Document:

<PAGE>
                              COMMERCIAL LEASE AGREEMENT

                               WATERVIEW PARKWAY, L.P.
                                      (LANDLORD)

                                         AND

                           ADS ALLIANCE DATA SYSTEMS, INC.
                                       (TENANT)

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                                  TABLE OF CONTENTS
                                  -----------------

<TABLE>
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                                                                                     PAGE NO.
                                                                                     --------
<C> <S>                                                                             <C>
1.   PREMISES, TERM, AND INITIAL IMPROVEMENTS.......................................     1

2.   BASE RENT, SECURITY DEPOSIT AND ADDITIONAL RENT................................     1

3.   TAXES..........................................................................     2

4.   LIMITED LANDLORD OBLIGATIONS...................................................     3

5.   MAINTENANCE AND REPAIR OBLIGATIONS.............................................     3

6.   ALTERATIONS....................................................................     4

7.   SIGNS..........................................................................     4

8.   UTILITIES......................................................................     4

9.   INSURANCE......................................................................     4

10.  DESTRUCTION OF OR DAMAGE TO PROPERTY...........................................     5

11.  LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE CLAIMS........     5

12.  USE............................................................................     6

13.  LANDLORD'S LIMITED RIGHT OF ACCESS.............................................     6

14.  ASSIGNMENT AND SUBLETTING......................................................     6

15.  CONDEMNATION...................................................................     8

16.  SURRENDER OF PREMISES; HOLDING OVER............................................     8

17.  QUIET ENJOYMENT................................................................     8

18.  EVENTS OF DEFAULT..............................................................     9

19.  REMEDIES.......................................................................     9

20.  LANDLORD'S LIABILITY...........................................................    10

21.  MORTGAGES......................................................................    10

22.  ENCUMBRANCES...................................................................    10

23.  MISCELLANEOUS..................................................................    10

24.  NOTICES........................................................................    11

25.  HAZARDOUS WASTE................................................................    12

26.  WAIVER OF LANDLORD'S LIEN......................................................    12

27.  ADDITIONAL PARKING AREA........................................................    12

28.  TENANT IMPROVEMENT FINANCING...................................................    12

29.  EXISTING EQUIPMENT.............................................................    12

</TABLE>
                                       i
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                            LIST OF DEFINED TERMS
                            ---------------------

<TABLE>
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<S>                                                                                 <C>
AAA.................................................................................     3
Affiliate...........................................................................    10
AS-IS...............................................................................     1
Base Rent...........................................................................     1
Building............................................................................     1
Building Systems....................................................................     3
Building's Structure................................................................     4
Casualty............................................................................     5
Claimant............................................................................    10
Closing.............................................................................    10
Commencement Date...................................................................     1
Construction Schedule...............................................................     5
Dresser.............................................................................     1
Environmental Law...................................................................    12
Event of Default....................................................................     9
Expansion Amendment.................................................................   B-1
Expansion Amendment Lease Term......................................................   B-1
Expansion Discussion Documents......................................................   B-1
Expansion Discussion Work...........................................................   B-1
Expansion Extension.................................................................   B-1
Expansion Notice....................................................................   B-1
Expansion Plans and Specifications..................................................   B-1
Expansion Space.....................................................................   B-1
Expansion Work......................................................................   B-1
Hazardous Substances................................................................    12
including...........................................................................    10
Indemnified Parties.................................................................     5
Land................................................................................     1
Landlord............................................................................     1
Landlord's Mortgagee................................................................    10
Law.................................................................................    10
Laws................................................................................    10
Lease...............................................................................     1
Lease Year..........................................................................     1
Loss................................................................................     5
Market Rent.........................................................................   C-1
Mortgage............................................................................    10
MSDS................................................................................    12
Pass-Through Expense Statement......................................................     2
Pass-Through Expenses...............................................................     2
Permitted Activities................................................................    12
Permitted Materials.................................................................    12
Permitted Transfer..................................................................     7
Permitted Transferee................................................................     7
Peterson............................................................................    11
Preliminary Expansion Plans and Specification.......................................   B-1
Premises............................................................................     1
Primary Lease.......................................................................    10
Remaining Work......................................................................     1
rent................................................................................     2
Security Deposit....................................................................     1
Signage.............................................................................     4
SNDA................................................................................    10
Substantial Damage..................................................................     5
Taking..............................................................................     8
Taxes...............................................................................     2
Ten-Year Mortgage Money Rate........................................................   B-2
Tenant..............................................................................     1
Tenant Party........................................................................    10
Term................................................................................     1
Termination Date....................................................................   B-2
the date hereof.....................................................................    11
Total Expansion Costs...............................................................   B-2
Transfer............................................................................     6
Unrecorded Lease....................................................................   F-1

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                                       ii
<PAGE>

                                  LEASE AGREEMENT
                                  ---------------

     This Lease Agreement (this "LEASE") is entered into by WATERVIEW PARKWAY,
L.P., a Texas limited partnership ("LANDLORD"), and ADS ALLIANCE DATA SYSTEMS,
INC., a Delaware corporation ("TENANT").

     1.   PREMISES. TERM. AND INITIAL IMPROVEMENTS.

          (a)  Landlord leases to Tenant, and Tenant leases from Landlord, the
real property described on EXHIBIT A (the "LAND"), along with the building
containing 61,750 rentable square feet and other improvements located on the
Land, and all Building Systems (as defined below) (the "BUILDING"), subject to
the terms and conditions in this Lease. The Land and Building are herein
collectively called the "PREMISES." In connection with its use of the Premises,
Tenant shall have the right to use the easements and appurtenances related to
the Premises. Landlord and Tenant stipulate that the number of rentable square
feet for the Building stated herein shall be binding upon them, subject to
changes thereto caused by Casualty (defined below), Taking (defined below),
expansion, or other similar event Landlord hereby conditionally assigns all of
the warranties with respect to the Building Systems, provided that Tenant may
not amend or modify any terms or conditions of such warranties and such
assignment shall be ineffective upon the occurrence of an Event of Default.

          (b)  The Lease term shall be 120 months, beginning on the Commencement
Date (defined below) (the "TERM", which defined term shall include all renewals
and extensions of the Term); however, if the Commencement Date is not the first
day of a calendar month, then the Term shall end on the last day of the
120-month period that begins with the first day of the first full calendar month
of the Term. The "COMMENCEMENT DATE" shall be the date of Landlord's acquisition
of the Premises from Dresser Industries, Inc. ("DRESSER"). If Landlord has not
acquired the Premises from Dresser by July 30, 1997, then this Lease shall
automatically terminate.

          (c)  Tenant hereby accepts the Premises in its "AS-IS" condition, and
Landlord shall have no obligation to perform any work therein (including
demolition of any improvements existing therein or construction of any
tenant-finish-work or other improvements therein) and shall not be obligated to
reimburse Tenant or provide any allowance for any cost relating to the
demolition of improvements therein. Whenever Tenant is required by any Law to
obtain a certificate of occupancy for any portion of the Premises, Tenant shall,
at is expense and prior to occupying such portion of the Premises or conducting
its business therein, obtain and deliver to Landlord a certificate of occupancy
for such portion of the Premises from the appropriate governmental authority.

     2.   BASE RENT. SECURITY DEPOSIT AND ADDITIONAL RENT.

          (a)  Tenant shall pay to Landlord "BASE RENT", in advance, without
demand, deduction or (except as specifically provided herein) set off, equal to
the following amounts for the following months of the Term:

                Lease Year                   Monthly Base Rent
                ----------                   -----------------

               1 through 5                       $57 478.96

               6 through 10                      $66,123.96

As used herein, the term "LEASE YEAR" shall mean the twelve-month period
beginning with the Commencement Date and each twelve-month period thereafter;
however, if the Commencement Date is not the first day of a calendar month, the
first Lease Year shall be the period beginning with the Commencement Date and
ending at the expiration of the twelve-month period that begins with the first
day of the first full calendar month of the Term. The first monthly installment
of Base Rent, plus the other monthly charges set forth in Section 2.(c), shall
be due on the Commencement Date; thereafter, monthly installments of Base Rent
shall be due on the first day of each calendar month following the Commencement
Date. If the Term begins on a day other than the first day of a month or ends on
a day other than the last day of a month, the Base Rent and additional rent for
such partial month shall be prorated.

          (b)  Tenant shall deposit with Landlord on the date hereof $57,478.96
(the "SECURITY DEPOSIT"), which shall be held by Landlord to secure Tenant's
obligations under this Lease; however, the Security Deposit is not an advance
rental deposit or a measure of Landlord's damages for an Event of Default
(defined below). In the event Tenant fails to perform any one or more of its
obligations under this Lease, then, after Landlord has given Tenant the notice
and cure period for such failure set forth in Section 19 below, Landlord may use
any portion of the Security Deposit to satisfy Tenant's unperformed obligations
hereunder, without prejudice to any of Landlord's other remedies. If so used,
Tenant shall pay Landlord an amount that will restore the Security Deposit to
its original amount upon request in connection with any waiver of a Tenant
default or modification of this Lease, Landlord may require that Tenant provide
Landlord with an additional amount to be held as part of the Security Deposit
The Security Deposit shall be Landlord's property. Within 30 days after the
expiration or earlier termination of this Lease, Landlord must provide Tenant
with an accounting for the Security Deposit, which accounting must include all
previous deductions from and replenishments of the Security Deposit as well as
Landlord's estimate of the maintenance and repair costs Landlord will incur in
performing Tenant's obligations under this Lease which were not performed in
accordance with the terms of this Lease (the "REMAINING WORK"). Landlord must
return to Tenant the balance of such Security Deposit that will not bc applied
to Tenant's unperformed obligations, together with such accounting, within 30
days after the expiration or earlier termination of this Lease. To the extent
the actual cost to perform Tenant's unperformed obligations is less than the
amount deducted as an estimate of the cost to perform Tenant's unperformed
obligations, Landlord must return such excess to Tenant within 120 days after
the expiration or earlier termination of this Lease. The foregoing requirements
concerning an accounting and return of the Security Deposit shall apply to any
person who succeeds to the interest of

                                       1
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Landlord during the Term, even if such person does not receive the Security
Deposit from the previous landlord or any other person.

          (c)  Tenant shall pay, as additional rent, all costs incurred by
Landlord for the cost of insurance maintained by Landlord under Section 9.(b),
including that portion of the premiums under any blanket or umbrella insurance
policy maintained by Landlord as may be reasonably allocated to the Premises by
Landlord ("PASS-THROUGH EXPENSES").  On the first day of each month, Tenant
shall pay to Landlord an amount equal to 1/12 of Landlord's estimate of the
annual Pass-Through Expenses. The initial monthly payments of Pass-Through
Expenses are based upon Landlord's estimate of the Pass-Through Expenses for the
year in question, and shall be increased or decreased annually to reflect the
projected actual Pass-Through Expenses for that year. Within 90 days after the
end of each calendar year, Landlord shall deliver to Tenant a statement setting
forth the amount of Pass-Through Expenses for such calendar year and the amount
Tenant has paid in respect thereof for such calendar year, together with
evidence of the cost of such Pass-Through Expenses (the "PASS-THROUGH EXPENSE
STATEMENT"). If Tenant's total payments in respect of Pass-Through Expenses for
any year are less than the Pass-Through Expenses for that year, Tenant shall pay
the difference to Landlord within ten days after Landlord's request therefor; if
such payments are more than such Pass-Through Expenses, Landlord shall pay the
difference to Tenant when Landlord delivers to Tenant the Pass-Through Expense
Statement The amounts of the initial monthly installments of Base Rent and
Pass-Through Expenses are as follows:

     Base Rent                          $57,478.96
     Pass-Through Expenses                  560.00
                                        ----------

     Total initial monthly payment      $58,038.96

          (d)  If any payment required of Tenant under this Lease is not paid
when due, Landlord may charge Tenant a fee equal to 5% of the delinquent payment
to reimburse Landlord for its cost and inconvenience incurred as a consequence
of Tenant's delinquency.

          (e)  All payments and reimbursements required to be made by Tenant
under this Lease shall constitute "Rent" (herein so called).

     3.   TAXES

          (a)  Tenant shall pay all taxes, assessments and governmental charges
whether federal, state, county, or municipal and whether they are imposed by
taxing or management districts or authorities presently existing or hereafter
created (collectively, "TAXES") that accrue against the Premises and deliver to
Landlord receipts from the applicable taxing authority or other evidence
acceptable to Landlord to verify the payment thereof at least 30 days before
such Taxes become delinquent If, during the Term, there is levied, assessed or
imposed on Landlord a capital levy or other tax directly on the rent or a
franchise tax, assessment, levy or charge measured by or based, in whole or in
part, upon rent (other than federal, state, or local income taxes), then all
such taxes, assessments, levies or charges, or the part thereof so measured or
based, shall be included within the term "Taxes".

          (b)  Tenant shall (1) before delinquency pay all taxes levied or
assessed against any personal property, fixtures or alterations placed in the
Premises and (2) deliver to Landlord receipts from the applicable taxing
authority or other evidence acceptable to Landlord to verify that such taxes
have been paid at least ten days before such Taxes become delinquent If any such
taxes are levied or assessed against Landlord or Landlord's property and (A)
Landlord pays them or (B) the assessed value of Landlord's property is increased
thereby and Landlord pays the increased taxes, then Tenant shall pay to Landlord
such taxes within ten days after Landlord's request therefor.

          (c)  Tenant may, at its expense, contest the validity or amount of any
Taxes in accordance with Law, in which event the payment thereof may be
deferred, as permitted by Law, during the pendency of such contest, if
diligently prosecuted. Within 15 days before any contested Taxes become due,
Tenant shall deposit with Landlord an amount sufficient to pay such contested
item (together with any interest, fees, and penalties that may accrue during any
such contest), which amount shall be applied to the payment of such items when
the amount thereof shall be finally determined. Nothing herein, however, shall
permit any Taxes to remain unpaid for any interval that would permit the
Premises, or any part thereof, to be sold or seized by any governmental
authority for the nonpayment of Taxes. If at any time, in the reasonable
judgment of Landlord, it shall become necessary to do so, Landlord may, after
written notice to Tenant, under protest, if so requested by Tenant, apply the
amounts so deposited or so much thereof as may be required to prevent a sale or
seizure of the Premises or foreclosure of any lien created thereon to secure
payment of such unpaid Taxes. Tenant shall pay all penalties, interest, and fees
assessed because of Tenant's failure to pay Taxes when due, and Tenant shall
indemnify, defend, and hold harmless Landlord from and against any costs,
liability, or damage incurred by Landlord arising out of or attributable to
Tenant's failure to pay Taxes when due. If required by Law, Landlord shall join
in any contest proceedings brought by Tenant, at Tenant's expense.

          (d)  If Tenant fails timely to deliver evidence of the payment of the
amounts required to be paid by Tenant under this Section 3, then Landlord may
pay such amounts, if unpaid, in which case, Tenant shall reimburse to Landlord
all amounts so paid within ten days after Landlord delivers to Tenant written
notice thereof.

          (e)  If, after the date hereof, a material adverse change occurs in
Tenant's financial condition or if an Event of Default occurs, then, at
Landlord's option, Tenant shall pay to Landlord a sum equal to 1/12th of the
annual Taxes payable under this Lease on the first day of each month during the
Term. Landlord shall hold such payments in a non-interest bearing account. All
such monthly payments of Taxes shall be based on Landlord's reasonable estimate
of the Taxes due for the year in question, and any deficiency of funds in the
escrow account shall be paid by Tenant to Landlord upon demand. If an Event of
Default occurs, Landlord may apply any funds in the escrow account to the
satisfaction of any unperformed obligation of Tenant under this Lease.

                                       2
<PAGE>

     4.   LIMITED LANDLORD OBLIGATIONS.  Except as provided in Section 5.(b),
Landlord shall not be required to maintain, repair or perform any other
obligations with respect to the Premises. Except as specifically provided
elsewhere in this Lease, Tenant's obligation to pay rent hereunder shall be
absolute and net of all expenses incurred in connection with the operation,
maintenance, ownership and management of the Premises.

     5.   MAINTENANCE AND REPAIR OBLIGATIONS.

          (a)  TENANT'S OBLIGATIONS. Except for those items described in Section
5.(b) below as being Landlord's responsibility to maintain, repair or replace,
Tenant shall maintain all parts of the Premises in good condition and repair.
Such obligation includes, without limitation, all electrical, plumbing, heating,
ventilation, and air conditioning, life-safety lighting and other mechanical
systems and equipment (collectively, the "BUILDING SYSTEMS"), the roof, and
skylights, windows, plate glass, doors, and partitions. If any portion of the
Premises cannot be fully repaired or restored, then Tenant shall promptly
replace such portion of the Premises, regardless of whether the benefit of such
replacement extends beyond the Term; provided, however, that in no event will
Tenant be responsible for replacing the roof membrane or roof support system,
which is Landlord's responsibility under the terms of Section 5.(b) below.
Without limiting the generality of the foregoing, Tenant shall perform the
following obligations:

               (1)  Tenant shall maintain the parking areas, driveways, alleys,
     landscaping and grounds surrounding the Premises in a clean and sanitary
     condition, consistent with the operation of a first-class office building,
     including prompt maintenance, repairs and replacements of(A) the exterior
     of the Building (including painting), but not the items set forth in
     Section 5.(b) below, (B) sprinkler systems and sewage lines, (C) pavement
     curbs, and sidewalks, and (D) any other items normally associated with the
     foregoing.

               (2)  Tenant shall maintain the Building Systems in good repair
     and condition and in accordance with Law and with such equipment
     manufacturers' suggested operation/maintenance service program; such
     obligation shall include replacement of all equipment necessary to maintain
     such equipment and systems in good working order. At least 14 days before
     the end of the Term, Tenant shall deliver to Landlord a certificate from an
     engineer reasonably acceptable to Landlord certifying that the Building
     Systems are then in good repair and working order.

          (b)  LANDLORD'S OBLIGATIONS. Landlord's maintenance obligations are
limited to maintaining, repairing and replacement of the foundation and
structural members of the exterior walls of the Building and replacement of the
Building's roof support system and roof membrane. Landlord shall not be
responsible (I) for any such work until Tenant delivers to Landlord written
notice of the need therefor, or (2) for alterations to such items required by
Law because of Tenant's use of the Premises (which alterations shall be
performed by Tenant). Landlord's liability for any such item shall be limited to
the cost of performing such word If there is a dispute as to whether the roofs
support system or membrane is required to be replaced, then Landlord and Tenant
shall mutually appoint an engineer with at least five years experience in
evaluation of commercial building roof systems, who will determine whether
replacement of the roofs support system or membrane is required. The
determination of such engineer shall be binding on Landlord and Tenant If
Landlord and Tenant cannot agree on such an engineer, then either Landlord or
Tenant may request the Dallas division of the American Arbitration Association
(the "AAA") to appoint an engineer with the requirements listed above to
determine whether replacement of the roofs support system or membrane is
required. The appointment by the AAA and decision of such engineer shall be
binding on Landlord and Tenant Landlord shall be in default under this Lease if
Landlord fails to perform any of its obligations within 30 days after receiving
from Tenant written notice specifying such failure; however, if such failure
cannot reasonably be cured within such 30-day period, but Landlord begins to
cure such failure within such 30-day period, Landlord thereafter diligently
pursues the curing thereof to completion, and such failure is cured within 120
days after Tenant first delivered to Landlord written notice thereof, then
Landlord shall not be in default hereunder. If Landlord fails to perform its
obligations within the time periods specified in the previous sentence, then
Tenant may perform such work and offset the costs thereof from the next due
installment of Base Rent and other amounts due under this Lease. Tenant's right
to perform work under this Section 5.(b) is subject to the following conditions:

               (1)  all such work shall be performed in a good and workmanlike
     manner and in accordance with Law;

               (2)  except in an emergency, all such work shall be performed in
     accordance with plans and specifications approved by Landlord (which
     approval shall not be unreasonably withheld), whose approval shall be
     deemed given if Landlord fails to disapprove with specific objections any
     submitted plans and specifications within three business days after Tenant
     delivers such plans to Landlord;

               (3)  all such work shall be performed by contractors which
     maintain commercial liability insurance in an amount not less than
     $l,000,000 per occurrence (which insurance [except in the case of an
     emergency] names Landlord as an additional insured) and, except in an
     emergency, which contractors are reasonably acceptable to Landlord;
     Landlord's approval shall be deemed given if Landlord fails to disapprove
     any contractor within three business days after Tenant delivers to Landlord
     a request for its consent thereto and if Landlord disapproves a contractor,
     Landlord must deliver to Tenant a list of at least five (5) contractors
     whose principal offices are in the Dallas - Fort Worth area who are
     acceptable to Landlord and if Landlord fails to do so, such disapproval
     will be deemed to be approval; and

               (4)  Tenant delivers to Landlord "as-built" plans of the work
     performed by Tenant.

          (c)  Tenant may, at its option and expense, engage a third party
manager reasonably acceptable to Landlord to monitor and administer Tenant's
maintenance and repair obligations under this Lease. For purposes hereof, any
Affiliate of Trammell Crow Company shall be acceptable to Landlord.  Waterview
Parkway, L.P.

                                       3
<PAGE>

("WATERVIEW") (or an Affiliate thereof) shall monitor Landlord's
performance of its obligations hereunder and correspond with Landlord in
connection therewith at no additional cost to Tenant

     6.   ALTERATIONS.  Landlord hereby expressly consents to Tenant making
alterations and installing equipment to the Premises substantially as described
in or shown on EXHIBIT G attached to and made a part of this Lease for all
purposes and to installing a security system in the Premises. Tenant shall not
make any other alterations, additions or improvements to the Premises which
affect the Building Systems or the Building's Structure (defined below) without
the prior written consent of Landlord which consent cannot be unreasonably
withheld or delayed and which will be deemed given if not withheld in accordance
with the terms of this Section 6 within 30 days after the date upon which Tenant
delivers the items described in the next succeeding sentence. Landlord shall not
be required to notify Tenant of whether it consents to any such alteration,
addition or improvements until it has received plans and specifications therefor
prepared by a licensed engineer which are sufficiently detailed to allow
construction of the work depicted thereon to be performed in a good and
workmanlike manner. If Landlord disapproves of any plans and specifications,
Landlord must notify Tenant in writing of such disapproval and must state in
reasonable detail those items of which Landlord does not approve and the changes
Tenant must make before Landlord will approve such plans and specifications for
such alterations. If Tenant revises the plans and specifications in accordance
with Landlord's requirements, Landlord will not be permitted to object to any
item shown in reasonable detail on the preceding draft of the plans and
specifications or to those items Tenant altered in accordance with Landlord's
comments. Landlord's approval of any plans and specifications shall not be a
representation that the plans or the work depicted thereon will comply with Law
or be adequate for any purpose, but shall merely be Landlord's consent to
performance of the work. Upon completion of any alteration, addition, or
improvement, Tenant shall deliver to Landlord accurate, reproducible as-built
plans therefor. Tenant may erect shelves, bins, machinery and trade fixtures and
install equipment provided that such items do not overload or adversely affect
the Building's Structure or the Building System& Unless Landlord specifies in
writing, all alterations, additions, and improvements shall be Landlord's
property when installed in the Premises; provided, however, that Tenant may
remove the UPS system, related batteries and the emergency generator described
on EXHIBIT G (the "BACKUP EQUIPMENT") from the Premises and Tenant's security
system. All work performed by a Tenant Party in the Premises (including that
relating to the installations, repair, replacement, or removal of any item)
shall be performed in accordance with Law and in a good and workmanlike manner,
and so as not to damage or alter the Building's Structure or the Building
Systems. when used herein, the term "BUILDING'S STRUCTURE" shall mean the roof
exterior walls, load-bearing columns, and foundation of the Building. Upon
completion of any alteration, additional improvement to the Premises, Tenant
shall deliver to Landlord "as-built" plans and specifications therefor.

     7.   SIGNS.  Tenant shall not place, install or attach any signage,
decorations, or advertising media (collectively, the "SIGNAGE") to the Premises
(a) without obtaining Landlord's prior written approval, which shall not be
unreasonably withheld or delayed and which will not be deemed necessary for
signs incorporating Tenant's then. existing logo or substantially similar to
Tenant's signs in any other location in the United States, or (b) which would
violate any Laws. Tenant shall repair, paint, and/or replace any portion of the
Premises damaged or altered as a result of its Signage when it is removed
(including, without limitation, any discoloration of the Building). Landlord
shall not be required to notify Tenant of whether it consents to any sign until
it (1) has received detailed, to-scale drawings thereof specifying design,
material composition, color scheme, and method of installation. Landlord's
consent to any signs will be deemed given if Landlord does not withhold its
consent in accordance with the terms of this Section 7 within 30 days after the
date upon which Tenant delivers the items described in the immediately preceding
sentence. If Landlord disapproves of any sign, Landlord must notify Tenant in
writing of such disapproval and must state in reasonable detail those items of
which Landlord does not approve and the changes Tenant must make before Landlord
approves such signs. If Tenant revises its sign plans in accordance with
Landlord's requirements, Landlord will not be permitted to object to any item
shown in reasonable detail on the preceding draft of the sign plans or to those
items Tenant altered in accordance with Landlord's comments.

     8.   UTILITIES.  Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with any taxes, penalties, surcharges,
maintenance charges, and the like pertaining to the Tenant's use of the
Premises. Landlord shall not be liable for any interruption or failure of
utility service to the Premises. If Tenant fails to pay any such amounts when
due, Landlord may do so, in which case, Tenant shall reimburse Landlord for all
amounts paid by Landlord within ten days after Landlord's request therefor.

     9.   INSURANCE. (a) Tenant shall maintain (1) workers' compensation
insurance (with a waiver of subrogation endorsement reasonably acceptable to
Landlord) and commercial general liability insurance (with contractual liability
endorsement), including personal injury and property damage in the amount of
$1,000,000 per occurrence combined single limit for personal injuries and death
of persons and property damage occurring in or about the Premises, plus umbrella
liability coverage of at least $5,000,000 per occurrence, and (2) all risk
insurance covering (A) the replacement cost of all alterations, additions,
partitions and improvements installed in the Premises, (B) the replacement cost
of all of Tenant's personal property in the Premises, and (C) loss of profits in
the event of an insured peril damaging the Premises. Such policies shall (I)
name Landlord, Landlord's agents, Landlord's Mortgagee's and their respective
Affiliates (defined below), as additional insureds (and as loss payees on the
fire and extended coverage insurance), (ii) be issued by an insurance company
with at least a Best's B rating and which does not have any insurance policy
which exceeds one percent (1%) of the adjusted policyholders' surplus, (iii)
provide that such insurance may not be cancel led unless 30-days' prior written
notice is first given to Landlord and Landlord's Mortgagee, (iv) be delivered to
Landlord by Tenant before the Commencement Date and at least 15 days before each
renewal thereof and (v) provide primary coverage to Landlord when the claim is
for a matter covered by Tenant's indemnity set forth in Section 11 below and any
policy issued to Landlord is similar or duplicate in coverage, in which case
Landlord's policy shall be excess over Tenant's policies.

          (b)  Landlord shall maintain insurance covering the risk of direct
physical losses for the Building's shell in the amount of its full replacement
cost, with a deductible amount not to exceed $50,000, including rent loss

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insurance. Such insurance shall be issued by an insurance company with at least
a Best's B rating and which does not have any insurance policy which exceeds one
percent (1%) of the adjusted policyholders' surplus, endorsed to provide that
the underwriter thereof shall have no subrogation rights against Tenant.

     10.  DESTRUCTION OF OR DAMAGE TO PROPERTY.

          (a)  SUBSTANTIAL DAMAGE. In the event the Premises are damaged or
destroyed by fire or other casualty, Tenant must give Landlord written notice of
the occurrence of such fire or other casualty (a "CASUALTY") Within 30 days
after Tenant notifies Landlord of the occurrence of such damage or destruction,
Landlord must deliver to Tenant a realistic construction schedule, prepared by a
reputable general contractor selected by Landlord, setting forth such general
contractor's estimated time periods to complete key portions of the repair and
restoration, and to fully complete such repair and restoration (the
"CONSTRUCTION SCHEDULE"). If the Construction Schedule indicates that the repair
and restoration will not be substantially completed within eight months after
the restoration plans have been approved by Tenant (such damage being herein
termed "SUBSTANTIAL DAMAGE"), then either Landlord or Tenant may terminate this
Lease by written notice to the other at any time within 30 days after Landlord
delivers the Construction Schedule to Tenant. Such termination shall be
effective as of the date set forth in such notice, which date cannot be less
than 30 days after the date of such notice nor more than 90 days after the date
of such notice. In the event neither Landlord nor Tenant terminates this Lease
as a result of such fire or other Casualty, but Landlord fails to substantially
complete such repair and restoration as provided under Section 10.(c) within
eight months after the restoration plans have been approved by Tenant (or such
longer period as specified in the Construction Schedule) plus additional days of
delay in obtaining substantial completion caused by force majeure or by a Tenant
Party's acts or omissions, then Tenant may terminate this Lease by delivering
written notice to Landlord, specifying a termination date no later than 60 days
after the date of such notice, at any time after the end of the applicable time
period but before the substantial completion of such repair and restoration. If
(1) Landlord is required to apply a substantial amount of the insurance proceeds
to reduce the balance of any debt secured by a mortgage on the Premises, or (2)
the damage is not of a type covered or required to be covered by Landlord's
insurance, then Landlord may terminate this Lease by delivering written notice
to Tenant thereof, effective as the date specified in such notice, which date
shall not be earlier than 60 days after the date of such notice. Landlord must
exercise the termination rights specified in the previous sentence, if at all,
within 60 days after the occurrence of the Casualty in question.

          (b)  DAMAGE DURING THE LAST LEASE YEAR. In the event a material
portion of the Premises is damaged or destroyed by fire or other Casualty, and
neither Landlord nor Tenant is entitled to terminate this Lease in accordance
with Section 10.(a) above, but the remainder of the Term is less than 12 months,
either Landlord or Tenant may terminate this Lease by written notice to the
other within 30 days after the occurrence of such damage or destruction;
provided, however, that if Landlord exercises such right and there is an renewal
Term outstanding, Tenant may override Landlord's termination right by exercising
the next available option within 30 days after Landlord delivers written notice
to Tenant advising Tenant of its intention to terminate this Lease. Any
termination under this Section 10.(b) is effective as of the date set forth in
such notice, which date cannot be less than 30 days after the date of such
notice nor more than 90 days after the date of such notice. As used in this
Section 10.(b), a "material portion of the Premises" means damage or destruction
whose repair costs equal or exceed 10% of the value of the Building before such
destruction.

          (c)  RESTORATION AFTER DAMAGE OR DESTRUCTION: RENT ABATEMENT. In the
event neither panty terminates or is entitled to terminate this Lease under
Sections 10.(a) and 10.(b) above, then Landlord must diligently begin to repair
and restore the Building's shell and the other portions of the Premises, to
substantially the same condition they were in as of the date of such fire or
other Casualty, and (1) Tenant shall pay to Landlord the deductible amount
applicable to such damage or destruction under Landlord's insurance policy and
Tenant's insurance policy, (2) all insurance proceeds payable in respect of
improvements to the Premises under Tenant's insurance policy shall be paid to
Landlord for application to the repair work, and (3) to the extent Tenant's
insurance is insufficient to repair and restore such improvements, Tenant shall
pay to Landlord for the costs thereof in advance; it being understood that
Landlord's obligation to repair and restore the Premises shall be limited to
insurance proceeds paid and payments made by Tenant in respect thereof, provided
that Landlord maintains the insurance required under Section 9.(b). During such
repair and restoration, the Base Rent and other charges under this Lease will
abate in an amount that is fair and equitable under the circumstances, taking
into account, among other things, the extent to which Tenant closes down all or
a portion of its operations until such repair and restoration has been completed
and the nature and extent of the interference with Tenant's business operations
as a result of such casualty as well as the repair and restoration process.

     11.  LIABILITY. INDEMNIFICATION. WAIVER OF SUBROGATION AND NEGLIGENCE
CLAIMS.

          (a)  Subject to Section 11.(b), Tenant shall indemnify, defend, and
hold harmless Landlord, its successors, assigns, agents, employees, contractors,
partners, directors, officers and affiliates (collectively, the "INDEMNIFIED
PARTIES") from and against all fines, suits, losses, costs, liabilities, claims,
demands, actions and judgments of every kind or character (1) arising from
Tenant's failure to perform its covenants hereunder, (2) recovered from or
asserted against any of the Indemnified Parties on account of any Loss (defined
below) to the extent that any such Loss may be incident to, arise out of; or be
caused, either proximately or remotely, wholly or in part, by a Tenant Panty or
any other person entering upon the Premises under or with a Tenant Party's
express or implied invitation or permission, (3) arising from or out of the
occupancy or use by a Tenant Party or arising from or out of any occurrence in
the Premises, howsoever caused, or (4) suffered by, recovered from or asserted
against any of the Indemnified Parties by a Tenant Party (defined below), EXCEPT
TO THE EXTENT LANDLORD'S NEGLIGENCE CAUSED SUCH LOSS OR DAMAGE.

          (b)  Landlord shall not be liable to Tenant or those claiming by,
through, or under Tenant for any injury to or death of any person or persons or
the damage to or theft destruction, loss, or loss of use of any property or
inconvenience (a "LOSS") caused by casualty, theft, fire, third parties, or any
other matter (including Losses arising through repair or alteration of any part
of the Building, or failure to make repairs, or from any other cause), EXCEPT TO

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THE EXTENT LANDLORD'S NEGLIGENCE CAUSED SUCH LOSS IN WHOLE OR IN PART. Each of
Landlord and Tenant waives any claim it might have against the other for any
damage to or theft, destruction, loss, or loss of use of any property, to the
extent the same is insured against under any insurance policy maintained by it
that covers the Premises, Landlord's or Tenant's fixtures, personal property,
leasehold improvements, or business, or is required to be insured against by it
under the terms hereof, REGARDLESS OF WHETHER THE NEGLIGENCE OR FAULT OF THE
OTHER PARTY CAUSED SUCH LOSS: HOWEVER, LANDLORD'S WAIVER SHALL BE INAPPLICABLE
TO ANY DEDUCTIBLE AMOUNT MAINTAINED UNDER LANDLORD'S INSURANCE POLICIES.

     12.  USE.  Tenant may use the Premises solely for office uses, light
fabrication and assembly, or manufacturing laboratory as those uses are defined
in the Dallas Development Code and High Technology uses and Geological Research
and Development as these uses are defined below:

          HIGH TECHNOLOGY means as a process or related to a process for data
          transmission, numeric computation, word processing, graphics display
          and analysis, biologic or chemical research and analysis as any of
          these may pertain to any consumer, business, or government good, be it
          a service or a product using electronics or quasi-electronics rather
          than mechanical means.

          QUASI-ELECTRONICS means including fibre-optics, laser technology, and
          microwaves which may be manufactured or transmitted by other than
          electronic means.

          GEOLOGICAL RESEARCH AND DEVELOPMENT means the study of the earth's
          elements and development and manufacture of products for the study of
          the earth's elements so long as the development and manufacturing
          process does not cause noxious odors, noise, or other hazards to the
          environment or to persons living within 50 miles of the facility.

     Under no circumstances will Tenant be obligated to occupy or operate for
business at the Premises, it being understood and agreed that Tenant may at any
time cease occupying or operating at all or a part of the Premises.

     Tenant shall not use the Premises to receive, store or handle any product,
material or merchandise that is explosive or highly inflammable or hazardous.
Tenant shall be solely responsible for complying with all Laws applicable to
Tenant's specific use, occupancy, and condition of the Premises. Tenant shall
not permit any objectionable or unpleasant odors, smoke, dust, gas, light, noise
or vibrations to emanate from the Premises; nor take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with, or endanger
Landlord or any other person; nor permit the Premises to be used for any purpose
or in any manner that would void the insurance thereon.

     13.  LANDLORD'S LIMITED RIGHT OF ACCESS. Landlord acknowledges that because
of the extremely high value and sensitivity of the equipment in the Premises, as
well as the information processed by such equipment, Landlord cannot have, and
does not have, a free right of access to the Premises and is not entitled to
have a key to the Premises. Except in the case of an emergency (defined as an
event which poses the immediate threat of injury or death to persons or
significant damage to property), Landlord (together with prospective and
existing mortgagees, prospective purchasers, and [during the last six months of
the Term] prospective tenants) may only enter the Premises after notice to
Tenant (which may be made by telephone as long as Landlord's representative
speaks to the facilities manager for the Building) and while representatives
designated by the facilities manager are present Such representatives shall be
available to accompany Landlord and any prospective or existing mortgagee,
prospective purchaser, or (during the last six months of the Term) prospective
tenant within forty-eight hours after Landlord gives notice to Tenant of its
desire to enter the Premises. Such entry must be made in a manner designed to
minimize to the extent reasonably possible the operations and business conducted
at the Premises (however, Landlord shall not be required to enter the Premises
after normal business hours). In order to allow Landlord to deal with
emergencies while preserving Tenant's right to control access to the Premises,
Tenant will provide a list of names, addresses, telephone, and pager numbers for
employees or consultants whom Landlord may contact at any time when an emergency
occurs and who will be available to the Premises within two (2) hours after
Landlord makes contact with such persons. Tenant may make changes to such list
from time to time and deliver notice of such changes to Landlord and such new
list will replace or add to, as specified in such notice, any list previously in
Landlord's possession. Unless, in Landlord's good faith, reasonable judgment,
the nature of the emergency makes it imprudent to delay entry into the Premises,
Landlord must use every effort to contact every person on the list until someone
can arrive at the Premises and must not enter the Premises until the earlier of
(a) one (1) hour after Landlord has contacted every person on the list and been
unable to obtain a commitment from any person on such list that such person will
arrive at the Premises within two (2) hours after such contact, (b) two (2)
hours after Landlord makes contact with at least one (1) person on such list and
such person agrees to arrive at the Premises within two (2) hours after such
contact, or (c) when a person on such list arrives at the Premises and
accompanies Landlord into the Premises. During the last six months of the Term,
Landlord may erect a sign on the Premises indicating that the Premises are
available for lease. Otherwise, Landlord may not erect any signs on the
Premises.

     14.  ASSIGNMENT AND SUBLETTING.

          (a)  Tenant shall not, without the prior written consent of Landlord
(which shall not be unreasonably withheld or delayed), (1) assign, transfer, or
encumber this Lease or any estate or interest herein, whether directly or by
operation of law, (2) permit any other entity to become Tenant hereunder by
merger, consolidation, or other reorganization, (3) if Tenant is an entity other
than a corporation whose stock is publicly traded, permit the transfer of an
ownership interest in Tenant so as to result in a change in the current control
of Tenant unless such transfer occurs in connection with a public offering of
stock of Tenant on a nationally recognized securities exchange (any such public
offering shall not be considered a Transfer hereunder), (4) sublet any portion
of the Premises, (5) grant any license, concession, or other right of occupancy
of any portion of the Premises, or (6) permit the use of the Premises by any
parties other than Tenant (any of the events listed in Sections 14.(a)(I)
through 14.(a)(6) being a "TRANSFER"). Landlord

                                       6
<PAGE>

may withhold its consent, in its sole discretion, to any such Transfer to (I)
any governmental agency, (ii) any party which will use hazardous materials in
the Premises (other than those customarily used and stored in space which is
used for office space), or (iii) any party whose use of the Premises will, in
Landlord's engineer's judgment, overload the Building's Structure or any
Building System; however, as a condition to withholding its consent under
clause (iii) of this sentence, Landlord must deliver to Tenant written notice
objecting to the proposed transferee setting forth in reasonable detail the
reason for such objection within ten days after Tenant has delivered to
Landlord written notice requesting such consent together with such
information as may be reasonably necessary for Landlord to evaluate the
effect of the proposed transferee's use on the Building's Structure and
Building Systems. If Tenant requests Landlord's consent to a Transfer, then
Tenant shall provide Landlord with a written description of all terms and
conditions of the proposed Transfer, and the following information about the
proposed transferee: name and address; reasonably satisfactory information
about its proposed use of the Premises; financial statements of the
transferee for its most recently ended fiscal year and fiscal quarter and a
credit report from Dunn and Bradstreet for the transferee (or, if
unavailable, other credit information reasonably acceptable to Landlord); and
at least two references from the proposed transferee's bank. If Landlord
fails to notify Tenant that it disapproves of a Transfer within ten days
after Tenant has delivered to Landlord written notice requesting such consent
together with the information specified in the previous sentence, then
Landlord shall be deemed to have approved of the Transfer in question. Tenant
shall reimburse Landlord for its reasonable attorneys' fees and other
expenses incurred in connection with considering any request for its consent
to a Transfer. If Landlord consents to a proposed Transfer, then the proposed
transferee shall deliver to Landlord a written agreement whereby it expressly
assumes the Tenant's obligations hereunder (however, any transferee of less
than all of the space in the Premises shall be liable only for obligations
under this Lease that are properly allocable to the space subject to the
Transfer, and only to the extent of the rent it has agreed to pay Tenant
therefor) arising from and after the date of such Transfer (however, in the
case of a merger, consolidation, other similar business arrangement, or sale
of all or substantially all of Tenant's assets, the Transferee must assume
all of Tenant's obligations hereunder, regardless of when they accrued). No
transfer shall release Tenant from performing the obligations of the "Tenant"
under this Lease, but rather Tenant and its transferee shall be jointly and
severally liable therefor. Landlord's consent to any Transfer shall not waive
Landlord's rights as to any subsequent Transfers. If an Event of Default
occurs while the Premises or any part thereof are subject to a Transfer, then
Landlord, in addition to its other remedies, may collect directly from such
transferee all rents becoming due to Tenant and apply such rents against
Tenant's rent obligations. Tenant authorizes its transferees to make payments
of rent directly to Landlord upon receipt of notice from Landlord to do so.

          (b)  Landlord may, within 30 days after submission of Tenant's written
request for Landlord's consent to a Transfer, cancel this Lease (or, as to a
subletting or assignment, cancel as to the portion of the Premises proposed to
be sublet or assigned) as of the date the proposed Transfer was to be effective.
If Landlord cancels this Lease as to any portion of the Premises, then this
Lease shall cease for such portion of the Premises and Tenant shall pay to
Landlord all rent accrued through the cancellation date relating to the portion
of the Premises covered by the proposed Transfer. Thereafter, Landlord may lease
such portion of the Premises to the prospective transferee (or to any other
person) without liability to Tenant. The termination right set forth in this
Section 14.(b) shall not apply to Permitted Transfers or to any other Transfer
to which Landlord specifically consents in writing.

          (c)  If no Event of Default exists, all compensation received by
Tenant for a Transfer in respect of the interval in question that exceeds the
Base Rent and the Pass-Through Expenses allocable to the portion of the Premises
covered thereby for the same interval shall be payable as follows:

               (1)  first, to Tenant until Tenant has received an amount equal
     to all actual, third-party, out-of-pocket costs incurred by Tenant in
     connection with such Transfer (including, without limitation, brokerage
     commissions, attorneys' fees and expenses, tenant-finish-work, and other
     tenant inducements); and

               (2)  thereafter, 50% to Landlord and 50% to Tenant.

If an Event of default exists, all such excess compensation shall be payable to
Landlord. Tenant shall hold all amounts it receives which are payable to
Landlord in trust and shall deliver all such amounts to Landlord within ten days
after Tenant's receipt thereof.

          (d)  Notwithstanding the foregoing, Tenant may Transfer all or part of
its interest in this Lease or all or part of the Premises to the following types
of entities (a "PERMITTED TRANSFEREE") without the written consent of Landlord
(a "PERMITTED TRANSFER", provided that the Premises will continue to be used
only for the Permitted Use and the conditions set forth below are satisfied:

               (1)  an Affiliate of Tenant;

               (2)  any entity in which or with which Tenant, or its corporate
     successors is merged or consolidated, in accordance with applicable
     statutory provisions governing merger and consolidation of such entities,
     so long as (A) Tenant's obligations hereunder are assumed by the entity
     surviving such merger or created by such consolidation; and (B) the
     surviving or created entity will, immediately after such transaction, have
     an unsecured debt rating of at least BBB as established by Standard &
     Poor's Corporation;

               (3)  any entity acquiring all or substantially all of Tenant's
     assets if such entity's unsecured credit rating immediately after such
     acquisition is at least BBB as established by Standard & Poor's
     Corporation;

               (4)  any entity whose unsecured debt rating is at least BBB as
     established by Standard & Poor's Corporation and whose use of the Premises
     would not involve any use described in clauses (ii) or (iii) of Section
     14.(a); or

                                       7

<PAGE>

               (5)  any sublessee provided that, after giving effect to such
     sub lease, the aggregate portion of the Premises that would then be subject
     to either a sublease or partial assignment of this Lease to persons other
     than those described in clauses (1), (2), (3) or (4) does not exceed 25% of
     the rentable area of the Premises and the sublessee is not a governmental
     agency or a person whose use of the Premises would involve matters
     described in clauses (ii) or (iii) of Section 14.(a).

Tenant shall promptly notify Landlord of any such Permitted Transfer. Any
Transfer by a Permitted Transferee described in clause (5) above shall require
Landlord's prior written consent Any Transfer by a Permitted Transferee
described in clauses (1) through (4) above to Mother Permitted Transferee shall
not require Landlord's consent, but shall require prompt notification to
Landlord thereof; all other Transfers by any such Permitted Transferee shall
require Landlord's written consent.

     15.  CONDEMNATION.  If a material portion of the Premises is taken for any
public or quasi-public use by right of eminent domain or private purchase in
lieu thereof (a "TAKING"), then Tenant may terminate this Lease by delivering to
Landlord written notice thereof within 30 days after the Taking, in which case
rent shall be abated during the unexpired portion of the Term, effective on the
date of such Taking. If this Lease is not terminated because of a Taking, then
rent payable during the unexpired portion of the Term shall be reduced to such
extent as may be fair and reasonable under the circumstances, and Landlord shall
repair any damage to the Premises caused by the Taking, to the extent of the
award actually received by Landlord (less than the cost incurred in connection
with the receiving of such award and any amounts payable to a Landlord's
Mortgagee). Landlord shall notify Tenant of the amount Landlord receives in
connection with any such Taking within 30 days after such amount is finally
determined. If such amounts are insufficient to fully restore the Premises, then
Tenant may, at its sole option and without obligation to do so, fund the extra
amounts necessary to fully restore the Premises. All compensation awarded for
any Taking shall be the property of Landlord, and Tenant assigns any interest it
may have in any such award to Landlord; however, Landlord shall have no interest
in any award made to Tenant for loss of business or goodwill or for the taking
of Tenant's fixtures, personal property, or other improvements that Tenant is
entitled to remove from the Premises at the end of the Term, if a separate award
for such items is made to Tenant For purposes of this Section 15, the phrase "a
material portion of the Premises Is taken" shall mean a Taking which affect the
interior space of the Building, reduces the number of parking spaces available
for Tenant's use to less than one space per 333 rentable square feet in the
Building or permanently denies access to the Premises from publicly-dedicated
roads; however, in the case of removed parking spaces, Landlord may, within 180
days after such Taking, construct additional parking on the Land so that the
number of parking spaces on the Land shall be at least one space per 333
rentable square feet in the Building, in which case, Tenant shall not be
entitled to terminate this Lease because of such Taking. If Landlord elects to
construct additional parking spaces, then it must deliver to Tenant written
notice thereof with in 30 days after the Taking.

     16.  SURRENDER OF PREMISES: HOLDING OVER.

          (a)  No act by Landlord shall be an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid
unless it is in writing and signed by Landlord. At the end of the Term or the
termination of Tenant's right to possess the Premises, Tenant shall (1) deliver
to Landlord the Premises with all improvements located thereon, other than the
Backup Equipment and Tenant's security system, in good repair and in working
order, reasonable wear and tear (subject however to Tenant's maintenance
obligations) and damage by casualty or condemnation excepted, (2) deliver to
Landlord all keys to the Premises, and (3) remove all signage placed on the
Premises by or at Tenant's request All fixtures, alterations, additions, and
improvements (whether temporary or permanent) shall be Landlord's property and
shall remain on the Premises except as provided in the next two sentences.
Tenant may remove all the Backup Equipment as well as Tenant's security system
and all unattached fixtures, furniture, and personal property placed in the
Premises by Tenant Additionally, Tenant shall remove such alterations,
additions, improvements, fixtures, equipment, wiring, furniture, and other
property as Landlord may request unless Landlord has specifically approved in
writing the installation thereof and did not indicate to Tenant in writing, when
such approval was granted, that Tenant would have to remove the item at the end
of the Term. All work required of Tenant under this Section 16.(a) shall be
coordinated with Landlord and be done in a good and workmanlike manner, in
accordance with all Laws, and so as not to damage the Building. Tenant shall, at
its expense, repair all damage caused by any work performed by Tenant under this
Section 16.(a).

          (b)  If Tenant remains in possession of the Premises after the
expiration of the Term without the execution of a new lease or of an agreement
extending the Term, but Tenant and Landlord are engaged in negotiations for a
new lease or extension, then, Tenant will be deemed to be occupying the Premises
as a Tenant from month to month, subject to all of the terms of this Lease as
may be applicable to a month to month tenancy, and at the Base Rent and other
charges provided for in the last preceding year, prorated on a monthly basis.
If, however, Landlord has delivered notice to Tenant that it does not wish to
continue or does not wish to begin negotiations, as the case may be, then,
effective as of the later of 90 days after the date Landlord delivers such
notice to Tenant or the expiration date of the Term, Tenant must vacate the
Premises. If Tenant does not do so, then Tenant shall be a holdover tenant and
during the holdover period Tenant must pay as Base Rent an amount equal to two
hundred percent (200%) of the Base Rent provided for in the last preceding year,
plus other rent which would be due during such holdover period if this Lease
were still in effect Additionally, Tenant shall defend, indemnify, and hold
harmless Landlord from any damage, liability and expense (including attorneys'
fees and expenses) incurred because of such holding over. No payments of money
by Tenant to Landlord after the Term shall reinstate, continue or extend the
Term, and, except as set forth above, no extension of the Term shall be valid
unless it is in writing and signed by Landlord and Tenant.

     17.  QUIET ENJOYMENT. Provided Tenant has fully performed its obligations
under this Lease, Tenant shall peaceably and quietly hold and enjoy the Premises
for the Term, without hindrance from Landlord or any parry claiming by, through,
or under Landlord, but not otherwise.

                                       8
<PAGE>

     18.  EVENTS OF DEFAULT. Each of the following events shall constitute an
"EVENT OF DEFAULT" under this Lease:

          (a)  Tenant fails to pay any rent when due and such failure continues
for a period of ten days after Landlord has delivered to Tenant written notice
thereof

          (b)  The filing of a petition by or against Tenant or any guarantor of
Tenant's obligations hereunder (1) in any bankruptcy or other insolvency
proceeding; (2) seeking in any relief under any debtor relief Law; (3) for the
appointment of a liquidator, receiver, trustee, custodian, or similar official
for all or substantially all of Tenant's property or for Tenant's interest in
this Lease; or (4) for reorganization or modification of Tenant's capital
structure (however, if any such petition is filed against Tenant, then the
filing of such petition shall not constitute an Event of Default, unless it is
not dismissed within 45 days after the filing thereof.

          (c)  Tenant fails to comply with any term, provision or covenant of
this Lease (other than those listed in this Section 18), and such failure
continues for 30 days after written notice thereof to Tenant; however, if such
default is not susceptible of being cured within such 30-day period, then an
Event of Default shall not occur hereunder if Tenant begins to cure such default
within 30.day period, thereafter diligently pursues such cure, and such default
is cured within 120 days after Landlord initially delivered to Tenant written
notice of such default.

     19.  REMEDIES.

          (a)  Upon any Event of Default, Landlord may, in addition to all other
rights and remedies afforded Landlord hereunder or by Law, take any of the
following actions:

               (1)  Terminate this Lease by giving Tenant written notice
     thereof, in which event, Tenant shall pay to Landlord the sum of (A) all
     rent accrued hereunder through the date of termination, and (B) all amounts
     due under Section 19.(b) and (C) an amount equal to (I) the total rent that
     Tenant would have been required to pay for the remainder of the Term
     discounted to present value at a per annum rate equal to the "Discount
     Rate" as published on the date this Lease is terminated by The Wall Street
     Journal, Southwest Edition, in its listing of"Money Rates," minus (ii) the
     then present fair rental value of the Premises for such period, similarly
     discounted; or

               (2)  Terminate Tenant's right to possess the Premises without
     terminating this Lease by giving written notice thereof to Tenant, in which
     event Tenant shall pay to Landlord (A) all rent and other amounts accrued
     hereunder to the date of termination of possession, (B) all amounts due
     from time to time under Section 19.(b) as and when due, and (C) all rent
     and other sums required hereunder to be paid by Tenant during the remainder
     of the Term, as they come due under this Lease, diminished by any net sums
     (i.e., after deducting all costs incurred in connection with such reletting
     that were not paid [or are not required to be paid] by Tenant under Section
     19.(b)(4)) thereafter received by Landlord through reletting the Premises
     during such period. Landlord shall use reasonable efforts to relet the
     Premises on such terms and conditions as Landlord may reasonably determine
     (including a term different than the Term, rental concessions, and
     alterations to, and improvement of, the Premises); however, in determining
     whether Landlord shall have used reasonable efforts to relet the Premises,
     Landlord shall not be obligated to relet the Premises to any person whose
     unsecured debt rating is less than BBB as established by Standard & Poor's
     Corporation. Tenant's obligations hereunder shall not be diminished because
     of Landlord's failure to relet the Premises or to collect rent due for a
     reletting except to the extent required by Law. Tenant shall not be
     entitled to the excess of any consideration obtained by reletting over the
     rent due hereunder. Reentry by Landlord in the Premises shall not affect
     Tenant's obligations hereunder for the unexpired Term; rather, Landlord
     may, from time to time, bring action against Tenant to collect amounts due
     by Tenant, without the necessity of Landlord's waiting until the Term ends.
     Unless Landlord delivers written notice to Tenant expressly stating that it
     has elected to terminate this Lease, all actions taken by Landlord to
     exclude or dispossess Tenant of the Premises shall be deemed to be taken
     under this Section 19.(a)(2). If Landlord elects to proceed under this
     Section 19.(a)(2), it may at any time elect to terminate this Lease under
     Section 19.(a)(1).

Additionally, Landlord may perform Tenant's un performed obligations hereunder.

          (b)  Tenant shall pay to Landlord all costs incurred by Landlord
(including court costs and reasonable attorneys' fees and expenses) in (I)
obtaining possession of the Premises, (2) removing and storing Tenant's or any
other occupant's property after the 15-day period specified in Section 19.(c)
expires, (3) repairing, restoring, or otherwise putting the Premises into
condition required under Section 16.(a), (4) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (excluding brokerage commissions, cost of tenant finish work,
allowances, and other expenses customarily amortized in base rent), (5)
performing Tenant's obligations which Tenant failed to perform, (6) if this
Lease is terminated, the product obtained by multiplying the aggregate brokerage
commissions incurred by Landlord in connection with this Lease by a fraction
whose numerator is the number of calendar months (including partial calendar
months) during the period beginning with the termination date and ending on the
scheduled expiration date of the initial Term applicable to such space (or, if a
renewal Term is in effect, the scheduled expiration date of the renewal Term
applicable to such space) and whose denominator is the number of calendar months
in the initial Term or, if a renewal Term is in effect, the number of months in
the renewal Term (however, if the calculation is being made for a renewal Term,
then only those costs incurred in respect of the renewal Term will be included),
and (7) enforcing, or advising Landlord of, its rights, remedies, and recourses.
Landlord's acceptance of rent following an Event of Default shall not waive
Landlord's rights regarding such Event of Default. Landlord's receipt of rent
with knowledge of any default by Tenant hereunder shall not be a waiver of such
default, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless set forth in writing and signed by Landlord. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive

                                       9
<PAGE>

Landlord's rights regarding any future violation of such term or violation of
any other term. If Landlord repossesses the Premises pursuant to the
authority herein granted, then Landlord shall have the right to (A) keep in
place and (except for Tenant's equipment) use or (B) (subject to Section
19.(c)) remove and store, at Tenant's expense, all of the furniture,
fixtures, equipment and other property in the Premises, including that which
is owned by or leased to Tenant at all times before any foreclosure thereon
or repossession thereof by any lessor thereof or third party having a lien
thereon. After the 15-:lay period specified in Section 19.(c) expires,
Landlord may relinquish possession of all or any portion of such furniture,
fixtures, equipment and other property to any person (a "CLAIMANT") who
presents to Landlord a copy of any instrument represented by Claimant to have
been executed by Tenant (or any predecessor of Tenant) granting Claimant the
right under various circumstances to take possession of such furniture,
fixtures, equipment or other property, without the necessity on the part of
Landlord to inquire into tic authenticity or legality of the instrument.
Landlord may, at its option and without prejudice to or waiver of any rights
it may have, (I) require that its representatives escort Tenant to the
Premises to retrieve any personal belongings of Tenant and/or its employees
or (ii) obtain a list from Tenant of the personal property of Tenant and/or
its employees, and make such property available to Tenant and/or Tenant's
employees; however, Tenant first shall pay in cash all costs and estimated
expenses to be incurred in connection with the removal of such property and
making it available. The rights of Landlord herein stated are in addition to
any and all other rights that Landlord has or may hereafter have at law or in
equity, and Tenant agrees that the rights herein granted Landlord are
commercially reasonable.

          (c)  Notwithstanding anything contained in this Lease to the contrary,
in recognition of the enormous intrinsic value of, and value in connection with
Tenant's business of, Tenant's equipment at the Premises, Tenant at all times
will have access to the Premises for the purpose of servicing, having access to,
or removing such equipment until such time as such equipment is removed in
accordance with this Section 19.(c) or the third to last sentence of Section
19.(b). For a period of 15 days following the expiration or termination of this
Lease, Landlord cannot disturb or move any of Tenant's equipment under any
circumstances, even if Landlord has terminated Tenant's right to possess the
Premises or terminated this Lease; after such 15-day period, all items not so
removed shall, at the option of Landlord, be deemed abandoned by Tenant and may
be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items,
and Tenant shall pay for the cost incurred by Landlord in connection therewith.

          20.  LANDLORD'S LIABILITY. Liability of Landlord to Tenant for any
default by Landlord, shall be limited to actual, direct, but not consequential,
damages therefor and shall be recoverable only from the interest of Landlord in
the Building and the Land, any insurance or condemnation proceeds, and rent
derived from the Building and the Land, and neither Landlord nor Landlord's
owners shall have any personal liability therefor.

          21.  MORTGAGES. This Lease shall be subordinate to any deed of trust,
mortgage, or other security instrument (a "MORTGAGE"), or any ground lease,
master lease, or primary lease (a "PRIMARY LEASE"), that now or hereafter covers
all or any part of the Premises (the mortgagee under any Mortgage or the lessor
under any Primary Lease is referred to herein as "LANDLORD'S MORTGAGE").
However, as a condition to such subordination, the Landlord's Mortgagee must
execute, acknowledge, and deliver to Tenant a subordination, non-disturbance,
and attornment agreement in the same form as EXHIBIT E hereto (which may have
non-substantive changes thereto to reflect changes in factual matters) or, at
Landlord's option, another form whose form and substance are acceptable to
Tenant (an "SNDA"), Tenant shall execute, acknowledge, and deliver an SNDA
within ten days after Landlord's request therefor. Notwithstanding the
subordination provided herein, any Landlord's Mortgagee may subordinate its
Mortgage or Primary Lease (as the case may be) to this Lease. Tenant shall
execute such documentation as the Landlord's Mortgagee may reasonably request
evidencing the subordination of this Lease to such Landlord's Mortgagee's
Mortgage or Primary Lease or, if the Landlord's Mortgagee so elects, the
subordination of such Landlord's Mortgagee's Mortgage or Primary Lease to this
Lease. If at the closing of Landlord's acquisition of the Premises ("CLOSING"),
an SNDA has not deposited into escrow, whose delivery is subject only to the
consummation of the Closing, then either Landlord or Tenant may terminate this
Lease before Closing occurs. Landlord represents and warrants that after giving
effect to Closing, the only Mortgage on the Premises will be held by Principal
Commercial Advisors, Inc. and there will be no Primary Lease affecting the
Premises.

          22.  ENCUMBRANCES. Tenant has no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind Landlord's property or the interest of Landlord or
Tenant in the Premises or to charge the rent for any claim in favor of any
person dealing with Tenant, including those who may furnish materials or perform
labor for any construction or repairs. Tenant shall pay or cause to be paid all
sums due for any labor performed or materials furnished in connection with any
work performed on the Premises by or at the request of Tenant. Tenant shall give
Landlord immediate written notice of the placing of any lien or encumbrance
against the Premises.

     23.  MISCELLANEOUS.

          (a)  Words of any gender used in this Lease shall include any other
gender, and words in the singular shall include the plural, unless the context
otherwise requires. The captions inserted in this Lease are for convenience only
and in no way affect the interpretation of this Lease. The following terms shall
have the following meanings: "LAWS" shall mean all federal, state, and local
laws, rules, and regulations; all court orders, governmental directives, and
governmental orders; and all restrictive covenants affecting the Property, and
"LAW" shall mean any of the foregoing; "AFFIANTS" shall mean any person or
entity which, directly or indirectly, controls, is controlled by, or is under
common control with the party in question; "TENANT PARTY" shall include Tenant,
any assignees claiming by, through, or under Tenant, any subtenants claiming by,
through, or under Tenant, and any of their respective agents, contractors,
employees, and invitees; and "INCLUDING" means including without limitation.

          (b)  Landlord may transfer and assign, in whole or in part, its rights
and obligations in the Premises, in which case Landlord shall have no further
liability hereunder, except to account for the Security Deposit

                                       10
<PAGE>

if it is not transferred to the transferee or assignee. Each party shall
furnish to the other, promptly upon demand, a corporate resolution, proof of
due authorization by partners, or other appropriate documentation evidencing
the due authorization of such party to enter into this Lease.

          (c)  Except for Tenant's monetary obligations and Landlord's and
Tenant's obligations to maintain insurance, whenever a period of time is herein
prescribed for action to be taken by Landlord or Tenant, neither Landlord nor
Tenant shall be liable or responsible for, and there shall be excluded from the
computation for any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, governmental laws, regulations, or
restrictions, or any other causes of any kind whatsoever, which are beyond the
control or anticipation of Landlord or Tenant.

          (d)  Tenant shall, from time to time, within ten days after request of
Landlord, deliver to Landlord, or Landlord's designee, a certificate of
occupancy for the Premises, financial statements for itself and an estoppel
certificate stating that this Lease is in full effect, the date to which rent
has been paid, the unexpired Term and such other factual matters pertaining to
this Lease as may be reasonably requested by Landlord.

          (e)  This Lease constitutes the entire agreement of the Landlord and
Tenant with respect to the subject matter of this Lease, and contains all of the
covenants and agreements of Landlord and Tenant with respect thereto. Landlord
and Tenant each acknowledge that no representations, inducements, promises or
agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations not expressly set
forth in this Lease are of no effect This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto.

          (f)  All obligations of Tenant hereunder not fully performed by the
end of the Tenn shall survive, including, without limitation, all payment
obligations with respect to Taxes and insurance and all obligations concerning
the condition and repair of the Premises.

          (g)  If any provision of this Lease is illegal, invalid or
unenforceable, then the remainder of this Lease shall not be affected thereby,
and in lieu of each such provision, there shall be added, as a part of this
Lease, a provision as similar in terms to such illegal, invalid or unenforceable
clause or provision as may be possible and be legal, valid and enforceable.

          (h)  All references in this Lease to "the date hereof' or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this Lease.

          (i)  Landlord and Tenant each warrant to the other that it has not
dealt with any broker or agent in connection with this Lease other than Peterson
Realty Group ("PETERSON"), whose commission shall be paid by Landlord in
accordance with that Commission Agreement-Lease dated June 12, 1997. Tenant and
Landlord shall each indemnify the other against all costs, attorneys' fees, and
other liabilities for commissions or other compensation claimed by any broker or
agent, other than Peterson, claiming the same by, through, or under the
indemnifying party.

          (j)  If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying an individual at a specific address within the continental United
States for the receipt of notices and payments to Tenant All parties included
within the terms "Landlord" and "Tenant," respectively, shall be bound by
notices given in accordance with the provisions of Section 24 to the same effect
as if each had received such notice.

          (k)  The terms and conditions of this Lease are confidential and
Tenant shall not disclose the terms of this Lease to any third party except as
may be required by law or to enforce its rights hereunder, provided however,
that, after Closing, Tenant may record a memorandum of this Lease, in form of
EXHIBIT F hereto, in the Real Property Records of Dallas County, Texas.

          (l)  Tenant shall pay interest on all past-due rent from the date due
until paid at the maximum lawful rate. In no event, however, shall the charges
permitted under this Section 23.(l) or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of interest.

     24.  NOTICES.  Each provision of this instrument or of any applicable Laws
and other requirements with reference to the sending, mailing or delivering of
notice or the making of any payment hereunder shall be deemed to be complied
with when and if the following steps are taken:

          (a)  All rent shall be payable to Landlord at the address for Landlord
set forth below or at such other address as Landlord may specify from time to
time by written notice delivered in accordance herewith. Tenant's obligation to
pay rent shall not be deemed satisfied until such rent has been actually
received by Landlord.

          (b)  All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address set forth below, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith.

          (c)  Any written notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered upon the earlier to occur of
(1) tender of delivery (in the ease of a hand-delivered notice), or (2) three
days after being deposited in the United States Mail, postage prepaid, Certified
Mail, in each case, addressed to the parties hereto at the respective addresses
set out below, or at such other address as they have theretofore specified by
written notice delivered in accordance herewith. If Landlord has attempted to
deliver notice to Tenant at Tenant's

                                       11
<PAGE>

address reflected on Landlord's books but such notice was returned or
acceptance thereof was refused, then Landlord may post such notice in or on
the Premises, which notice shall be deemed delivered to Tenant upon the
posting thereof

     25.  HAZARDOUS WASTE. The term "HAZARDOUS SUBSTANCES," as used in this
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the removal of which is required or the use of which is
restricted, prohibited or penalized by any "ENVIRONMENTAL LAW," which term shall
mean any Law relating to health, pollution or protection of the environment.
Tenant hereby agrees that (a) no activity will be conducted on the Premises that
will produce any Hazardous Substances, except for such activities that are part
of the ordinary course of Tenant's business activities (the "PERMITTED
ACTIVITIES") provided such Permitted Activities are conducted in accordance with
all Environmental Laws; (b) the Premises will not be used in any manner for the
storage of any Hazardous Substances except for any temporary storage of such
materials that are used in the ordinary course of Tenant's business (the
"PERMITTED MATERIALS") provided such Permitted Materials are properly stored in
a manner and location satisfying all Environmental Laws; (c) no portion of the
Premises will be used as a landfill or a dump; (d) Tenant will not install any
underground tanks of any type; and (e) no Tenant Party will bring or knowingly
permit any Hazardous Substances to be brought onto the Premises, except for the
Permitted Materials, and if so brought thereon, the same shall be immediately
removed by Tenant, with proper disposal, and all required cleanup procedures
shall be diligently undertaken pursuant to all Environmental Laws.  If at any
time during or after the Term, the Premises are found to be so contaminated or
subject to any such condition that were not shown to be present in inspections
conducted at or before Closing, Tenant shall defend, indemnify and hold Landlord
harmless from all claims, demands, actions, liabilities, costs, expenses,
damages and obligations of any nature arising from or as a result of the use of
the Premises by Tenant. Tenant will maintain on the Premises a list of all
materials stored at the Premises for which a materials safety data sheet (an
"MSDS") was issued by the producers or manufacturers thereof, together with
copies of the MSDS for such materials, and shall deliver such list and MSDS
copies to Landlord upon Landlord's request therefor. Tenant shall remove all
Permitted Materials from the Premises in a manner acceptable to Landlord before
Tenant's right to possess the Premises is terminated. If Landlord determines in
good faith that it is likely that there are environmental problems at the
Premises, Landlord must notify Tenant of such fact and arrange with Tenant for a
time at which Landlord may enter the Premises and conduct environmental
inspections and tests therein as it may require from time to time, provided that
Landlord shall use reasonable efforts to minimize, to the extent reasonably
possible, the interference with Tenant's business. Such inspections and tests
shall be conducted at Landlord's expense, unless they reveal (1) the presence of
Hazardous Substances (other than Permitted Materials) which were not shown to be
present in inspections conducted at the time of Closing or (2) Tenant or any
other Tenant Party has not complied with the requirements set forth in this
Section 25, in which case Tenant shall reimburse Landlord for tie reasonable
cost thereof within ten days after Landlord's request there for.

     26.  WAIVER OF LANDLORD'S LIEN. Any fixtures, signs, equipment (including,
without limitation, Tenant's mainframe computer), and other personal property of
Tenant affixed to or located in the Premises remain the property of Tenant, and
Landlord waives and acknowledges that it has no liens, whether constitutional,
statutory or consensual, upon any of Tenant's fixtures, signs, equipment or
other personal property. Landlord agrees that Tenant has the right to remove at
any time any and all of its trade fixtures, equipment, signs, and other personal
property which it may have stored or installed in the Premises. Landlord hereby
covenants and agrees that before removing any fixtures, equipment, signs, or
other personal property from the Premises, it will give any lender of whom
Tenant has given Landlord notice 30 days notice and opportunity to remove such
items, provided such lender agrees to pay rent for the Premises until such time
as such items are removed.

     27.  ADDITIONAL PARKING AREA. Tenant may construct an additional parking
lot on the Land, subject to the following requirements:

          (a)  the parking lot must be located within the area shown on EXHIBIT
H; and

          (b)  the parking lot must be constructed (1) using similar materials
and in a similar manner to the existing parking lot on the Land, (2) in
accordance with all applicable Law, and (3) in a good and workmanlike manner;

Once constructed, the parking lot will be considered part of the Premises and
subject to all of Tenant's obligations concerning the Premises, including,
without limitation, the terms of Section 5.(a).

     28.  TENANT IMPROVEMENT FINANCING. Landlord shall use reasonable efforts to
assist Tenant in finding lenders for the financing of up to $1,500,000 for
Tenant's initial improvements to the Premises and for equipment Tenant's
inability to obtain such financing, however, shall not affect Tenant's
obligations under this Lease.

     29.  EXISTING EQUIPMENT. If Tenant installs the Backup Equipment, then
Tenant shall store in the Building the existing generator, UPS system, and
related equipment and deliver them to Landlord in their present condition at the
end of the Term or, if earlier, the termination of Tenant's right to possess the
Premises.

     TENANT ACKNOWLEDGES THAT (1) IT HAS INSPECTED AND ACCEPTS THE PREMISES IN
AN "AS IS, WHERE IS" CONDITION, (2) LANDLORD HAS MADE NO WARRANTY,
REPRESENTATION, COVENANT, OR AGREEMENT WITH RESPECT TO THE MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OF THE PREMISES, (3) THE PREMISES ARE IN GOOD
AND SATISFACTORY CONDITION, (4) NO REPRESENTATIONS AS TO THE REPAIR OF THE
PREMISES, NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE PREMISES HAVE BEEN MADE
BY LANDLORD, AND (5) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED,
IMPLIED OR STATUTORY, THAT EXTEND BEYOND THE DESCRIPTION OF THE PREMISES.

                                       12
<PAGE>

     Executed by Tenant on July 16, 1997.

TENANT:                  ADS ALLIANCE DATA SYSTEMS, INC.

                         By:    James E. Andersen
                            --------------------------------
                         Name:  James E. Andersen
                              ------------------------------
                         Title:  Executive Vice President
                               -----------------------------
                         Address:  5001 Spring Valley Road
                                   West Tower, Suite 650
                                   Dallas, Texas 75244
                         Telephone:     972-960-5100
                         Fax:           972-960-5162

     with a copy to:     Carolyn Melvin
                         ADS Alliance Data Systems, Inc.
                         4590 East Broad Street
                         Columbus, Ohio 43213
                         Telephone:     614-755-5000
                         Fax:           614-863-5965

     Executed by Landlord on July 16, 1997.

LANDLORD:                WATERVIEW PARKWAY, L.P.
                         By:  1996 DFW Office, Inc., its general partner

                         By:    [illegible]
                            --------------------------------------
                         Name:  [illegible]
                              ------------------------------------
                         Title:  Executive Vice President
                               -----------------------------------
                         Address:  2200 Ross Avenue, Suite 3700
                                   Dallas, Texas 75201
                         Telephone:     (214) 979-6300
                         Fax:           (214) 979-6326

     with a copy to:     Greg L. Arrell
                         Vinson & Elkins L.L.P.
                         2001 Ross Avenue, Suite 3700
                         Dallas, Texas  75201
                         Telephone:     (214) 220-7798
                         Fax:           (214) 999-7798

<PAGE>

                                    EXHIBIT A

     BEING a 410,021 square feet (9.4128 acres) tract of land situated in the
John Clay Survey, Abstract No. 313, Dallas County, Texas, L50 being all of Lot
1, Block A/8735, Dresser Addition, an addition to the City of Dallas according
to the plat thereof recorded in Volume 81203, Page 0275, Deed Records, Dallas
County, Texas, and being more particularly described as follows:

     BEGINNING at a 5/8" iron rod set for corner in the west line of Waterview
Road (80' public R.O.W.) at the northeast corner of U.T.D. Synergy Park Phase
II, as recorded by plat in Volume 86051, Page 3744, Deed Records, Dallas County,
Texas.

     THENCE WEST departing the said west line of Waterview Road, a distance of
569.26 feet to a 5/8" iron rod set for corner in the east line of that certain
tract of land conveyed to Texas A&M University in Volume 72221, Page 2873, Deed
Records, Dallas County, Texas, at the northwest corner of said U.T.D. Synergy
Park Phase II;

     THENCE N00  12' 12'W along the west line of said Texas A&M University
tract, a distance of 610.00 feet to a 1/2" iron rod found for corner at the
southwest corner of U.T.D. Synergy Park Phase I, as recorded by plat in Volume
85245, Page 4873, Deed Records, Dallas County, Texas.

     THENCE EAST departing the east line of said Texas A&M University tract and
along the south line of said U.T.D. Synergy Park Phase I, a distance of 700.00
feet to a 3/8" iron rod found for corner in the aforementioned west line of
Waterview Road;

     THENCE along the said west line of Waterview Road the following:

     500 12'12'E a distance of 223.02 feet to a 5/8" iron rod set for corner at
     the beginning of a curve to the right which has a central angle of 30  12'
     12', a radio of 600.00 feet, and a chord which bears S14 53'54'W - 312.64
     feet;

     Along said curve to the right, an arc distance of 316.29 feet to a 5/8"
     iron rod set for corner at the end of said curve;

     S30 00'00"W a distance of 97.96 feet to the POINT OF BEGINNING and
     containing 410,021 square feet or 9.4128 acres of land.

<PAGE>

                                    EXHIBIT B

                                 EXPANSION OPTION

     1.   EXERCISE OF OPTION. Provided that (a) no Event of Default then exists,
(b) there has been no material adverse change in Tenant's financial condition,
comparing the time the Lease is executed and the time that Tenant exercises the
expansion option, and (c) Tenant is not in default under its covenants with its
then-current lenders, if any (which defaults have not been waived in writing by
such lenders), Tenant may elect to expand the Building once by up to 35,000
square feet (but not less than 15,000 square feet) by delivering to Landlord
written notice thereof not later than 12 months before the end of the Term (the
"EXPANSION NOTICE"), specifying the expansion area's size and location on the
Land, which location may be in one or both of the areas shown on EXHIBIT H (the
"EXPANSION SPACE").

     2.   PRELIMINARY APPROVAL. Within 30 days after Tenant delivers the
Expansion Notice to Landlord, Landlord shall prepare and submit to Tenant for
its review (a) preliminary plans and outline specifications (the "EXPANSION
DISCUSSION DOCUMENTS") for Landlord and Tenant's preliminary conception of the
construction of the shell and interior of the Expansion Space (the "EXPANSION
DISCUSSION WORK"), (b) preliminary cost estimates for performing the Expansion
Discussion Work, (c) preliminary rents for the Expansion Space (based upon the
formula outlined in Paragraph 5 below), and (d) a preliminary construction
schedule, showing the anticipated dates of various phases of the construction
(including the dates of substantial completion and full completion). Tenant must
notify Landlord whether it approves of the submitted Expansion Discussion
Documents, the preliminary cost estimates, the preliminary rents, and the
preliminary construction schedule within 14 days after Landlord delivers them to
Tenant If Tenant disapproves of such Expansion Discussion Documents, preliminary
cost estimates, preliminary rents, or preliminary construction schedule. Then
Tenant must notify Landlord of that fact, specifying in detail the reasons for
such disapproval. In such event, Landlord shall amend the submitted Expansion
Discussion Documents (to the extent it approves such amendments), and, if
required by such amendments to the Expansion Discussion Documents, amend the
preliminary cost estimates, preliminary rents, or preliminary construction
schedule, as the case may be, and deliver them to Tenant for its review within
ten days after receiving Tenant's notice disapproving the submitted Expansion
Discussion Documents, preliminary cost estimates, preliminary rents, or
preliminary construction schedule. Landlord and Tenant must repeat this process
(using the same time periods) until both of them have approved the Expansion
Discussion Documents, the preliminary cost estimates, the preliminary rents, and
the preliminary construction schedule. At any time until the Expansion
Discussion Documents, the preliminary cost estimates, the preliminary rents, and
the preliminary construction schedule have been approved by Landlord and Tenant,
Tenant may rescind its election to expand by written notice to Landlord. If such
election is rescinded as provided in this paragraph, Tenant shall pay to
Landlord all reasonable costs incurred by Landlord prior to the date of such
rescission and an administrative fee of $3,000.00 to cover Landlord's overhead
cost in connection therewith.

     3.   FINAL APPROVAL. Within 30 days after Tenant and Landlord have approved
the Expansion Discussion Documents, the preliminary cost estimates, the
preliminary rents, and the preliminary construction schedule, Landlord shall
prepare and deliver to Tenant detailed plans and specifications for the
Expansion Space (the "PRELIMINARY EXPANSION PLANS AND SPECIFICATION"), which
must be based upon the approved Expansion Discussion Documents (including,
without limitation, working drawings, construction drawings, and electrical,
plumbing and mechanical drawings), estimated cost estimates, estimated rents,
and estimated construction schedule. Tenant may only object to those matters
shown on the Preliminary Expansion Plans and Specifications which are
inconsistent with or are additions to the approved Expansion Discussion
Documents. Tenant must deliver notice of its objections to Landlord within 14
days after Landlord delivers such items to Tenant and Landlord must respond
within ten days after Tenant delivers such notice to Landlord. Landlord and
Tenant must repeat this process (using the same time periods) until both of them
have approved the Preliminary Expansion Plans and Specifications. The
Preliminary Expansion Plans and Specifications, as finally approved, are
referred to in this Agreement as the "EXPANSION PLANS AND SPECIFICATIONS" and
the work shown on such Expansion Plans and Specifications is referred to as the
"EXPANSION WORK." After the final Expansion Plans and Specifications have been
approved by Landlord and Tenant, Landlord shall enter into a guaranteed maximum
price construction contract or, at Tenant's option, another form of contract
with a general contractor for the performance of the Expansion Work. Before
entering into such contract, however, Landlord and Tenant must consent to the
terms thereof At any time before the Expansion Plans and Specifications and the
general contract have been approved, Tenant may rescind its expansion election.
If Tenant rescinds such election and the final cost estimates or final rents
exceed the approved preliminary cost estimates or approved preliminary rents,
respectively, by more than 15% or the final construction schedule provides for a
substantial completion date that is more than two months later than the
substantial completion date set forth in the approved preliminary construction
schedule, then Tenant must pay to Landlord all reasonable costs incurred by
Landlord before such rescission and an administrative fee of $3,000 to cover
Landlord's overhead costs in connection therewith. If Tenant rescinds such
election under any circumstances other than those set forth in the immediately
preceding sentence, then Tenant shall pay to Landlord all reasonable cost
incurred by Landlord before such rescission and-an administrative charge of
$15,000 to cover Landlord's overhead cost in connection therewith.

     4.   EXPANSION AMENDMENT. Contemporaneously with the execution of the
general contract, Tenant and Landlord must execute an amendment to the Lease (an
"EXPANSION AMENDMENT") which will (a) extend the term of this Lease until ten
years after substantial completion of the Expansion Space Work (the "EXPANSION
AMENDMENT LEASE TERM") (the period beginning with the day after the expiration
date of the initial ten-year Term (or, if the expansion option is exercised
during a renewal Term, the expiration date of the renewal Term) and ending on
the expiration date of the Expansion Amendment Lease Term is herein called the
"EXPANSION EXTENSION"), (b) provide that the Base Rent (1) for the Expansion
Space equals the Base Rent calculated as provided below in Paragraph 5, and (2)
for the existing Premises, (A) during the original ten-year Term or (if the
expansion option is exercised during a renewal Term) the renewal Term (i.e.,
before giving effect to the Expansion), the monthly Base Rent due for such space
under the terms of this Lease, and (B) for the first five-year period of the
Expansion Extension (or part thereof), the monthly Base Rent

                                      B-1
<PAGE>

shall be 115% of the monthly Base Rent in effect for the initial Premises
during the last month of the initial ten.year Term, and for the next
five-year period of the Expansion Extension (or part thereof) the monthly
Base Rent shall be 115% of the monthly Base Rent in effect for the initial
Premises during the initial five years of the Expansion Extension, and (c)
provide for a construction exhibit requiring Landlord to perform the
Expansion Work in a good and workmanlike manner and in accordance with all
Laws.

     5.   CALCULATION OF EXPANSION SPACE BASE RENT. The annual Base Rent for
the Expansion Space will be determined as follows: (a) in the case of the
first five years of Expansion Space Lease Term, an amount equal to (1) the
Total Expansion Costs (defined below), times (2) the sum of (A) a mortgage
constant rate equal to the Ten-Year Mortgage Money Rate (defined below) at
the time in question and (B) 300 basis points or (if Tenant's unsecured debt
rating at the time of such election is A or better as established by Standard
& Poor's Corporation) 250 basis points; and (b) in the case of the final five
years of the Expansion Amendment Lease Term, 115% of the annual Base Rent
rate for the initial five years of the Expansion Amendment Lease Term. For
example, if the Ten-Year Mortgage Money Rate were 8.0%, the add on factor is
300 basis points (so that 8% + 3% = 11%), and the Total Expansion Cost for
the Expansion Space in question were $3,000,000, then the annual Base Rent
for such Expansion Space during the first five years of the Expansion
Amendment Lease Term for such Expansion Space would be $330,000 (calculated
as follows: $3,000,000 X .11 = $330,000), and $379,500 for the final five
years of the Expansion Space Lease Term.

     "TOTAL EXPANSION COSTS" means all soft and hard costs incurred in
     connection with the design and construction of the improvements for the
     Expansion Space in question, including, without limitation, all
     architecture, engineering, contractors, market leasing commissions,
     development fees (not to exceed 4% of total construction costs), brokerage
     and legal fees and expense, any interest expense, tax and insurance
     payments incurred during such construction process, and any loan or
     mortgage fees, and any other costs, fees or expenses incurred with the
     construction of the Expansion Space.

     "TEN-YEAR MORTGAGE MONEY RATE" means the mortgage constant (i.e., the
     amount of annual debt service, expressed as a percentage of the loan
     amount, that is necessary to pay interest and the entire principal over the
     amortization period) at the time such determination is being made
     associated with mortgage loans made available by the following
     institutional lenders for permanent loans for properties similar to the
     Premises which are leased to tenants having a credit rating similar to
     Tenant's credit rating at the time in question, with an amortization
     schedule of 25 years and a maturity date often years: Metropolitan Life
     Insurance Company; Prudential Life Insurance Company; and The Principal
     Financial Group. If however, any of such institutional lenders are not
     providing permanent financing for properties similar to the Premises, then
     Landlord may substitute another institutional lender therefor.

     6.   TERMINATION OF EXPANSION SPACE. If the Expansion Work is not
substantially completed such that Tenant may use the Expansion Space for its
intended purpose within nine months after the date set forth for substantial
completion in the development schedule approved by Landlord and Tenant, plus the
number of days of delay caused by force majeure events and the number of days of
delay caused by the actions of Tenant Parties (the "TERMINATION DATE"), then
Tenant may terminate this Lease by delivering written notice thereof to Landlord
before the earlier of (a) ten days after the Termination Date or (b) the date
the Expansion Space is substantially completed. Should Landlord desire to extend
the period of time for performance for delays caused by Tenant Parties or force
majeure, then it must, within ten days after discovery of the cause for such
delay, deliver written notice to Tenant specifying the cause of such delay and
the anticipated duration of such delay. Landlord's failure to deliver such
notice will be deemed a waiver of the right to extend such time period for such
reason. If Landlord fails to provide the Expansion Discussion Documents, the
Preliminary Expansion Plans and Specifications, or requested modifications
thereof as provided in Paragraphs 2 and 3 of this Exhibit and such failure
continues for a period of 15 days after Tenant has delivered to Landlord written
notice thereof, then Tenant may cause the preparation of such plans,
specifications, and modifications and deduct the cost thereof from its
obligation to pay Base Rent under this Lease (in which case, such costs shall be
deemed to have been paid by Landlord to the extent Tenant deducts such amount
from Base Rent).

     7.   COMPLIANCE WITH LAWS: CONSTRUCTION FINANCING. Landlord's obligations
to construct any of the Expansion Space provided in this Exhibit shall be
subject to (a) all then applicable Laws and (b) Landlord's obtaining financing
acceptable to Landlord for the construction of the Expansion Space at
commercially reasonable rates. Accordingly, if any Law would prohibit
construction of the Expansion Space or if Landlord cannot obtain such financing,
then Landlord shall have no obligation to construct the Expansion Space.
Landlord shall use commercially reasonable and diligent efforts to obtain
approval of the proposed expansion under applicable Law and to obtain such
financing. If Landlord is unable to obtain such financing within 45 days after
the Expansion Plans and Specifications have been finally approved, Landlord
shall promptly notify Tenant thereof and Tenant's election to expand the
Premises shall terminate, in which case, Tenant shall pay to Landlord all
reasonable costs incurred by Landlord before such termination, but shall not be
obligated to pay to Landlord any administrative charge for overhead costs in
connection therewith.

     8.   LANDLORD'S APPROVAL. Landlord's approval of the matters described
under this Exhibit shall not be unreasonably withheld. If Landlord disapproves
any matter, it must notify Tenant in reasonable detail of the reasons for such
disapproval.

                                       B-2
<PAGE>

                                      EXHIBIT C

                                  EXTENSION OPTIONS

     Provided no Event of Default exists and Tenant is, or Tenant and Tenant's
subtenants are, occupying the entire Premises at the time of such election,
Tenant may renew this Lease for two additional periods of five years each on the
same terms provided in this Lease (except as set forth below), by delivering
written notice of the exercise thereof to Landlord not sooner than 14 months,
nor later than II months, before the expiration of the Term. On or before the
commencement date of the extended Term in question, Landlord and Tenant shall
execute an amendment to this Lease extending the Term on the same terms provided
in this Lease, except as follows:

     (a)  The Base Rent payable for each month during each such extended Term
     shall be the prevailing rental rate for renewal of existing leases in the
     vicinity of the Premises, at the commencement of such extended Term, for
     space of equivalent quality, size, utility and location, with the length of
     the extended Term and the credit standing of Tenant to be taken into
     account (the "MARKET RENT"). Within ten days after Tenant delivers notice
     of the exercise of such renewal option, Landlord must deliver to Tenant a
     statement setting forth the rent Landlord believes constitutes Market Rent.
     Within ten days after the date upon which Landlord delivers such notice,
     Tenant must either (1) accept such Market Rent, or (2) deliver to Landlord
     a statement setting forth the rent Tenant believes constitutes Market Rent.
     If Tenant delivers an alternate statement to Landlord, then Tenant and
     Landlord shall attempt to agree upon Market Rent within 30 days. If, at the
     end of such 30-:lay period, Tenant and Landlord have been unable to agree
     upon a Market Rent figure, then Landlord and Tenant must, within ten days
     after such 30-day period, each appoint an outside consultant (who must be
     either a broker or a real estate appraiser and who must be familiar with
     the market for buildings such as the Premises and active in the market for
     at least ten years) and the outside consultants must consult together for
     at least ten days to determine the Market Rent If the outside consultants
     reach an agreement, then the Market Rent upon which they agree will be
     binding upon all parties. If they are unable to reach an agreement, then
     each of them must prepare its own statement of Market Rent, must appoint a
     third consultant (who must meet the requirements set forth above), and
     deliver their statements to such third consult, all within ten days after
     the expiration of the ten-day consulting period. The third consultant must
     prepare its report within 20 days after being appointed and the statement
     of the third consultant will be binding upon all parties. Landlord and
     Tenant will each pay for the cost of its own consultant. If it is necessary
     to appoint the third consultant, then Landlord and Tenant will divide the
     cost of such consultant equally. If either party fails to appoint a
     consultant within the time period set forth above, then such panty will be
     deemed to have appointed the consultant of the other party. If either
     party's consultant fails to meet or issue a report within the time period
     specified, then such party's consultant will be deemed to have agreed with
     the findings of the other party's consultant At such time as the Market
     Rate is finally determined, Tenant will be entitled to rescind its exercise
     of such option by written notice to Landlord, which notice must be
     delivered within 30 days after the date upon which the Market Rate is
     finally determined.

          (b)  Tenant shall have no further renewal options unless expressly
     granted by Landlord in writing.

          (c)  Landlord shall lease to Tenant the Premises in their then-current
     condition, and Landlord shall not provide to Tenant any allowances (e.g.,
     moving allowance, construction allowance, and the like) or other tenant
     inducements.

     Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises without
Landlord's written consent, or (3) Tenant fails to timely exercise its option
under this Exhibit, time being of the essence with respect to Tenant's exercise
thereof.

                                      C-1
<PAGE>

                                   EXHIBIT D

                            [Intentionally omitted]

                                      D-1
<PAGE>

Record and return to:

Mark M. Sloan
Thompson & Knight, P.C.
1700 Pacific Ave., Suite 3300
Dallas, Texas 75201

                            SUBORDINATION, NON-DISTURBANCE
                               AND ATTORNMENT AGREEMENT

     THIS AGREEMENT, made and entered into as of the ____ day of July, 1997, by
and between PRINCIPAL COMMERCIAL ADVISORS, INC., an Iowa corporation, with its
principal office at 11050 Roe Avenue, Suite 200, Overland Park Kansas 66211
(hereinafter called "Mortgagee"), WATERVIEW PARKWAY, L.P., a Texas limited
partnership, with its principal office at 2200 Ross Avenue, 3700 Texas Commerce
Tower, Dallas, Texas 75201 (hereinafter called "Lessor") and ADS ALLIANCE DATA
SYSTEMS, INC., a Delaware corporation, having its principal office at 4590 E.
Broad Street, Columbus, Ohio 43213 (hereinafter called "Lessee");

                                 W I T N E S S E T H:

     WHEREAS, Lessee has by a written lease dated July __, 1997 (hereinafter
called the "Lease") leased from Lessor all or part of certain real estate and
improvements thereon located in the City of Dallas, Texas, as more
particularly described in EXHIBIT A attached hereto (the "Demised Premises");
and

     WHEREAS, Lessor is encumbering the Demised Premises as security for a loan
(the "Loan") from Mortgagee to Lessor (the "Mortgage"); and

     WHEREAS, Lessee, Lessor and Mortgagee have agreed to the following with
respect to their mutual rights and obligations pursuant to the Lease and the
Mortgage;

     NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) paid by
each party to the other and the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto do hereby covenant and agree as follows:

     1.   Lessee's interest in the Lease and all rights of Lessee thereunder,
including any purchase option, if any, shall be and are hereby declared subject
and subordinate to the Mortgage upon the Demised Premises and its terms, and the
term "Mortgage" as used herein shall also include any amendment, supplement,
modification or renewal thereof. Notwithstanding the foregoing, Mortgagee shall
allow insurance proceeds and condemnation

                                  -1-

<PAGE>

awards to be used to rebuild, restore and/or repair the Demised Premises in
accordance with (he terms and conditions of the Lease, provided that (I)
Lessee is not then in default under the Lease (after the expiration of any
applicable grace or cure period) and (ii) neither Lessor nor Lessee have the
right to terminate the Lease on account of such casualty or condemnation or,
in the event either Lessor or Lessee have the right to terminate the Lease on
account of such casualty or condemnation, then such party shall have waived
such right with respect to such casualty or condemnation.

     2.   In the event of any foreclosure of the Mortgage or any conveyance in
lieu of foreclosure, provided that the Lessee shall not then be in default
beyond any grace or cure period under the Lease and that the Lease shall then be
in full force and effect, then Mortgagee shall neither terminate the Lease nor
join Lessee in foreclosure proceedings, nor disturb Lessee's possession, and the
Lease shall continue in full force and effect as a direct lease between Lessee
and Mortgagee.

     3.   After the receipt by Lessee of notice from Mortgagee of any
foreclosure of the Mortgage or any conveyance of the Demised Premises in lieu of
foreclosure, Lessee will thereafter attorn to and recognize Mortgagee or any
purchaser from Mortgagee at any foreclosure sale or otherwise as its substitute
lessor on the terms and conditions set forth in the Lease.

     4.   Lessee shall not prepay any of the rents under the Lease more than one
month in advance except with the prior written consent of Mortgagee.

     5.   In the event Mortgagee shall become the owner of the Demised Premises
as a result of a foreclosure sale or other transfer, Mortgagee shall not be
liable for damage for any act or omission of the Lessor (although Mortgagee will
be obligated to perform all of Lessor's obligations under the Lease even if the
need for an obligation arose before the effective date of the foreclosure or
other transfer), nor shall Mortgagee be subject to any offsets or deficiencies
which Lessee may be entitled to assert against the Lessor as a result of any act
or omission of Lessor occurring prior to Mortgagee's obtaining possession of the
Demised Premises if Lessee has not given Mortgagee written notice of such act or
omission giving rise to such right of offset and the same time period as Lessor
is entitled to under the Lease in which to cure such act or omission.

     6.   The Lease may not be amended, altered, or terminated without the prior
written consent of Mortgagee. Mortgagee agrees that it will not unreasonably
withhold its consent to any requested amendment or modification of the Lease
which does not (I) reduce the rent payable by Lessee under the Lease, (ii)
shorten the term of the Lease, or (iii) materially increase the obligations of
Lessor under the Lease. In the event Mortgagee does not respond to a request for
its consent to any amendment or modification of the Lease within thirty (30)
days after the requesting party delivers the request for approval, then
Mortgagee shall be deemed to have approved such amendment or modification.

                                  -2-

<PAGE>

     7.   So long as the Loan is outstanding, Lessee will provide Mortgagee with
the same evidence of payment of taxes and insurance (if Lessee is obligated for
such payments under the Lease) as the Lessor may be entitled under the Lease. In
addition, Lessee will give Mortgagee the same notices, including without
limitation notices of default, and thereafter the same right to cure any
defaults or take any action as the Lessor may be entitled under the Lease,
without the obligation to cure such defaults or take such action.

     8.   If the Lease is canceled or terminated for any reason, if any purchase
option contained in the Lease is exercised, or if Lessee is required to pay to
Lessor any payment in excess of one calendar month in advance, including, but
not limited to lease termination or purchase option payments, refunds of any
type, prepayments of rents, litigation settlements or settlements of past due
rents (all of which shall be referred to herein collectively as "Extraordinary
Rental Payments"), Lessor and Lessee will notify Mortgagee and Lessor consents
to Lessee remitting and Lessee agrees to remit any Extraordinary Rental Payments
to Mortgagee directly and immediately. Subject to the rights of Mortgagee
contained herein, nothing in this paragraph shall constitute a waiver by the
Lessee of its rights against the Lessor under the Lease or limit the rights of
the Lessee to maintain any action at law or equity against the Lessor provided
that such action does not reduce the term of the Lease or the rental obligations
herein referred to during the term of the Lease.

     9.   So long as the Loan is outstanding, Mortgagee or its designee shall
have the same right as Lessor under the Lease to enter upon the Property to
visit or inspect the Property, at such reasonable times as Mortgagee or its
designee may request.

     10.  There shall be no merger of the Lease or the leasehold estate created
thereby with any other estate in the Property, including without limitation the
fee estate, by reason of the same person or entity acquiring or holding,
directly or indirectly, the Lease and said leasehold estate and any such other
estate.

     11.  If Mortgagee shall become the owner of the Demised Premises or the
Demised Premises shall be sold by reason of non-judicial or judicial foreclosure
or other proceedings brought to enforce the Mortgage or the Demised Premises
shall be conveyed by deed in lieu of foreclosure, Lessee agrees to pay all rents
directly to Mortgagee or other purchaser of the Demised Premises, as the case
may be, in accordance with the Lease immediately upon notice of Mortgagee or
such purchaser, as the case may be, succeeding to Lessor's interest under the
Lease, and Mortgagee's or such other purchaser's agreement that Mortgagee (or
such other purchaser, as the case may be) is bound by all of the obligations of
Lessor under the Lease, subject to the terms of this Agreement.

     12.  Lessee acknowledges that the Mortgage and the Assignment of Leases and
Rents in favor of Mortgagee permit the Mortgagee to require Lessee to pay the
rents and other amounts due under the Lease to the Mortgagee in the event Lessor
defaults under the Mortgage. Accordingly, Lessee agrees, subject to the
limitations set forth in this Paragraph, that if the Mortgagee notifies Lessee
of a default under the Mortgagee and demands that the Lessee

                                  -3-

<PAGE>

pay its rent and other sums due under the Lease directly to Mortgagee, the
Lessee will honor such demand beginning with the payment next due after
fifteen (15) days have expired after such notice of default. Notwithstanding
the foregoing, the Lessee will only be obligated to honor one (1) such demand
by the Mortgagee and the Lessee's obligation to make any such payments will
extend to no more than three (3) consecutive monthly payments unless the
Mortgagee has begun diligent, good faith efforts towards the foreclosure of
its lien against the Demised Premises under the Mortgage, is actively
pursuing such efforts, and provides Lessee with written proof of such efforts
within such three (3) month period, in which case Lessee's obligation to make
such payments will extend for an additional three (3) months to a total of
six (6) consecutive monthly payments. Thereafter, the Lessee agrees to
deposit all rents and other amounts due in an escrow account to be released
to the recipient designated by order of a court of competent jurisdiction or
in accordance with written instructions from the Mortgagee and Lessor which
have been approved by the Lessee, or, to Mortgagee upon the consummation of a
foreclosure of the Demised Premises under the Mortgage. Lessor hereby
releases and discharges the Lessee of and from any liability to Lessor
resulting from the Lessee's payment to the Mortgagee in accordance with the
terms of this Agreement.

     13.  If Lessee is a corporation or partnership, Lessee will preserve and
keep in force and effect its corporate or partnership existence and all licenses
or permits necessary to the proper conduct of its business during the Term of
the Lease.

     14.  The Lease and this certificate have been duly authorized, executed and
delivered by the Lessee and constitute legal, valid and binding instruments
enforceable against Lessee in accordance with their respective terms, except as
such terms may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally.

     15.  This Agreement and its terms shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
including without limitation, any purchaser at any foreclosure sale.

     16.  This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, and such counterparts when taken together shall
constitute but one agreement.

     17.  All information, notices or requests provided for or permitted to be
given or made pursuant to this Agreement shall be deemed to be an adequate and
sufficient notice if given in writing and service is made by either (I)
registered or certified mail, postage prepaid, in which case notice shall be
deemed to have been received three (3) business days following deposit to the
mail; or (ii) nationally recognized overnight air courier, next day delivery,
prepaid, in which case such notice shall be deemed to have been received one (I)
business day following delivery to such courier. All notices shall be addressed
to the addresses set forth below, or to such other addresses as may from time to
time be specified in writing by Lessee or Mortgagee to the other:

                                  -4-

<PAGE>

     If to Mortgagee:

               Principal Commercial Advisors, Inc.
               11050 Roe Avenue, Suite 200
               Overland Park, Kansas 66211-1216
               Loan No. 100106

     With copy to:

               Mark M. Sloan
               Thompson & Knight, P.C.
               1700 Pacific Avenue, Suite 3300
               Dallas, Texas 75201

     If to Lessee:

               ADS Alliance Data Systems, Inc.
               4590 B. Broad Street
               Columbus, Ohio 43213
               Attention:  Carolyn Melvin

     With copy to:

               Harriet Anne Tabb
               Tabb & Associates
               8333 Douglas Avenue, Suite 1250
               Dallas, Texas 75225

     If to Lessor:

               c/o Trammell Crow Dallas/Fort Worth, Inc.
               2200 Ross Avenue
               3700 Texas Commerce Tower
               Dallas, Texas 75201

     With copy to:

               Bryant W. Burke
               Vinson & Elkins L.L.P.
               2001 Ross Avenue
               3700 Trammell Crow Center
               Dallas, Texas 75201-2975

                                  -5-

<PAGE>

     IN WITNESS WHEREOF, this Agreement has been fully executed under seal on
     the day and year first above written.

                              MORTGAGEE:

                              PRINCIPAL COMMERCIAL ADVISORS, INC.,
                              an Iowa corporation

                              By:______________________________
                                   Name:_______________________
                                   Title:______________________

                              By:_____________________________
                                   Name:______________________
                                   Title:_____________________

                              LESSOR:

                              WATERVIEW PARKWAY, L.P., a Texas limited
                              partnership

                              By:  1996 DFW Office, Inc., a Delaware
                                   corporation, its General Partner

                              By:_______________________________
                                   Name:________________________
                                   Title: ______________________

                              LESSEE:

                              ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
                              corporation

                              By:______________________________
                                   Name:_______________________
                                   Title:______________________

                                  -6-

<PAGE>

THE STATE OF KANSAS      )
                         )
COUNTY OF JOHNSON        )

     This instrument was acknowledged before me on July ____, 1997 by
______________________________ of Principal Commercial Advisors, Inc., an Iowa
corporation, on behalf of said corporation.

                                   ______________________________
                                   Notary Public, State of Kansas

                                   _____________________________
                                   (printed name)

My commission expires:

___________________________

THE STATE OF KANSAS      )
                         )
COUNTY OF JOHNSON        )

     This instrument was acknowledged before me on July ______, 1997 by
_____________________________ of Principal Commercial Advisors, Inc., an Iowa
corporation, on behalf of said corporation.

                                   ______________________________
                                   Notary Public, State of Kansas

                                   ______________________________
                                   (printed name)

My commission expires:

__________________________

                                  -7-

<PAGE>

THE STATE OF TEXAS       )
                         )
COUNTY OF DALLAS         )

     This instrument was acknowledged before me on July ________, 1997 by
____________________________ of ADS Alliance Data Systems, Inc., a Delaware
corporation, on behalf of said corporation.

                                   ______________________________
                                   Notary Public, State of Texas

                                   ______________________________
                                   (printed name)

My commission expires:

_______________________________

THE STATE OF TEXAS       )
                         )
COUNTY OF DALLAS         )

     This instrument was acknowledged before me on July ______, 1997 by
____________________________ of 1996 DFW Office, Inc., a
Delaware corporation, on behalf of said corporation in its capacity as General
Partner of Waterview Parkway, L.P., a Texas limited partnership.

                                   ______________________________
                                   Notary Public, State of Texas

                                   ______________________________
                                   (printed name)

My commission expires:

___________________________

                                  -8-

<PAGE>
                                EXHIBIT F

AFTER RECORDING,
RETURN TO:

Harriet Anne Tabb
Tabb & Associates
8333 Douglas Avenue
Suite 1250
Dallas, Texas 75225

                                 MEMORANDUM OF LEASE

     This Memorandum of Lease is made and entered into as of, although not
necessarily on, July _____, 1997, by and between WATERVIEW PARKWAY, L.P., a
Texas limited partnership whose address is 2200 Ross Avenue, Suite 3700, Dallas,
Texas, 75201 ("LANDLORD") and ADS ALLIANCE DATA SYSTEMS, INC., a Delaware
corporation, whose address is 5001 Spring Valley, Suite 650, West Tower, Dallas,
Texas, 75244, with a copy to ADS Alliance Data Systems, Inc., 4590 East Broad
Street, Columbus, Ohio, 43213, Attn: Carolyn Melvin ("TENANT").

     1.   LEASED PREMISES. Landlord has leased to Tenant the land described on
EXHIBIT A attached to and made a part of this Memorandum of Lease for all
purposes (the "LAND") and the Building, other improvements, and all electrical,
plumbing, heating, ventilation, and air conditioning, life.safety lighting and
other mechanical systems and equipment located on the Land (the "BUILDING"). The
Land and the Building together are referred to as the Premises. Additionally,
Tenant has been granted the right to use all easements and appurtenances related
to the Premises.

     2.   UNRECORDED LEASE. This Memorandum of Lease is made upon all of the
terms, covenants, and conditions set forth in that certain unrecorded lease by
and between Landlord and Tenant, made to be effective as of the same effective
date as this Memorandum of Lease (the "UNRECORDED LEASE"). All of the terms,
covenants, and conditions of the Unrecorded Lease are made a part of and as
though fully set forth in this Memorandum of Lease.

     3.   COMMENCEMENT DATE/TERM/OPTIONS TO EXTEND. The Unrecorded Lease
commences on the effective date of this Memorandum of Lease and continues until
July 31, 2007. Tenant has two (2) five (5) year options to extend the term of
the Unrecorded Lease.

     4.   INTERPRETATION. Landlord and Tenant have entered into this Memorandum
of Lease in order that third parties may have notice of the existence of the
Unrecorded Lease. This Memorandum of Lease is not a summary of the Unrecorded
Lease. In the event of a conflict between this Memorandum of Lease and the
Unrecorded Lease, the Unrecorded Lease controls.

     5.   TERMINATION. This Memorandum of Lease automatically terminates upon
the expiration or earlier termination of the Unrecorded Lease. At such time as
the Unrecorded Lease expires or is terminated, Landlord may record an affidavit
stating that die Unrecorded Lease has expired or terminated as of a particular
date and the recording of such affidavit will operate to terminate this
Memorandum of Lease. Such document must be in the form of an affidavit, must
include tie statement that an individual is swearing to such facts based on his
or her own knowledge, and must be notarized with a jurat as well as an
acknowledgment.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of
Lease as of the date first set forth above.

LANDLORD:              WATERVIEW PARKWAY, LP., a Texas limited partnership
                       By:  1996 DFW Office, Inc., a Delaware corporation, its
                            general partner

                            By:__________________________________________
                            Name:________________________________________
                            Title:_______________________________________

TENANT:                ADS ALLIANCE DATA SYSTEMS, INC., a Delaware corporation

                            By:_________________________________________
                            Name:_______________________________________
                            Title:______________________________________

                                 F-1

<PAGE>

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

     This instrument was acknowledged before me on July _______, 1997, by
______________________ of 1996 DFW Office, Inc., a Delaware corporation,
general partner of Waterview Parkway, L.P., a Texas limited partnership, on
behalf of said corporation and limited partnership.

                                   _____________________________
                                   Notary Public, State of Texas

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

     This instrument was acknowledged before me on July _______ 1997, by
______________________________ of ADS Alliance Data Systems, Inc., a Delaware
corporation, on behalf of said corporation.

                                   _____________________________
                                   Notary Public, State of Texas

                                  F-2

<PAGE>

                                                                    Exhibit G

14 July 1997

Mr. Drew Peterson
Peterson Reality Group
5001 LBJ Freeway, Suite 875
Dallas, Texas 75244

Re:  Alliance Data Systems

Dear Drew,

The following list represents base building equipment which were identified in
our limited survey as needing immediate or potential future replacement during
the course of the lease term:

A.   Chillers number One and Two
B.   Cooling tower
C.   Emergency Generator
D.   Refrigerated air drier for the tri-plex air compressor
E.   UPS system and batteries
F.   New or relamped and reballasted recessed fluorescent light fixtures
G.   Additional air supply or new HVAC unit(s) to the east wing
H.   The addition of electric unit heaters in return air plenum of the east wing
I.   Chilled water pumps and condenser water pumps
J.   Temperature control air compressor
K.   Built up air handling unit fans
L.   Factory fabricated air handling units
M.   Computer room variable air volume boxes
N.   Provide new, or supplement existing, life safety systems
O.   Provide energy management system
P.   Provide new, or supplement existing, security system

I have not included in this list fixtures and equipment not normally associated
with leasehold improvements such as the telephone switch, furnishings,
computers, peripheral devices and associated hardware and software, and postal
equipment.

Tenant must install each piece of replacement equipment in one of the following
areas: (I) the area where the equipment being replaced is currently located,
(ii) another area within the building, or (iii) the outside screened equipment
area. Tenant must not place any replacement equipment on the roof or outside of
the building (except within the screened equipment area), unless Tenant is
putting the replacement equipment in such location because that is where the
equipment being replaced is currently located.

Please call me if you have any questions.

Sincerely,
Benso Hlavaty Paret

                               Page 1 of 3

<PAGE>

                          [FLOOR PLAN]

SPACE PLAN - OPTION D (8X8 CUBICLES)

 20 OFFICES
109 8X8 CUBICLES
----------------
129 TOTAL

                                    FURNITURE LAYOUT
                                    EAST WING FLOOR PLAN

                               Page 2 of 3

<PAGE>

                          [FLOOR PLAN]

SPACE PLAN - OPTION D (8X8 CUBICLES)

  4 OFFICES
 46 8X8 CUBICLES (INCLUDES PC/LAN RCVG)
----------------
 50 TOTAL

                                    FURNITURE LAYOUT
                                    WEST WING FLOOR PLAN

                               Page 3 of 3

<PAGE>

                           [BUILDING LAYOUT]

                         ALLIANCE DATA SYSTEMS
                        17201 WATERVIEW PARKWAY
                             DALLAS, TEXAS

                               EXHIBIT H

<PAGE>

AFTER RECORDING, RETURN TO:
Harriet Anne Tabb
Tabb & Associates
8333 Douglas Avenue
Suite 1250
Dallas, Texas 75225

                                 MEMORANDUM OF LEASE

     This Memorandum of Lease is made and entered into as of, although not
necessarily on, July _____, 1997, by and between WATERVIEW PARKWAY, L.P., a
Texas limited partnership whose address is 2200 Ross Avenue, Suite 3700,
Dallas, Texas, 75201 ("LANDLORD") and ADS ALLIANCE DATA SYSTEMS, INC., a
Delaware corporation, whose address is 5001 Spring Valley Road, West Tower,
Suite 650, Dallas, Texas, 75244, with a copy to ADS Alliance Data Systems,
Inc., 4590 East Broad Street, Columbus, Ohio, 43213, Attn: Carolyn Melvin
("TENANT").

     1.   LEASED PREMISES. Landlord has leased to Tenant the land described on
EXHIBIT A attached to and made a part of this Memorandum of Lease for all
purposes (the "LAND") and the Building, other improvements, and all electrical,
plumbing, heating, ventilation, and air conditioning, life.safety lighting and
other mechanical systems and equipment located on the Land (the "BUILDING"). The
Land and the Building together are referred to as the Premises. Additionally,
Tenant has been granted the right to use all easements and appurtenances related
to the Premises.

     2.   UNRECORDED LEASE. This Memorandum of Lease is made upon all of the
terms, covenants, and conditions set forth in that certain unrecorded lease by
and between Landlord and Tenant, made to be effective as of the same effective
date as this Memorandum of Lease (the "UNRECORDED LEASE"). All of the terms,
covenants, and conditions of the Unrecorded Lease are made a part of and as
though fully set forth in this Memorandum of Lease.

     3.   COMMENCEMENT DATE/TERM/OPTIONS TO EXTEND. The Unrecorded Lease
commences on the effective date of this Memorandum of Lease and continues until
July 31, 2007. Tenant has two (2) five (5) year options to extend the term of
the Unrecorded Lease.

     4.   INTERPRETATION. Landlord and Tenant have entered into this Memorandum
of Lease in order that third parties may have notice of the existence of the
Unrecorded Lease. This Memorandum of Lease is not a summary of the Unrecorded
Lease. In the event of a conflict between this Memorandum of Lease and the
Unrecorded Lease, the Unrecorded Lease controls.

     5.   TERMINATION. This Memorandum of Lease automatically terminates upon
the expiration or earlier termination of the Unrecorded Lease. At such time as
the Unrecorded Lease expires or is terminated, Landlord may record an affidavit
stating that the Unrecorded Lease has expired or terminated as of a particular
date and the recording of such affidavit will operate to terminate this
Memorandum of Lease. Such document must be in the form of an affidavit, must

                                      1

<PAGE>

include tie statement that an individual is swearing to such facts based on his
or her own knowledge, and must be notarized with a jurat as well as an
acknowledgment.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of
Lease as of the date first set forth above.

LANDLORD:              WATERVIEW PARKWAY, LP., a Texas limited partnership
                       By:  1996 DFW Office, Inc., a Delaware corporation, its
                            general partner

                            By: /s/ Thomas O. McNearny
                               -----------------------------------------
                                  Thomas O. McNearny, III, Executive Vice
                                  President

TENANT:                ADS ALLIANCE DATA SYSTEMS, INC., a Delaware corporation

                            By:   /s/ James E. Anderson
                                  --------------------------------------
                            Name: James E. Anderson
                                  --------------------------------------
                            Title: Ex. VP
                                  --------------------------------------

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

     This instrument was acknowledged before me on July 16th, 1997, by Thomas
O. McNearny, Executive Vice President of 1996 DFW Office, Inc., a Delaware
corporation, general partner of Waterview Parkway, L.P., a Texas limited
partnership, on behalf of said corporation and limited partnership.

                                   /s/ Shirley Fryman
[SEAL]                             -----------------------------
                                   Notary Public, State of Texas

                                       2

<PAGE>

THE STATE OF TEXAS       Section
                         Section
COUNTY OF DALLAS         Section

     This instrument was acknowledged before me on July 16th 1997, by James
E. Anderson Ex V.P. of ADS Alliance Data Systems, Inc., a Delaware
corporation, on behalf of said corporation.

                                   /s/ Shirley Fryman
[SEAL]                             ------------------------------
                                   Notary Public, State of Texas

                                      3

<PAGE>

                                EXHIBIT A

     BEING a 410,021 square feet (9.4128 acres) tract of land situated in the
John Clay Survey, Abstract No. 313, Dallas County, Texas, L50 being all of
Lot 1, Block A/8735, Dresser Addition, an addition to the City of Dallas
according to the plat thereof recorded in Volume 81203, Page 0275, Deed
Records, Dallas County, Texas, and being more particularly described as
follows:

     BEGINNING at a 5/8" iron rod set for corner in the west line of
Waterview Road (80' public R.O.W.) at the northeast corner of U.T.D. Synergy
Park Phase II, as recorded by plat in Volume 86051, Page 3744, Deed Records,
Dallas County, Texas.

     THENCE WEST departing the said west line of Waterview Road, a distance
of 569.26 feet to a 5/8" iron rod set for corner in the east line of that
certain tract of land conveyed to Texas A&M University in Volume 72221, Page
2873, Deed Records, Dallas County, Texas, at the northwest corner of said
U.T.D. Synergy Park Phase II;

     THENCE N00DEG.12'12"W along the west line of said Texas A&M
University tract, a distance of 610.00 feet to a 1/2" iron rod found for
corner at the southwest corner of U.T.D. Synergy Park Phase I, as recorded by
plat in Volume 85245, Page 4873, Deed Records, Dallas County, Texas.

     THENCE EAST departing the east line of said Texas A&M University tract
and along the south line of said U.T.D. Synergy Park Phase I, a distance of
700.00 feet to a 3/8" iron rod found for corner in the aforementioned west
line of Waterview Road;

     THENCE along the said west line of Waterview Road the following:

     S00DEG.12'12"E a distance of 223.02 feet to a 5/8" iron rod set for
     corner at the beginning of a curve to the right which has a central angle
     of 30DEG.12'12", a radius of 600.00 feet, and a chord which
     bears S14DEG.53'54"W - 312.64 feet;

     Along said curve to the right, an arc distance of 316.29 feet to a 5/8"
     iron rod set for corner at the end of said curve;

     S30DEG.00'00"W a distance of 97.96 feet to the POINT OF BEGINNING and
     containing 410,021 square feet or 9.4128 acres of land.<PAGE>

                       PREFERRED STOCK PURCHASE AGREEMENT

                                      among

                        ALLIANCE DATA SYSTEMS CORPORATION

                                       and

                             THE SEVERAL PURCHASERS
                           NAMED IN SCHEDULE I HERETO

                            Dated as of July 12, 1999

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page

<S>      <C>                                                                                                  <C>
I.       PURCHASE AND SALE OF THE PREFERRED SHARES..............................................................2

         SECTION 1.01             Issuance, Sale and Delivery of the Preferred Shares...........................2
         SECTION 1.02             Closing Date..................................................................2

II.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................2

         SECTION 2.01             Organization, Qualifications and Corporate Power..............................2
         SECTION 2.02             Authorization of Agreements, Etc..............................................3
         SECTION 2.03             Validity......................................................................4
         SECTION 2.04             Capital Stock; Subsidiaries and Investments...................................4
         SECTION 2.05             Financial Statements; Absence of Undisclosed
                                  Liabilities; No Material Adverse Change.......................................5
         SECTION 2.06             Governmental Approvals........................................................6
         SECTION 2.07             Third Party Approvals; Consents...............................................6
         SECTION 2.08             Litigation, Etc...............................................................6
         SECTION 2.09             Compliance with Laws..........................................................6

III.     REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.......................................................6

         SECTION 3.01             Authorization.................................................................6
         SECTION 3.02             Validity......................................................................7
         SECTION 3.03             Investment Representations....................................................7

IV.      CONDITIONS PRECEDENT...................................................................................8

         SECTION 4.01             Conditions Precedent to the Obligations of the Purchasers.....................8
         SECTION 4.02             Conditions Precedent to the Obligations of the Company.......................10

V.       MISCELLANEOUS.........................................................................................10

         SECTION 5.01             Survival of Agreements.......................................................10
         SECTION 5.02             Brokerage....................................................................10
         SECTION 5.03             Parties in Interest..........................................................10
         SECTION 5.04             Notices......................................................................11
         SECTION 5.05             Law Governing................................................................11
         SECTION 5.06             Entire Agreement; Modifications..............................................11
         SECTION 5.07             Counterparts.................................................................11

</TABLE>

<PAGE>

                         INDEX TO EXHIBITS AND SCHEDULES

<TABLE>
<CAPTION>

EXHIBIT                           DESCRIPTION
<S>                               <C>

  A                      Form of Restated Certificate of
                         Incorporation of the Company

  B                      Form of Shareholders Agreement Amendment

SCHEDULE                          DESCRIPTION

I                        Purchasers/Purchase Price of Preferred Shares

</TABLE>

                                      ii
<PAGE>

     PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of July
12, 1999, among ALLIANCE DATA SERVICES CORPORATION, a Delaware corporation
(the "COMPANY"), and the several purchasers named in Schedule I hereto (each
hereinafter referred to individually as a "PURCHASER", and collectively, as
the "PURCHASERS").

     WHEREAS, the Company is party to a Stock Purchase Agreement (the
"ACQUISITION AGREEMENT"), dated as of June 8, 1999, among the Company, SPS
Payment Systems, Inc., a Delaware corporation (the "Seller"), SPS Commercial
Services, Inc., a Delaware corporation and wholly-owned subsidiary of the
Seller ("COMMERCIAL SERVICES"), and ADS Network Services, Inc., a Delaware
corporation and wholly-owned subsidiary of the Seller (together with
Commercial Services, the "SELLER SUBSIDIARIES"), pursuant to which the
Company has agreed to acquire (the "ACQUISITION") from the Seller all of the
issued and outstanding shares of capital stock of each of the Seller
Subsidiaries;

     WHEREAS, subject to the terms and conditions set forth herein, in order
to finance, in part, the Acquisition, the Company wishes to issue, sell and
deliver to the Purchasers on the Closing Date (as defined in Section 1.02) an
aggregate 120,000 shares (the "PREFERRED SHARES") of its Series A Cumulative
Convertible Preferred Stock, $0.01 par value ("SERIES A PREFERRED STOCK"),
which Preferred Shares shall initially be convertible into 80,000,000 shares
of Common Stock, par value $.01 per share, of the Company ("COMMON STOCK"),
and the Purchasers, severally, wish to purchase the Preferred Shares;

     WHEREAS, in connection with the sale of the Preferred Shares pursuant to
this Agreement, the Company desires to amend and restate its Certificate of
Incorporation by filing a Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware substantially in the form of
Exhibit A hereto (the "RESTATED CERTIFICATE OF INCORPORATION") in order to
(i) authorize the issuance of up to 120,000 shares of Series A Preferred
Stock and (ii) increase the number of authorized shares of Common Stock to
600,000,000 shares;

     WHEREAS, certain of the Purchasers are party to an Amended and Restated
Stockholders Agreement, dated as of August 30, 1996 and amended as of July
24, 1998 and further amended as of August 31, 1998 (as so amended, the
"EXISTING STOCKHOLDERS AGREEMENT"), among the Company (which is known in the
Existing Stockholders Agreement by its former name, "World Financial Network
Holding Corporation"), Limited Commerce Corp., a Delaware corporation, WCAS
Capital Partners II, L.P., a Delaware limited partnership, Welsh, Carson,
Anderson & Stowe VI, L.P., a Delaware limited partnership, Welsh, Carson,
Anderson & Stowe VII, L.P., a Delaware limited partnership, Welsh, Carson,
Anderson & Stowe VIII, L.P., a Delaware limited partnership, WCAS Information
Partners, L.P., a Delaware limited partnership, and the several other
investors signatory thereto; and

     WHEREAS, the parties to this Agreement wish to further amend (such
amendment, the "STOCKHOLDERS AGREEMENT AMENDMENT") the Existing Stockholders
Agreement to set forth certain restrictions upon the transfer of the
Preferred Shares, include the Common Stock

<PAGE>

issuable upon conversion of the Preferred Shares in such agreement and join
each of the Purchasers who are not already party to such agreement as parties
thereto (as so amended, the STOCKHOLDERS AGREEMENT").

     NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

                                   ARTICLE I.

                    PURCHASE AND SALE OF THE PREFERRED SHARES

     SECTION 1.01 ISSUANCE, SALE AND DELIVERY OF THE PREFERRED SHARES.

     (a) Subject to the terms and conditions set forth herein, on the Closing
Date the Company shall issue, sell and deliver to each Purchaser, and each
Purchaser, acting severally and not jointly, shall purchase from the Company,
the number of Preferred Shares set forth opposite the name of such Purchaser
on Schedule I hereto under the caption "Preferred Shares". On the Closing
Date, the Company shall issue certificates in definitive form, registered in
the name of each such Purchaser, evidencing the Preferred Shares being
purchased by him, her or it hereunder.

     (b) As payment in full for the Preferred Shares being purchased by him,
her or it hereunder, and against delivery thereof as aforesaid, on the
Closing Date, each Purchaser, acting severally and not jointly, shall pay to
the Company, by wire transfer of immediately available funds to an account
designated by the Company, the amount set forth opposite the name of each
such Purchaser on Schedule I hereto under the caption "Purchase Price of
Preferred Shares".

     SECTION 1.02 CLOSING DATE. The closing of the sale and purchase of the
Preferred Shares contemplated by Section 1.01 shall take place at the offices
of Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller Plaza, New
York, New York 10111, as soon as practicable (but in no event later than
October 15, 1999) after the satisfaction or waiver of each of the conditions
to the obligations of the parties set forth in Sections 4.01 and 4.02 hereof,
or at such other date and time as may be mutually agreed upon among the
Purchasers and the Company (such date and time of the closing being herein
called the "CLOSING DATE").

                                   ARTICLE II.

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to each Purchaser as follows:

     SECTION 2.01 ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER. The
Company and each of its Subsidiaries (as hereinafter defined) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the

                                        2

<PAGE>

corporate power and authority and all material licenses, permits and
authorizations necessary to own, lease and/or operate its properties and
assets and to carry on its businesses as now being conducted, and is duly
qualified and is in good standing as a foreign corporation, and authorized to
do business in all jurisdictions in which the conduct of its business or the
ownership or operation of its properties or assets makes such qualification
or authorization necessary and in which the failure to be so qualified would
have a material adverse effect on the business, properties, assets,
liabilities, results of operations, prospects or financial condition of the
Company or such Subsidiary. The Company has the corporate power and authority
to execute and deliver this Agreement and the Stockholders Agreement
Amendment, to perform the transactions contemplated by this Agreement and the
Stockholders Agreement, and, upon the filing of the Restated Certificate of
Incorporation, to issue, sell and deliver the Preferred Shares and the shares
of Common Stock from time to time issuable upon conversion of the Preferred
Shares ("CONVERSION SHARES"). For purposes of this Agreement, the term
"SUBSIDIARY", when used with respect to the Company, shall mean any
corporation or other business entity or association, a majority of whose
outstanding securities having the right generally to vote for the election of
directors or otherwise direct the actions of such entity or association is at
the time owned, directly or indirectly, by the Company and/or one or more
other Subsidiaries of the Company.

     SECTION 2.02 AUTHORIZATION OF AGREEMENTS, ETC.

     (a) Except as described in Schedule 2.02(a) hereto, each of (i) the
execution and delivery by the Company of this Agreement and the Stockholders
Agreement Amendment and the performance by the Company of its obligations
hereunder and under the Stockholders Agreement, (ii) the issuance and sale by
the Company of the Preferred Shares and the issuance by the Company of the
Conversion Shares upon the conversion of the Preferred Shares and (iii) the
filing of the Restated Certificate of Incorporation have been duly authorized
by all requisite corporate action and will not (A) violate (x) any provision
of law, any order of any court or other agency of government, (y) the
Certificate of Incorporation or By-laws of the Company or the Certificate or
Articles of Incorporation, By-laws and/or other organizational documents of
any Subsidiary, or (z) any provision of any material indenture, note,
agreement or other instrument to which the Company or any of its Subsidiaries
or any of their respective properties or assets is bound, or (B) conflict
with, result in a breach of, or constitute (with due notice or lapse of time
or both) a default under any material indenture, note, agreement or other
instrument to which the Company or any of its Subsidiaries or any of their
respective properties or assets is bound, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever (a
"LIEN") upon any of the properties or assets of the Company or any of its
Subsidiaries.

     (b) The issuance of the Preferred Shares has been duly authorized by the
Company and, when sold and paid for in accordance with this Agreement, the
Preferred Shares will be validly issued, fully paid and nonassessable. The
Conversion Shares have been duly reserved for issuance upon conversion of the
Preferred Shares, and will be validly issued and outstanding, fully paid and
nonassessable shares of Common Stock when issued in accordance with this
Agreement and the Restated Certificate of Incorporation. The issuance, sale
and

                                        3
<PAGE>

delivery of the Preferred Shares to the Purchasers hereunder is not, and the
issuance, sale and delivery of the Conversion Shares to the Purchasers upon
conversion of the Preferred Shares will not be, subject to any preemptive
rights of stockholders of the Company or to any right of first refusal, right
of first offer or other similar right (contractual or otherwise) in favor of
any person (other than preemptive rights of stockholders party to the
Existing Shareholders Agreement, as to which waivers will have been obtained
on or prior to the Closing Date).

     SECTION 2.03 VALIDITY. This Agreement has been, and the Stockholders
Agreement Amendment will be, duly executed and delivered by the Company and
this Agreement constitutes, and the Stockholders Agreement will constitute,
when executed and delivered by the Company as provided in this Agreement, the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws from time to time in effect affecting the enforcement of
creditors' rights generally and to general equitable principles.

     SECTION 2.04 CAPITAL STOCK; SUBSIDIARIES AND INVESTMENTS.

     (a) As of the date hereof, the authorized capital stock of the Company
consists of 450,000,000 shares of Common Stock, of which 427,431,940 shares
are issued and outstanding, fully paid and non-assessable, and no other
shares of capital stock have ever been issued. On the Closing Date, after the
filing of the Restated Certificate of Incorporation, the authorized capital
stock of the Company will consist of 600,000,000 shares of Common stock and
120,000 shares of Series A Preferred Stock. Schedule 2.04(a) sets forth a
complete and accurate list of all of the record owners of capital stock of
the Company and also reflects the fully-diluted Common Stock ownership of the
Company. None of the outstanding shares of capital stock of the Company were
issued in violation of any preemptive rights of stockholder of the Company or
any right of first refusal or right of first offer or similar right in favor
of any person and, except as contained in the Existing Shareholders
Agreement, no such rights exist. The number of shares of Common Stock
issuable upon conversion of all outstanding securities of the Company
convertible into Common Stock, and the number of shares of Common Stock
issuable upon exercise of outstanding warrants and options to purchase Common
Stock will not be affected by the transactions contemplated by this Agreement.

     (b) Except as set forth on Schedule 2.04(b), neither the Company nor any
of its Subsidiaries holds of record or beneficially, or has any right or
obligation to acquire, directly or indirectly, (i) any shares of outstanding
capital stock or securities convertible into or exchangeable for capital
stock of any other corporation or entity or (ii) any participating interest
in any partnership, joint venture or other non-corporate business enterprise.
The total authorized capital stock and par value of each of the Company's
Subsidiaries and the total issued and outstanding shares of capital stock of
each of such Subsidiary is set forth on Schedule 2.04(b). All of the issued
and outstanding shares of the capital stock of each of the Company's
Subsidiaries are duly

                                        4

<PAGE>

and validly issued, fully paid and nonassessable and are owned of record and
beneficially by the Company, and except as set forth on Schedule 2.04(b) no
such shares are subject to any Liens.

     (c) Other than as set forth in Schedule 2.04(c), (i) no subscription,
warrant, option, convertible security or other right (contingent or other) to
purchase or acquire any shares of any class of capital stock of the Company
or any of its Subsidiaries is authorized or outstanding and (ii) there is not
any commitment of the Company or any of its Subsidiaries to issue any shares,
warrants, options or other such rights or to distribute to holders of any
class of such entity's capital stock any evidences of indebtedness or assets.
Neither the Company nor any of its Subsidiaries has any obligation
(contingent or other) to purchase, redeem or otherwise acquire any shares of
its capital stock or any interest therein or to pay any dividend or make any
other distribution in respect thereof. To the best of the Company's
knowledge, other than as set forth on Schedule 2.04(c), there are no
stockholders agreements, registration rights agreements or other agreements
(whether or not the Company is a party thereto) relating to the voting or
transfer of the Company's securities.

     SECTION 2.05 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES;
NO MATERIAL ADVERSE CHANGE.

     (a) The Company has delivered to the Purchasers true and complete copies
of the audited consolidated balance sheets of the Company as of December 31,
1998 and January 31, 1998 and the related statements of operations, changes
in stockholders' equity and cash flows for the eleven months ended December
31, 1998 and the year ended January 31, 1998, each certified by Deloitte &
Touche, LLP, the independent public accountants of the Company. Such
financial statements and the related notes thereto are in accordance with the
books and records of the Company and its Subsidiaries, and present fairly, in
all material respects, the consolidated financial position of the Company and
its Subsidiaries, as of such dates and the consolidated results of their
operations for the respective periods then ended in accordance with generally
accepted accounting principles, consistently applied.

     (b) Except as set forth in Schedule 2.05(b) hereto, as of the date
hereof Closing Date neither the Company nor any of its Subsidiaries has any
material obligation or liability (whether accrued, absolute, contingent,
unliquidated or otherwise to the Company or any Subsidiary, whether due or to
become due and regardless of when asserted) other than: (i) liabilities set
forth or reflected on the audited balance sheet as of December 31, 1998 (or
the related notes thereto) referred to in (a) above and (ii) liabilities and
obligations which have arisen December 31, 1998 in the ordinary course of
business and consistent with past practice (none of which is a liability
arising from breach of contract, breach of warranty, tort, infringement or
lawsuit).

     (c) There has been no material adverse change in the business,
properties, assets, liabilities, results of operations, prospects or
financial condition of the Company and its Subsidiaries, taken as a whole,
since December 31, 1998.

                                        5

<PAGE>

     SECTION 2.06 GOVERNMENTAL APPROVALS. Other than filings required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
filing of the Restated Certificate of Incorporation with the Secretary of
State of Delaware, and subject to the accuracy of the representations and
warranties of the Purchasers set forth in Article IV hereof, no registration
or filing with, or consent or approval of, or other action by, any federal,
state, foreign or other governmental agency or instrumentality is or will be
necessary for the valid execution and delivery of this Agreement or the
Stockholders Agreement Amendment or the performance of this Agreement or the
Stockholders Agreement or the issuance, sale and delivery of the Preferred
Shares or the Conversion Shares.

     SECTION 2.07 THIRD PARTY APPROVALS; CONSENTS. Except as set forth on
Schedule 2.07 hereto, no permit, consent, approval, authorization of,
declaration to or filing with, any third party is required in connection with
the execution and delivery of this Agreement or the Stockholders Agreement
Amendment or the performance of this Agreement or the Stockholders Agreement
or the filing of the Restated Certificate of Incorporation or the issuance of
the Preferred Shares and/or the Conversion Shares.

     SECTION 2.08 LITIGATION, ETC. Except as set forth on Schedule 2.08
hereto, there are no actions, suits, proceedings, orders, investigations or
claims pending or, to the best of the Company's knowledge, threatened against
or affecting the Company or any of its Subsidiaries, at law or in equity, or
before or by any governmental department, commission, board, bureau, agency
or instrumentality which (i) if adversely determined, could reasonably be
expected to have a material adverse affect on the business, properties,
assets, liabilities, results of operations, prospects or condition (financial
or other) of the Company and its Subsidiaries, taken as a whole or (ii) which
seek to enjoin or prevent the consummation of the transactions contemplated
by this Agreement. Neither the Company nor any of its Subsidiaries is subject
to any judgment, order or decree of any court or other (foreign or domestic)
governmental agency.

     SECTION 2.09 COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries has violated any law or any governmental regulation or
requirement which violation would reasonably be expected to have a Material
Adverse Effect, and the Company has not received notice of any such violation.

                                  ARTICLE III.

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     Each Purchaser, severally and not jointly, represents and warrants to
the Company as follows:

     SECTION 3.01 AUTHORIZATION. The execution, delivery and performance by
such Purchaser of this Agreement and the Stockholders Agreement Amendment and
the purchase and receipt of the Preferred Shares being purchased by such
Purchaser, have been duly authorized by

                                        6
<PAGE>

all requisite action on the part of such Purchaser, and will not violate any
provision of law, any order of any court or other agency of government
applicable to such Purchaser, the governing instrument of such Purchaser, or
any provision of any material indenture, agreement or other instrument by
which such Purchaser or any of such Purchaser's properties or assets are
bound, or conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such material indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of such Purchaser.

     SECTION 3.02 VALIDITY. This Agreement and the Stockholders Agreement
Amendment have been duly executed and delivered by such Purchaser and this
Agreement and the Stockholders Agreement each constitutes the legal, valid
and binding obligation of such Purchaser, enforceable against such Purchaser
in accordance with its terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws from time to time in effect affecting the enforcement of creditors'
rights generally and to general equity principles.

     SECTION 3.03 INVESTMENT REPRESENTATIONS. Such Purchaser is acquiring the
Preferred Shares being purchased by him, her or it hereunder for his, her or
its own account for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof. Such Purchaser further
represents that he, she or it understands that (i) the Preferred Shares have
not been registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), by reason of their issuance in a transaction exempt from
the registration requirements of the Securities Act pursuant to Section 4(2)
thereof, (ii) the Preferred Shares must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration, (iii) the Preferred Shares will bear a legend
to such effect, and (iv) the Company will make a notation on its transfer
books to such effect. Such Purchaser further understands the exemption from
registration afforded by Rule 144 under the Securities Act depends on the
satisfaction of various conditions and that, if applicable, Rule 144 affords
the basis of sales of the Preferred Shares only in limited amounts under
certain conditions.

     Such Purchaser further represents and warrants to the Company that he,
she or it has had full opportunity to have access to and to examine the
facilities, personnel and records of the Company, that he, she or it is
capable of evaluating independently the prospects of the Company and has made
such an evaluation in connection with his, her or its investment in the
Preferred Shares being purchased by such Purchaser and had adequate financial
means to bear the risk of his, her or its investment in the Company.

                                        7

<PAGE>

                                   ARTICLE IV.

                              CONDITIONS PRECEDENT

     SECTION 4.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASERS.
The obligations of each Purchaser hereunder are, at his, her or its option,
subject to the satisfaction, on or before the Closing Date, of the following
conditions:

     (a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on the date hereof and on
the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of such date, and the
Company shall have certified to such effect to the Purchasers in writing.

     (b) PERFORMANCE. The Company shall have performed and complied with all
agreements and conditions contained herein required to be performed or
complied with by it prior to or on the Closing Date, and the Company shall
have certified to such effect to the Purchasers in writing.

     (c) ALL PROCEEDINGS TO BE SATISFACTORY; WAIVERS AND CONSENTS. All
corporate and other proceedings to be taken by the Company, and all waivers
and consents to be obtained by the Company in connection with the
transactions contemplated hereby (I.E., waivers and consents in respect of
all agreements listed on Schedule 2.07), shall have been taken or obtained by
the Company and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Purchasers and their counsel.

     (d) CONSUMMATION OF TRANSACTIONS. On the Closing Date, (i) each of the
other Purchasers and the Company shall have consummated the transactions
contemplated hereby with respect to such parties and (ii) each of the
conditions precedent to the Company's obligations under the Acquisition
Agreement shall have been satisfied and not waived (unless waived with the
consent of the Purchasers), and the Company shall have certified to such
effect to the Purchasers in writing (it being understood and agreed that
simultaneously with the closing of the transactions contemplated by this
Agreement, the Company shall consummate the Acquisition in accordance with
the material terms set forth in the Acquisition Documents (as hereinafter
defined).

     (e) AMENDMENT AND RESTATEMENT OF THE CERTIFICATE OF INCORPORATION OF THE
COMPANY. On or prior to the Closing Date, the Restated Certificate of
Incorporation shall have been duly approved by the shareholders and Board of
Directors of the Company and duly filed with the Secretary of State of the
State of Delaware and the Purchasers and their counsel shall have received
evidence of such filing which is reasonably satisfactory to them.

                                        8

<PAGE>

     (f) STOCKHOLDERS AGREEMENT AMENDMENT. On the Closing Date, the Company
and each of the other parties thereto (other than the Purchasers) shall have
executed and delivered the Stockholders Agreement Amendment.

     (g) SUPPORTING DOCUMENTS. On or prior to the Closing Date, the
Purchasers shall have received copies of the following supporting documents:

     (i)  (1) copies of the Certificate of Incorporation of the
          Company and all amendments thereto, certified as of a recent
          date by the Secretary of State of the State of Delaware and
          (2) a certificate of said Secretary dated as of a recent
          date as to the due incorporation and good standing of the
          Company and listing all documents of the Company on file
          with said Secretary;

     (ii) a certificate of the Secretary of the Company dated the
          Closing Date and certifying: (1) that attached thereto is a
          true and complete copy of the Bylaws of the Company as in
          effect on the date of such certification; (2) that attached
          thereto is a true and complete copy of resolutions adopted
          by the Board of Directors of the Company authorizing the
          execution and delivery of this Agreement and the
          Shareholders Agreement Amendment, the performance of this
          Agreement and the Shareholders Agreement, the filing of the
          Restated Certificate of Incorporation, the issuance of the
          Preferred Shares and the Conversion Shares and the
          reservation of shares of Common Stock for issuance upon
          conversion of the Preferred Shares, and that all such
          resolutions are still in full force and effect and are all
          the resolutions adopted by the Board of Directors of the
          Company in connection with the transactions contemplated by
          this Agreement; (3) that attached thereto is a true and
          complete copy of resolutions adopted by the shareholders of
          the Company authorizing the filing of the Restated
          Certificate of Incorporation and that all such resolutions
          are still in full force and effect and are all the
          shareholder resolutions adopted in connection with the
          transactions contemplated by this Agreement; (4) that,
          except for the filing of the Restated Certificate of
          Incorporation, the Certificate of Incorporation of the Buyer
          has not been amended since the date of the last amendment
          referred to in the certificate delivered pursuant to clause
          (i)(2) above; (5) attached thereto is a true and correct
          copy of the Acquisition Agreement together with all
          exhibits, annexes, schedules and other material documents
          executed or delivered in connection with the Acquisition
          (collectively, the "ACQUISITION DOCUMENTS") and (5) as to
          the incumbency and specimen signature of each officer of the
          Company executing this Agreement, the Shareholders Agreement
          Amendment and/or any certificate or instrument furnished
          pursuant hereto;

                                        9

<PAGE>

     (iii)      such additional supporting documents and other information
                with respect to the operations and affairs of the Company as
                the Purchasers or their counsel may reasonably request.

     All such supporting documents shall be satisfactory in form and
substance to the Purchasers and their counsel.

     SECTION 4.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company hereunder are, at its option, subject to the
satisfaction, on or before the Closing Date, of the following conditions:

     (a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of each Purchaser contained in this Agreement
shall be true and correct in all material respects on the Closing Date, with
the same effect as though such representations and warranties had been made
on and as of such date.

     (b) PERFORMANCE. Each Purchaser shall have performed and complied with
all agreements and conditions contained herein required to be performed or
complied with by him, her or it prior to or on the Closing Date.

     (c) SHAREHOLDER CONSENT. The requisite percentage of shareholders of the
Company shall have approved the filing of the Restated Certificate of
Incorporation.

                                   ARTICLE V.

                                 MISCELLANEOUS

     SECTION 5.01 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the issuance of the Preferred Shares pursuant
hereto, and all statements contained in any certificate or other instrument
delivered by the Company hereunder shall be deemed to constitute
representations and warranties made by the Company.

     SECTION 5.02 BROKERAGE. Each party hereto shall indemnify and hold
harmless the other against and or in respect of any claim for brokerage or
other commissions relative to this Agreement or to the transactions
contemplated hereby, based in any way on agreements, arrangements or
understandings made or claimed to have been made by such party with any third
party.

     SECTION 5.03 PARTIES IN INTEREST. All covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not.

                                        10

<PAGE>

     SECTION 5.04 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed by first
class registered mail, postage prepaid,

     if to the Company, to it at:

                  17655 Waterview Parkway
                  Dallas, Texas 75252
                  Attention: General Counsel

     if to any Purchaser to him, her or it at:

                  c/o Welsh, Carson, Anderson & Stowe
                  320 Park Avenue
                  Suite 2500
                  New York, New York 10022-6815

or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other parties hereto.

     SECTION 5.05 LAW GOVERNING. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

     SECTION 5.06 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and may not be modified or amended except in writing.

     SECTION 5.07 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                            [signature pages follow]

                                        11
<PAGE>

     IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the day and year first above written.

                                        ALLIANCE DATA SYSTEMS CORPORATION

                                        By /s/ Michael Beltz
                                          --------------------------------
                                        Name: Michael Beltz
                                        Title: EVP

                                        WELSH, CARSON, ANDERSON
                                        & STOWE VIII, L.P.

                                        By:      WCAS VIII Associates, LLC,
                                                 its General Partner

                                        By
                                          --------------------------------
                                        Name:
                                        Title: Managing Member

                                        WCAS INFORMATION PARTNERS, L.P.

                                        By:      WCAS Info Partners,
                                                 its General Partner

                                        By
                                          --------------------------------
                                        Name:
                                        Title: General Partner

<PAGE>

     IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the day and year first above written.

                                        ALLIANCE DATA SYSTEMS CORPORATION

                                        By
                                          --------------------------------
                                        Name:
                                        Title:

                                        WELSH, CARSON, ANDERSON
                                        & STOWE VIII, L.P.

                                        By:      WCAS VIII Associates, LLC,
                                                 its General Partner

                                        By /s/ Robert A. Minicucci
                                          --------------------------------
                                        Name: Robert A. Minicucci
                                        Title: Managing Member

                                        WCAS INFORMATION PARTNERS, L.P.

                                        By:      WCAS Info Partners,
                                                 its General Partner

                                        By /s/ Thomas E. McInerney
                                          --------------------------------
                                        Name: Thomas E. McInerney
                                        Title: General Partner

<PAGE>

                                        Patrick J. Welsh
                                        Russell L. Carson
                                        Bruce K. Anderson
                                        Richard H. Stowe
                                        Andrew M. Paul
                                        Thomas E. McInerney
                                        James B. Hoover
                                        Laura M. VanBuren
                                        Robert A. Minicucci
                                        Anthony J. de Nicola
                                        Paul B. Queally
                                        Lawrence B. Sorrel
                                        Priscilla A. Newman
                                        Rudolph E. Rupert
                                        D. Scott Mackesy

                                        By /s/ Laura M. VanBuren
                                          --------------------------------
                                        Laura M. VanBuren
                                        Individually and as Attorney-in-Fact

                                        /s/ Kenneth Melkis
                                        ----------------------------------
                                        Kenneth Melkis

                                        /s/ David F. Bellet
                                        ----------------------------------
                                        David F. Bellet

                                        /s/ John Almeida
                                        ----------------------------------
                                        John Almeida

                                        /s/ Sean Traynor
                                        ----------------------------------
                                        Sean Traynor

                                        /s/ Jonathan M. Rather
                                        ----------------------------------
                                        Jonathan M. Rather

<PAGE>

                                                                      SCHEDULE I

                 PURCHASERS / PURCHASE PRICE OF PREFERRED SHARES

<TABLE>
<CAPTION>

PURCHASER                                                       PREFERRED SHARES            PURCHASE PRICE
                                                                                       OF PREFERRED SHARES
<S>                                                             <C>                    <C>
Welsh, Carson, Anderson                                                  113,886              $113,886,000
  & Stowe VIII, L.P.

WCAS Information Partners, L.P.                                              420                  $420,000

Patrick J. Welsh                                                       1,182.022                $1,182,022

Russell L. Carson                                                      1,052.312                $1,052,312

Bruce K. Anderson                                                      1,308.696                $1,308,696

Richard H. Stowe                                                         322.658                  $322,658

Andrew M. Paul                                                           298.299                  $298,299

Thomas E. McInerney                                                      518.824                  $518,824

Laura M. VanBuren                                                         20.560                   $20,560

James B. Hoover                                                           35.435                   $35,435

Robert A. Minicucci                                                      433.283                  $433,283

Anthony J. de Nicola                                                     124.932                  $124,932

Paul B. Queally                                                           79.080                   $79,080

Lawrence B. Sorrel                                                        56.915                   $56,915

Priscilla A. Newman                                                       11.383                   $11,383

Rudolph E. Rupert                                                         56.915                   $56,915

D. Scott Mackesy                                                          14.229                   $14,299

<PAGE>

Kenneth Melkis                                                           100.000                  $100,000

David F. Bellet                                                           28.457                   $28,457

Sean Traynor                                                              10.000                   $10,000

John Almedia                                                              20.000                   $20,000

Jonathan M. Rather                                                        20.000                   $20,000
                                                                          ------                   -------

Totals:                                                                  120,000              $120,000,000

</TABLE>
<PAGE>

                                                 SCHEDULE 2.02(a)

                                             AUTHORIZATION AGREEMENTS

None

<PAGE>

                                                 SCHEDULE 2.04(a)

<TABLE>
<CAPTION>

ALLIANCE DATA SYSTEMS CORPORATION REVISED 7/12/99                                                                    STOCK LEDGER

SHAREHOLDER              ISSUE DATE          # of SHARES                TOTAL SHARES        % of FULLY DILUTED       % OF OWNERSHIP
                                                                                            COMMON SHARES            ISSUED SHARES
<S>                      <C>                 <C>                      <C>                   <C>                      <C>
Limited Commerce             8/29/98         110,000,000
Corp                         8/30/98          21,788,572
                             8/31/98             181,818
                                                                      131,970,390               29.3437842           30.57518214

WCAS VII L.P.                8/29/98         110,115,170
                             8/30/98    (48,828,370 - 21,788,572)=
                                              29,297,022
                             7/24/96          21,889,833              161,302,025              35.88571056           37.73747582

WCAS VIII L.P.               7/24/96          84,454,546               84,454,546              14.33155036           15.07948751

WCAS Information   8/29/96 & 8/30/96             622,110
Partners LP                  7/24/96             364,007                  986,117               0.21926437           0.230707373

Patrick J. Welsh            11/15/90           1,000,010
                             8/30/96            -100,000
                             8/30/96            -100,000
                             8/30/96            -100,000
                             8/30/96             183,240
                             7/24/95             862,667                1,745,917              0.388295867           0.405466667

Carol Ann Welsh FBO
Eric Welsh U/A dtd
11/26/84                     8/30/96              100,000
                                                                          100,000              0.022235127          0.023395538

Carol Ann Welsh FBO
Randall Welsh U/A dtd
11/26/84                     8/30/96              100,000
                                                                          100,000              0.022235127          0.023395538

Carol Ann Welsh FBO
Jennifer Welsh U/A dtd
11/26/84                     8/30/96              100,000
                                                                          100,000              0.022235127          0.023395538

Russell L. Carson            8/29/96              849,970
                             8/30/96              140,484
                             7/24/96              830,717               1,821,171               0.40483969          0.426072745

Bruce K. Anderson            8/29/96            1,000,010
                             8/30/96              305,400
                             8/29/97              -45,000
                             7/24/96              953,948               2,214,358               0.49236532          0.518080957

Richard H. Stowe             8/29/96              399,960
                             8/30/96               91,620
                             7/24/96               68,450                 560,030              0.124523363          0.131022028

Andrew M. Paul               8/29/96              199,950
                             8/30/96               81,080
                             7/24/96              277,458                 538,518              0.119740163          0.125859181

Thomas E. McInerney          8/29/96              399,960
                             8/30/96               91,620
                             7/24/96              432,096                 823,678              0.205360534        0.2160XXXXX85

Laura Van Buren              8/29/96               20,020
                             8/30/96                6,108
                             7/24/96                9,108                  35,234              0.007834325          0.006243164

James B. Hoover              8/29/96               40,040
                             8/30/96               12,216
                             7/24/96                9,130                  61,386              0.013649256          0.014361585

Robert A. Miniccuci          8/29/96              350,020
                             8/30/96               51,080
                             7/24/98              318,367                 729,467              0.162197916          0.170662726

Anthony J. de Nicola         8/29/98              124,960
                             8/30/98               24,432
                             7/24/98               63,705                 213,097              0.047362388          0.049655189

Welsh Carson Anderson &
Stowe VI L.P.                8/29/96           49,999,950
                                                                       49,999,950              11.11755253          11.69775707

WCAS Capital Partners
II LP                        8/29/96            2,142,857
                                                  272,727               2,415,584              0.537108177           0.58568882

WCAS Capital Partners
II LP                        9/15/96            5,900,000
                                                                        5,900,000              1.31187251            1.360338715

Paul B. Qually               8/30/96               21,378
                             7/24/96              106,879                 128,257              0.028518107          0.030006415

                                  Page 1

<PAGE>

                                                                                                                    STOCK LEDGER
IRA FBO David F.
Ballett OLISC as
Custodian IRA
Rollover Account             8/30/96              122,160                 122,160              0.027162432          0.028579969

David F. Ballett             7/24/96               45,456                  45,456              0.010106677          0.010834482

Kristie M. Anderson          8/29/97               15,000
                                                                           15,000              0.003335269          0.003509331

Daniel B. Anderson           8/29/97               15,000
                                                                           15,000              0.003335269          0.003509331

Mark B. Anderson             8/29/97               15,000
                                                                           15,000              0.003335269          0.003509331

Lawrence Sorrel              7/24/96               90,908                  90,908              0.020213732          0.021266649
Priscilla Newman             7/24/96               16,162                  18,182              0.004042701          0.004253777
Rudolph Rupert               7/24/96               90,909                  90,909              0.020213732          0.021268649
D. Scott Mackesy             7/24/96               22,727                  22,727              0.008063377          0.005317104

M. Carol Smith               6/25/97               45,000                  45,000              0.010005807          0.010527992

Nathan J. Teburn             8/11/97               16,875                  16,875              0.003752176          0.003947997

Wayne E. Denton              12/6/97               33,750                  33,750              0.007504355          0.007895984

Ralph E. Spurgin              4/8/95              450,000                 450,000              0.100058073          0.105279919

Don J. Herron                7/29/96                1,250                   1,250              0.000277838          0.000292444

Kathleen S. Burgan           9/20/96               45,000                  45,000              0.010005807          0.010527992

The Laurel Canyon
Trust, Betty M.
Jones, Trustee               9/25/96               56,250                  56,250              0.012507259          0.01315000

Jay Looney                    4/1/99                2,500                   2,500              0.000555878          0.01315999

Patrick J. Sullivan          4/12/99               43,750                  43,750              0.009727968          0.010235548

Richard F. McMichael         5/17/99                2,500                   2,500              0.000555878          0.010235546

Treasury Shares                                                                 0                        0                    0

TOTAL ISSUED AND
OUTSTANDING SHARES                                                    427,431,940                                          100%

TOTAL UNISSUED
SHARES                                                                 22,588,080

TOTAL AUTHORIZED
SHARES 450,000,000                                                    450,000,000

STOCK WARRANTS AND
EMPLOYEE STOCK
OPTION PLAN:

JCP Telecom Systems,
Inc. Stock Warrants                             1,503,759
                                                                        1,503,759              0.334362728

ADSC Employee Stock                      Exercised & issued
Option Plan -                            shares (-45,000 -
6,270,000 +                              10,875 - 33,750 -
6,730,000 +                              450,000 - 1,250 -
6,500,000 =                              45,000 - 58,250 -
21,500,000 as of                         2,500 - 43,750 -              20,803,125              4.825801325
12/1/98                                  2,500)

TOTALLY FULLY
DILUTED SHARES                                                        449,738,824                      100%

REMAINING UNISSUED
UNALLOCATED
AUTHORIZED SHARES                                                         261,176

TOTAL AUTHORIZED
SHARES 450,000,000                                                    450,000,000

                                                                      450,000,000

</TABLE>

                                  Page 2
<PAGE>

                                 SCHEDULE 204(b)

All subsidiaries are 100% owned by Alliance Data Systems Corporation. All
shares of the U.S. subsidiaries and 65% of the shares of non U.S. subsidiaries
have been pledged as collateral pursuant to the credit agreement with J. P.
Morgan dated July 24, 1998.

<TABLE>
<CAPTION>
                                                                                    TOTAL ISSUED AND
                                        TOTAL AUTHORIZED                            OUTSTANDING SHARES         ALL SHARES
SUBSIDIARY                              CAPITAL STOCK         PAR VALUE             OF CAPITAL STOCK           OWNED BY
----------                              ----------------      ---------             ------------------         ----------
<S>                                     <C>                   <C>                  <C>                         <C>
ADS Alliance Data Systems, Inc.                 1,000           $  1.00               10 shares                ADSC

World Financial Network National Bank       1,000,000           $100.00            175,000 shares              ADSC

Harmonic Systems Incorporated                   1,000           $   .01               100 shares               ADSC

Harmonic Technology Licensing, Inc.            50,000           $   .01              1,000 shares              Harmonics
                                                                                                               Systems
                                                                                                               Incorporated

Loyalty Management Group, Inc.              unlimited            No par              1,000 shares              ADSC

LMG Travel Services Ltd.                    unlimited            No par                 1 share                Loyalty
                                                                                                               Management
                                                                                                               Group, Inc.

Alliance Data Systems
  (New Zealand) Limited                       402,325           $  1.00          402,325 ordinary shares       ADSC
                                            4,827,900           $  1.00        4,827,900 preference shares     ADSC

ADS Reinsurance Ltd.                          120,000           $  1.00              120,000 shares            ADSC
</TABLE>

<PAGE>

                                SCHEDULE 2.04(c)

21,500,000   shares have been allocated to the Alliance Data Systems Employee
             Stock Option Plan

   696,875   shares have been issued pursuant to the Alliance Data Systems
             Employee Stock Option Plan

Options are issued and outstanding to acquire 20,386,375 shares under the
             Alliance Data Systems Employee Stock Option Plan

Right To Participate In Co Sale Agreement between Welsh Carson Anderson &
Stowe VII, L.P., WCAS Capital Partners II, L.P., and JCP Telecom Systems, Inc.
dated January 24, 1996

Stock Purchase Warrant to Purchase Common Stock of World Financial Network
Holding Corporation issued to JCP Telecom Systems, Inc. dated August 30, 1996
(1,503,759 shares reserved for issuance)

Stockholders Agreement dated as of January 31, 1996 among World Financial
Network Holding Corporation, Limited Commerce Corp., Welsh, Carson, Anderson &
Stowe VII, L.P. and the several investors named in Annex I hereto

Amended and Restated Stockholders Agreement dated as of August 30, 1996 among
World Financial Network Holding Corporation, Limited Commerce Corp., Welsh,
Carson, Anderson & Stowe VII, L.P. and the several other WCAS Investors named in
Annex I hereto, as amended in the Amendment to Amended and Restated Stockholders
Agreement dated July 24, 1998 and the Amendment to Amended and Restated
Stockholders Agreement dated as of August 31, 1998

<PAGE>

                                SCHEDULE 2.05(b)

                       MATERIAL OBLIGATIONS OR LIABILITIES

None

<PAGE>

                                    EXHIBIT B

                    FORM OF STOCKHOLDERS AGREEMENT AMENDMENT

See Tab 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]