by all parties hereto
and shall be refunded promptly by the Person receiving such amount to the party
paying such amount, or, at the option of the recipient, credited ratably against
the unpaid principal amount of the Note or Notes held by a Purchaser or such
holder, respectively. All amounts paid or agreed to be paid in connection with
such transactions which would under applicable law be deemed “interest” shall,
to the extent permitted by such applicable law, be amortized, prorated,
allocated and spread throughout the stated term of this Agreement and the Notes.
“Applicable law” as used in this Section 22.9 means that law in effect from time
to time that permits the charging and collection of the highest permissible
lawful, nonusuriouis rate of interest on the transactions herein contemplated
including laws of the state of Texas and of the United States of America, and
“maximum rate” as used in this paragraph means, with respect to each of the
Notes, the maximum lawful, nonusurious rates of interest (if any) which under
applicable law may be charged to the Company from time to time with respect to
such Notes.

45

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          If you are in agreement with the foregoing, please sign the form of
agreement on a counterpart of this Agreement and return it to the Company,
whereupon this Agreement shall become a binding agreement between you and the
Company.

      Very truly yours,
 
    ALLIANCE DATA SYSTEMS
CORPORATION
 
   
By:
  /s/ Michael D. Kubic
 
   
Name:
Title:
  Michael D. Kubic
Senior Vice President, Corporate
Controller and Chief Accounting Officer

S-1

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This Agreement is accepted and
agreed to as of the date thereof.
AIG Annuity Insurance Company
The Variable Annuity Life Insurance Company

     
By:
  AIG Global Investment Corp., investment adviser
 
   
By:
  /s/ Ted Etlinger
 
   
Name:
  Ted Etlinger
 
   
Title:
  Vice President
 
   

S-2

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          METROPOLITAN LIFE INSURANCE COMPANY
 
    /s/ Judith A. Gulotta
 
 
 
Name:
  Judith A. Gulotta
 
   
Title:
  Director
 
   
 
    METLIFE INSURANCE COMPANY OF CONNECTICUT
 
    /s/ Judith A. Gulotta  
Name:
  Judith A. Gulotta
 
   
Title:
  Director
 
   

S-3

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          AMERICAN STATES LIFE INSURANCE COMPANY,
an Indiana corporation
 
        By:   Principal Global Investors, LLC
a Delaware limited liability company,
its authorized signatory
 
       
 
  By:   /s/ Christopher J. Henderson
 
       
 
  Its:   Vice President and Senior Investment Counsel
 
       
 
       
 
  By:   /s/ James C. Field
 
       
 
  Its:   Counsel
 
       
 
        PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
 
        By:   Principal Global Investors, LLC
a Delaware limited liability company,
its authorized signatory
 
       
 
  By:   /s/ Christopher J. Henderson
 
       
 
  Its:   Vice President and Senior Investment Counsel
 
       
 
       
 
  By:   /s/ James C. Field
 
       
 
  Its:   Counsel
 
       
 
        PRINCIPAL LIFE INSURANCE COMPANY
 
        By:   Principal Global Investors, LLC
a Delaware limited liability company,
its authorized signatory
 
       
 
  By:   /s/ Christopher J. Henderson
 
       
 
  Its:   Vice President and Senior Investment Counsel
 
       
 
       
 
  By:   /s/ James C. Field
 
       
 
  Its:   Counsel
 
       

S-4

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          SYMETRA LIFE INSURANCE COMPANY,
a Washington corporation
 
        By:   Principal Global Investors, LLC
a Delaware limited liability company,
its authorized signatory
 
       
 
  By:   /s/ Christopher J. Henderson
 
       
 
  Its:   Vice President and Senior Investment Counsel
 
       
 
       
 
  By:   /s/ James C. Field
 
       
 
  Its:   Counsel
 
       
 
        VANTISLIFE INSURANCE COMPANY,
a Connecticut company
 
        By:   Principal Global Investors, LLC
a Delaware limited liability company,
its authorized signatory
 
       
 
  By:   /s/ Christopher J. Henderson
 
       
 
  Its:   Vice President and Senior Investment Counsel
 
       
 
       
 
  By:   /s/ James C. Field
 
       
 
  Its:   Counsel
 
       

S-5

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      ALLSTATE LIFE INSURANCE COMPANY
 
   
By:
  /s/ Robert B. Bodett
 
   
Name:
  Robert B. Bodett
 
   
 
   
By:
  /s/ Jerry D. Zinkula
 
   
Name:
  Jerry D. Zinkula
 
   
 
    Authorized Signatories
 
    ALLSTATE INSURANCE COMPANY
 
   
By:
  /s/ Robert B. Bodett
 
   
Name:
  Robert B. Bodett
 
   
 
   
By:
  /s/ Jerry D. Zinkula
 
   
Name:
  Jerry D. Zinkula
 
   
 
    Authorized Signatories

S-6

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      THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
 
   
By:
  /s/ Mark E. Kishler
 
   
Name:
  Mark E. Kishler
 
   
Title:
  Its Authorized Representative
 
   

S-7

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      TRANSAMERICA LIFE INSURANCE COMPANY
 
   
By:
  /s/ Allen R. Cantrell
 
   
Name:
  Allen R. Cantrell
 
   
Title:
  Vice President
 
   

S-8

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      HARTFORD LIFE INSURANCE COMPANY
  By: Hartford Investment Management Company
  Its: Agent and Attorney-in-Fact
 
   
By:
  /s/ Ronald A. Mendel
 
   
Name:
  Ronald A. Mendel
 
   
Title:
  Managing Director
 
   
 
    PHYSICIANS LIFE INSURANCE COMPANY
  By: Hartford Investment Management Company
  Its: Investment Advisor
 
   
By:
  /s/ Ronald A. Mendel
 
   
Name:
  Ronald A. Mendel
 
   
Title:
  Managing Director
 
   

S-9

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      NEW YORK LIFE INSURANCE COMPANY
 
   
By:
  /s/ Lisa A. Scuderi
 
   
Name:
  Lisa A. Scuderi
 
   
Title:
  Investment Vice President
 
   
 
    NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
 
    By: New York Life Investment Management LLC,
its Investment Manager
 
   
By:
  /s/ Lisa A. Scuderi
 
   
Name:
  Lisa A. Scuderi
 
   
Title:
  Director
 
   
 
    NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT
 
    By: New York Life Investment Management LLC,
its Investment Manager
 
   
By:
  /s/ Lisa A. Scuderi
 
   
Name:
  Lisa A. Scuderi
 
   
Title:
  Director
 
   

S-10

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      NATIONWIDE LIFE INSURANCE COMPANY
NATIONWIDE MULTIPLE MATURITY SEPARATE ACCOUNT
 
    /s/ Joseph P. Young
  Joseph P. Young
Authorized Signatory

S-11

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      THE PRUDENTIAL INSURANCE COMPANY
 OF AMERICA
 
   
By:
  /s/ Brien N. Davis
 
   
 
  Vice President
 
    PRUDENTIAL RETIREMENT INSURANCE
 AND ANNUITY COMPANY
 
   
By:
  Prudential Investment Management, Inc.,
as investment manager
 
   
By:
  /s/ Brien N. Davis
 
   
 
  Vice President
 
    FARMERS NEW WORLD LIFE INSURANCE
 COMPANY
 
   
By:
  Prudential Private Placement Investors,
L.P. (as Investment Advisor)
 
   
By:
  Prudential Private Placement Investors, Inc.
(as its General Partner)
 
   
By:
  /s/ Brien N. Davis
 
   
 
  Vice President

S-12

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      THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
 
   
By:
  /s/ Ellen I. Whitaker
 
   
Name:
  Ellen I. Whitaker
 
   
Title:
  Director, Fixed Income Investments
 
   
 
    FORT DEARBORN LIFE INSURANCE COMPANY
 
    By: Guardian Investor Services LLC
 
   
By:
  /s/ Ellen I. Whitaker
 
   
Name:
  Ellen I. Whitaker
 
   
Title:
  Director, Fixed Income Investments
 
   
 
    THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
 
   
By:
  /s/ Ellen I. Whitaker
 
   
Name:
  Ellen I. Whitaker
 
   
Title:
  Director, Fixed Income Investments
 
   

S-13

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      TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
 
   
By:
  /s/ Lisa M. Ferraro
 
   
Name:
  Lisa M. Ferraro
 
   
Title:
  Director
 
   

S-14

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      THRIVENT FINANCIAL FOR LUTHERANS
 
   
By:
  /s/ Glen J. Vanic
 
   
Name:
  Glen J. Vanic
 
   
Title:
  Portfolio Manager
 
   

S-15

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      ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
By: Allianz of America, Inc. as the authorized signatory and investment manager
 
   
By:
  /s/ Gary Brown
 
   
Name:
  Gary Brown
Title:
  Assistant Treasurer

S-16

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      PACIFIC LIFE INSURANCE COMPANY
 
   
By:
  /s/ Cathy Schwartz
 
   
Name:
  Cathy Schwartz
 
   
Title:
  Assistant Vice President
 
   
 
   
By:
  /s/ David C. Patch
 
   
Name:
  David C. Patch
 
   
Title:
  Assistant Secretary
 
   

S-17

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      Fidelity Life Association By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   
 
    MTL Insurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   
 
    Great Western Insurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   
 
    The Catholic Aid Association By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   
 
    American Fidelity Assurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   
 
    American Republic Insurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Christopher R. Sebald
 
   
Name:
  Christopher R. Sebald
 
   
Title:
  Senior Vice President
 
   

S-18

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      Trustmark Insurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Steven R. Lane
 
   
Name:
  Steven R. Lane
 
   
Title:
  Vice President
 
   
 
    GuideOne Property & Casualty Insurance Company By: Advantus Capital
Management, Inc.
 
   
By:
  /s/ Steven R. Lane
 
   
Name:
  Steven R. Lane
 
   
Title:
  Vice President
 
   
 
    Security National Life Insurance Company By: Advantus Capital Management,
Inc.
 
   
By:
  /s/ Steven R. Lane
 
   
Name:
  Steven R. Lane
 
   
Title:
  Vice President
 
   
 
    Fort Dearborn Life Insurance Company By: Advantus Capital Management, Inc.
 
   
By:
  /s/ Steven R. Lane
 
   
Name:
  Steven R. Lane
 
   
Title:
  Vice President
 
   
 
    Blue Cross and Blue Shield of Florida, Inc. By: Advantus Capital Management,
Inc.
 
   
By:
  /s/ Steven R. Lane
 
   
Name:
  Steven R. Lane
 
   
Title:
  Vice President
 
   

S-19

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      CUNA Mutual Life Insurance Company
 
   
By:
  MEMBERS Capital Advisors, Inc., acting as Investment Advisor:
 
   
By
  /s/ James E. McDonald, Jr.
 
   
Name:
  James E. McDonald, Jr.
Title:
  Director, Private Placements
 
    CUNA Mutual Insurance Society
 
   
By:
  MEMBERS Capital Advisors, Inc., acting as Investment Advisor:
 
   
By
  /s/ James E. McDonald, Jr.
 
   
Name:
  James E. McDonald, Jr.
Title:
  Director, Private Placements
 
    CUMIS Insurance Society, Inc.
 
   
By:
  MEMBERS Capital Advisors, Inc., acting as Investment Advisor:
 
   
By
  /s/ James E. McDonald, Jr.
 
   
Name:
  James E. McDonald, Jr.
Title:
  Director, Private Placements
 
    MEMBERS Life Insurance Company
 
   
By:
  MEMBERS Capital Advisors, Inc., acting as Investment Advisor:
 
   
By
  /s/ James E. McDonald, Jr.
 
   
Name:
  James E. McDonald, Jr.
Title:
  Director, Private Placements

S-20

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      American Equity Investment Life Insurance Co.
 
   
By:
  /s/ Rachel Stauffer
 
   
Name:
  Rachel Stauffer
 
   
Title:
  Vice President — Investments
 
   

S-21

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      American Investors Life Insurance Company
 
   
By:
  AmerUs Capital Management Group, Inc., its authorized attorney-in-fact
 
   
By:
  /s/ Roger D. Fors
 
   
Name:
  Roger D. Fors
 
   
Title:
  Vice President — Private Placements
 
   

S-22

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      AMERICAN FAMILY LIFE INSURANCE COMPANY
 
   
By:
  /s/ Phillip Hannifan
 
   
Name:
  Phillip Hannifan
Title:
  Investment Director

S-23

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      OHIO NATIONAL LIFE ASSURANCE CORPORATION THE OHIO NATIONAL LIFE INSURANCE
COMPANY
 
   
By:
  /s/ Jed R. Martin
 
   
Name:
  Jed R. Martin
 
   
Title:
  Vice President, Private Placements
 
   

S-24

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SCHEDULE B
DEFINED TERMS
     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
     “ADSI” means ADS Alliance Data Systems, Inc., a Delaware corporation and a
Wholly Owned Subsidiary of the Company.
     “Affiliate” means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an “Affiliate”
is a reference to an Affiliate of the Company.
     “Anti-Terrorism Order” means Executive Order 13224 of September 23, 2001,
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).
     “Banks” means the lenders party to any of the Credit Agreements.
     “Business Day” means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Dallas, Texas or New York City are required or
authorized to be closed.
     “Canadian Pledge Agreement” means the Canadian Pledge Agreement dated as of
April 10, 2003 between Harris N.A., as Collateral Agent for the benefit of the
Secured Creditors (as defined therein) and each of the Pledgors party thereto,
as amended to the date of Closing and as such agreement may be amended, modified
or supplemented from time to time.
     “Capital Lease” means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
     “Capital Stock” means (a) in the case of a corporation, capital stock,
(b) in the case of a partnership, partnership interests (whether general or
limited), (c) in the case of a limited liability company, membership interests
and (d) any other interest or participation in a Person that confers on the
holder the right to receive a share of the profits and losses of, or
distributions of assets of, such Person.
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     “Change of Control” means an event or series of events by which any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) (other than the WCAS Partnerships) becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
more than 50% of the voting power of the then outstanding Capital Stock of the
Company entitled to vote generally in the election of the directors of the
Company.
     “Closing” is defined in Section 3.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
     “Company” means Alliance Data Systems Corporation, a Delaware corporation.
     “Confidential Information” is defined in Section 20.
     “Consolidated Debt” means, as of any date, outstanding Debt of the Company
and its Subsidiaries as of such date, determined on a consolidated basis in
accordance with GAAP.
     “Consolidated EBIT” means, for any period, the sum of Consolidated Net
Income for such period, plus, to the extent deducted in determining such
Consolidated Net Income, (i) Consolidated Interest Expense and (ii) federal,
state, local and foreign income, value added and similar taxes. If, during the
period for which Consolidated EBIT is being calculated, the Company or any
Subsidiary has (i) acquired sufficient Capital Stock of a Person to cause such
Person to become a Subsidiary; (ii) acquired all or substantially all of the
assets or operations, division or line of business of a Person; (iii) disposed
of sufficient Capital Stock of a Subsidiary to cause such Subsidiary to cease to
be a Subsidiary; or (iv) disposed or all or substantially all of the assets or
operations of a Subsidiary, Consolidated EBIT shall be calculated after giving
pro forma effect thereto as if such acquisition or disposition had occurred on
the first day of such period.
     “Consolidated Interest Expense” means, for any period, the total interest
expense paid on Debt of the Company and its Subsidiaries (including the interest
component of Capital Leases) for such period, determined on a consolidated basis
in accordance with GAAP.
     “Consolidated Net Income” means, for any period, the net income or loss of
the Company and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, but in any event exclusive of the effect of any
extraordinary or other nonrecurring gain and loss and excluding all non-cash
adjustments; provided that any cash payment made or received with respect to any
such non-cash charge, expense or loss shall be subtracted or added in computing
Consolidated Net Income during the period in which such cash payment is made or
received.
     “Consolidated Net Worth” means, as of any date, the stockholders’ equity of
the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
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     “Consolidated Operating EBITDA” means, for any period, the sum of
Consolidated EBIT for such period, plus, to the extent deducted in determining
Consolidated Net Income, (i) depreciation and amortization expense, including
amortization of goodwill and other intangible assets and (ii) the amount of any
change in the Deferred Revenue Account from the beginning of such period to the
last day of such period, less (iii) the amount of any change in the Restricted
Cash Account from the beginning of such period to the last day of such period.
If, during the period for which Consolidated Operating EBITDA is being
calculated, the Company or any Subsidiary has (i) acquired sufficient Capital
Stock of a Person to cause such Person to become a Subsidiary; (ii) acquired all
or substantially all of the assets or operations, division or line of business
of a Person; (iii) disposed of sufficient Capital Stock of a Subsidiary to cause
such Subsidiary to cease to be a Subsidiary; or (iv) disposed or all or
substantially all of the assets or operations of a Subsidiary, Consolidated
Operating EBITDA shall be calculated after giving pro forma effect thereto as if
such acquisition or disposition had occurred on the first day of such period.
     “Consolidated Total Assets” means, as of any date, the assets and
properties of the Company and its Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP, less any amount of assets reflected
therein to the extent that they have been sold or pledged pursuant to a
Qualified Securitization Transaction, which amount shall be deemed to be equal
to the amount excluded from the calculation of Debt pursuant to clauses (i)(A)
and (ii) of the last sentence of the definition thereof.
     “Control Event” means:
     (a) the execution by the Company or any of its Subsidiaries or Affiliates
of any agreement with respect to any proposed transaction or event or series of
transactions or events that, individually or in the aggregate, may reasonably be
expected to result in a Change of Control, or
     (b) the execution of any written agreement that, when fully performed by
the parties thereto, would result in a Change of Control.
     “Credit Agreement (Canadian)” means the Credit Agreement (Canadian) dated
as of April 10, 2003 among Loyalty Management, the guarantors party thereto, the
Banks from time to time parties thereto, Bank of Montreal, as Letter of Credit
Issuer, and Harris N.A., as Administrative Agent, as amended prior to the date
of Closing and as such agreement hereafter may be amended, restated,
supplemented, modified, refinanced, extended or replaced.
     “Credit Agreement (3-Year)” means the Credit Agreement (3-Year) dated as of
April 10, 2003 among the Company, the Subsidiary Guarantors, the Banks from time
to time parties thereto and Harris N.A. as Letter of Credit Issuer and as
Administrative Agent, as amended prior to the date of Closing and as such
agreement hereafter may be amended, restated, supplemented, modified,
refinanced, extended or replaced.
     “Credit Agreement (364-Day)” means the Credit Agreement (364-Day) dated as
of April 10, 2003 among the Company, the Subsidiary Guarantors, the Banks from
time to time
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parties thereto and Harris N.A., as Letter of Credit Issuer and as
Administrative Agent, as amended prior to the date of Closing and as such
agreement hereafter may be amended, restated, supplemented, modified,
refinanced, extended or replaced.
     “Credit Agreements” means the Credit Agreement (Canadian), the Credit
Agreement (3-Year) and the Credit Agreement (364-Day), collectively.
“Debt” with respect to any Person means, at any time, without duplication,
     (a) its liabilities for borrowed money;
     (b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable and other accrued liabilities arising in
the ordinary course of business but including all liabilities created or arising
under any conditional sale or other title retention agreement with respect to
any such property);
     (c) all liabilities appearing on its balance sheet in accordance with GAAP
in respect of Capital Leases;
     (d) all liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);
     (e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money); and
     (f) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (e) hereof.
Notwithstanding the foregoing, (i) there shall be excluded from the Debt of any
Person (A) any obligations of such Person under a Qualified Securitization
Transaction that are or may be reflected as Debt on a balance sheet of such
Person and (B) any Qualifying Deposits of such Person and (ii) there shall be
included as Debt of any Person only the amount by which (A) certificates of
deposit reflected as a liability on the balance sheet of such Person exceed
(B) Seller’s Interest and Credit Card Receivables, Net, reflected as an asset on
such balance sheet.
     “Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
     “Default Rate” means that rate of interest that is the greater of (i) 2%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 2% over the rate of interest publicly announced by JPMorgan
Chase Bank, N.A. as its “base” or “prime” rate.
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     “Deferred Revenue Account” means the account on the consolidating balance
sheet of the Company associated solely with the change in revenue recognition by
Loyalty Management.
     “Disclosure Documents” is defined in Section 5.3.
     “Disposition” is defined in Section 10.8.
     “Domestic Subsidiary” means any Subsidiary of the Company that is organized
under the laws of any state of the United States of America or the District of
Columbia.
     “Electronic Delivery” means (i) for reports, registration statements and
other documents required to be filed with the SEC, the timely filing and
availability thereof on “EDGAR” and the timely availability thereof on the
Company’s home page on the worldwide web (at the date of this Agreement located
at: http//www.alliancedatasystems.com) and (ii) for any documents not required
to be filed with the SEC, the timely availability thereof on the Company’s home
page on the worldwide web for a period of no less than 60 days, and in every
case, the prior notice by the Company to each holder of Notes of such
availability, with such notice containing either (y) an attachment of such
reports, registration statements or other documents or (z) a link to the site on
the worldwide web containing such documents.
     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
Hazardous Materials.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
     “ERISA Affiliate” means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
     “Event of Default” is defined in Section 11.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Foreign Subsidiary” means each Subsidiary of the Company other than a
Domestic Subsidiary.
     “Form 10-K” is defined in Section 7.1(b).
     “Form 10-Q” is defined in Section 7.1(a).
     “GAAP” means generally accepted accounting principles as in effect from
time to time in the United States of America.
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     “Governmental Authority” means
     (a) the government of
     (i) the United States of America or any state or other political
subdivision thereof, or
     (ii) any jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties
of the Company or any Subsidiary, or
     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
     “Guaranty” means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including obligations incurred through an agreement,
contingent or otherwise, by such Person:
     (a) to purchase such Debt or obligation or any property constituting
security therefor;
     (b) to advance or supply funds (i) for the purchase or payment of such Debt
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such Debt or
obligation;
     (c) to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such Debt or obligation of the ability of
any other Person to make payment of the Debt or obligation; or
     (d) otherwise to assure the owner of such Debt or obligation against loss
in respect thereof.
In any computation of the Debt or other liabilities of the obligor under any
Guaranty, the Debt or other obligations that are the subject of such Guaranty
shall be assumed to be direct obligations of such obligor.
     “Hazardous Material” means any and all pollutants, toxic or hazardous
wastes or other substances that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.
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     “holder” means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1.
     “INHAM Exemption” is defined in Section 6.2(e).
     “Institutional Investor” means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 in aggregate principal amount of the
Notes at the time outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form and (d) any Related
Fund of any holder of any Note.
     “Insured Subsidiary” means a Subsidiary of the Company that is an “insured
depositary institution” under and as defined in the Federal Deposit Insurance
Act (12 U.S.C. 1813(c)(2)) or any successor statute.
     “Intercreditor Agreement” means the Intercreditor and Collateral Agency
Agreement dated as of April 10, 2003 among Harris N.A., as Collateral Agent and
the Senior Creditors party thereto, as amended prior to the date of Closing and
as such agreement may be amended, modified or supplemented from time to time.
     “Lien” means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
     “Loyalty Management” means Loyalty Management Group Canada Inc., an Ontario
corporation and a Wholly Owned Subsidiary of the Company.
     “Make-Whole Amount” is defined in Section 8.7.
     “Material” means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
     “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, financial condition, assets or properties of the Company
and its Subsidiaries taken as a whole, (b) the ability of the Company to perform
its obligations under this Agreement, the Notes or any Pledge Agreement to which
it is a party, (c) the ability of any Subsidiary to perform its obligations
under the Subsidiary Guaranty if it is a party thereto or any Pledge Agreement
to which it is a party, or (d) the validity or enforceability of this Agreement,
the Notes, the Subsidiary Guaranty or any of the Pledge Agreements.
     “Material Domestic Subsidiary” means, at any time, any Domestic Subsidiary
that as of the end of the most recently completed fiscal quarter (in the case of
clause (i) below) or the most recently completed fiscal year (in the case of
clause (ii) below) accounted (or in the
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Schedule B

 

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case of an acquired Subsidiary, on a pro forma basis would have accounted) for
more than 10% of (i) Consolidated Total Assets as of the end of the most
recently completed fiscal quarter or (ii) consolidated revenue of the Company
and its Subsidiaries for the most recently completed fiscal year of the Company.
     “Memorandum” is defined in Section 5.3.
     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such
term is defined in section 4001(a)(3) of ERISA).
     “NAIC” means the National Association of Insurance Commissioners or any
successor thereto.
     “NAIC Annual Statement” is defined in Section 6.2(a).
     “Non-U.S. Plan” means any plan, fund or other similar program that (a) is
established or maintained outside the United States of America by the Company or
any Subsidiary primarily for the benefit of employees of the Company or one or
more Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and (b) is not subject to ERISA or the Code.
     “Notes” is defined in Section 1.
     “Officer’s Certificate” means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
     “Other Purchasers” is defined in Section 2.
     “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
     “Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, business entity or a
government or agency or political subdivision thereof.
     “Plan” means an “employee benefit plan” (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
     “Pledge Agreement” means the Pledge Agreement dated as of April 10, 2003
between Harris N.A., as Collateral Agent for the benefit of the Secured
Creditors (as defined
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therein) and each of the Pledgors party thereto, as amended to the date of
Closing and as such agreement may be amended, modified or supplemented from time
to time.
     “Pledge Agreements” means the Canadian Pledge Agreement and the Pledge
Agreement, collectively.
     “Priority Debt” means, as of any date, the sum (without duplication) of
(a) Debt of the Company and its Subsidiaries secured by Liens not otherwise
permitted by Sections 10.5(a) through (j) and (b) outstanding unsecured Debt of
Subsidiaries not otherwise permitted by Sections 10.6(a) through (e).
     “property” or “properties” means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
     “Proposed Prepayment Date” is defined in Section 8.3(c).
     “PTE” is defined in Section 6.2(a).
     “Purchaser” means each purchaser listed in Schedule A.
     “QPAM Exemption” is defined in Section 6.2(d).
     “Qualified Institutional Buyer” means any Person that is a “qualified
institutional buyer” within the meaning of such term as set forth in
Rule 144A(a)(1) under the Securities Act.
     “Qualified Securitization Subsidiary” means a Subsidiary that is a special
purpose entity used in connection with a Qualified Securitization Transaction.
     “Qualified Securitization Transaction” means a securitization or other sale
or financing of credit card receivables.
     “Qualifying Deposits” means deposits that are (i) insured by the Federal
Deposit Insurance Corporation and (ii) do not exceed the difference between
(A) the amount of seller’s interest and credit card receivables minus (B) the
allowance for doubtful accounts related to seller’s interest and credit card
receivables, in each case as shown on the consolidated balance sheet of the
Company and its Subsidiaries.
     “Related Fund” means, with respect to any holder of any Note, any fund or
entity that (i) invests in securities or bank loans, and (ii) is advised or
managed by such holder, the same investment advisor as such holder or by an
affiliate of such holder or such investment advisor.
     “Required Holders” means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
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     “Responsible Officer” means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
     “Restricted Cash Account” means the account on the consolidating balance
sheet of the Company related solely to redemption settlement assets of Loyalty
Management’s “Air Miles Program.”
     “SEC” shall mean the Securities and Exchange Commission of the United
States, or any successor thereto.
     “Securities Act” means the Securities Act of 1933, as amended from time to
time.
     “Seller’s Interest and Credit Card Receivables, Net” means, for any Person,
the sum of (i) the residual interest, if any, of such Person in credit card
receivables that are subject to a Qualified Securitization Transaction, plus
(ii) credit card receivables of such Person, less an allowance for doubtful
accounts, that are not subject to a Qualified Securitization Transaction, all as
appear or would appear on a balance sheet of such Person determined in
accordance with GAAP.
     “Senior Debt” means, at any date, all Debt owing by the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
such date under the Notes and the Credit Agreements.
     “Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
     “Series A Notes” is defined in Section 1.1.
     “Series B Notes” is defined in Section 1.1.
     “Source” is defined in Section 6.2.
     “Subsidiary” means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership, limited liability company, or joint venture if more than a 50%
interest in the profits or capital thereof is owned by such Person or one or
more of its Subsidiaries (unless such partnership, limited liability company or
joint venture can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Company.
     “Subsidiary Guarantor” is defined in Section 1.2.
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     “Subsidiary Guaranty” is defined in Section 1.2.
     “SVO” means the Securities Valuation Office of the NAIC or any successor to
such Office.
     “this Agreement” or “the Agreement” is defined in Section 17.3.
     “USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
     “U.S. Credit Agreements” means, collectively, the Credit Agreement (3-Year)
and the Credit Agreement (364-Day).
     “WCAS Partnerships” means each current and future Welsh, Carson, Anderson &
Stowe limited partnership, any partner, partnership or Affiliate of such limited
partnership, and their respective successors and assigns.
     “Wholly Owned Subsidiary” means, at any time, any Subsidiary 100% of all of
the Capital Stock (except directors’ qualifying shares and other minority shares
held solely to satisfy organization requirements of the applicable jurisdiction)
and voting interests of which are owned by any one or more of the Company and
the Company’s other Wholly Owned Subsidiaries at such time.
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Schedule B