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Exhibit 10.11  

 
 

FIRST AMENDMENT    
  

        FIRST AMENDMENT (this "Amendment"), dated as of July 6, 1999, among Alliance Data Systems Corporation (the "US Borrower"), Loyalty Management Group Canada
below (each a "Bank" and collectively, the "Banks") and Morgan Guaranty Trust Company of New York as Administrative Agent (the "Administrative Agent"). All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings provided such terms in the Credit Agreement. 

WITNESSETH  

        WHEREAS, the Borrower, the Canadian Borrower, the Guarantors from time to time party thereto, the Banks and the Administrative Agent are party to a Credit
Agreement dated as of July 24, 1998 and amended and restated as of October 22, 1998 (as amended, modified and supplemented prior to the date hereof, the "Credit Agreement"); 

        WHEREAS,
the US Borrower has requested that the undersigned Banks provide the amendment provided for herein and the banks have agreed to provide such amendment on the terms and
conditions set forth herein; 

        NOW,
THEREFORE, it is agreed: 

        1.    Section 1.1
of the Credit Agreement is hereby amendment by inserting the following new definitions in their appropriate alphabetical positions: 

        "First
Amendment" shall mean the First Amendment to this Agreement, dated as of July 6, 1999. 

        "New
Preferred Stock" shall mean the Cumulative Convertible Redeemable Preferred Stock issued by the US borrower on terms and conditions substantially as set forth in Exhibit A to
the First Amendment and otherwise reasonably satisfactory to the Administrative Agent and the Required Banks. 

        2.    Section 2.11(A)(g)
of the Credit Agreement is hereby amended by inserting the following phrase after the phrase "Equity Issuance" appearing in the second
parenthetical thereof: 

        "and
the New Preferred Stock, so long as the cash proceeds of such issuances of New Preferred Stock are applied to find one or more acquisitions previously identified to the
Administrative Agent and the Banks" 

        3.    Section 6.21(a)
of the Credit Agreement is hereby amended by deleting it in its entirety and inserting the following new clause (a) in lieu thereof: 

        "(a) The
US Borrower will not, and will not permit any of its Subsidiaries to issue (i) any preferred stock (other than the New Preferred Stock) or (ii) any common
stock redeemable at the option of the holder thereof." 

        4.    In
order to induce the undersigned Banks to enter into this Amendment, each of the US Borrower and the Canadian Borrower hereby represents and warrants that (i) no
Default or Event of Default exists as of the Amendment Effective Date (as defined below) after giving effect to this Amendment and (ii) on the Amendment Effective Date, both before and after
giving effect to this Amendment, all representations and warranties (other than those representations made as of a specified date) contained in the Credit Agreement and in the other Credit Documents
are true and correct in all material respects. 

        5.    This
Amendment shall become effective on the date (the "Amendment Effective Date") when the Required Banks, the US Borrower and the Canadian Borrower shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Administrative Agent at its Domestic Lending
Office (as specified on its signature page to the Credit Agreement). 

 

        6.    This
Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit
Agreement. 

        7.    This
Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and
delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Administrative Agent. 

        8.    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.

***  

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IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of the Amendment to be duly executed and delivered as of the date hereof. 

	 	 	ALLIANCE DATA SYSTEMS CORPORATION
	

 	
 	

By:	
 	

/s/  ROBERT P. ARMIAK      

	 	 	 	 	Name:	 	Robert P. Armiak, CCM
	 	 	 	 	Title:	 	Vice President, Treasurer
	

 	
 	
LOYALTY MANAGEMENT GROUP CANADA, INC.
	

 	
 	

By:	
 	

/s/  ROBERT P. ARMIAK      

	 	 	 	 	Name:	 	Robert P. Armiak, CCM
	 	 	 	 	Title:	 	Vice President, Treasurer
	

 	
 	
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
	

 	
 	

By:	
 	

/s/

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	
ARCHIMEDES FUNDING II, LTD.
	

 	
 	

By:	
 	

ING Capital Advisors LLC as Collateral Manager
	

 	
 	

By:	
 	

/s/  MICHAEL J. CAMPBELL      

	 	 	 	 	Name:	 	Michael J. Campbell
	 	 	 	 	Title:	 	SENIOR VICE PRESIDENT & PORTFOLIO MANAGER
	

 	
 	
FIRST UNION NATIONAL BANK
	

 	
 	

By:	
 	

/s/  THOMAS M. HARPER      

	 	 	 	 	Name:	 	Thomas M. Harper
	 	 	 	 	Title:	 	Vice President

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KZH ING-2 LLC
	

 	
 	

By:	
 	

/s/  PETER CHIN      

	 	 	 	 	Name:	 	Peter Chin
	 	 	 	 	Title:	 	Authorized Agent
	

 	
 	
KZH ING-3 LLC
	

 	
 	

By:	
 	

/s/  PETER CHIN      

	 	 	 	 	Name:	 	Peter Chin
	 	 	 	 	Title:	 	Authorized Agent
	

 	
 	
UNION BANK OF CALIFORNIA, N.A.
	

 	
 	

By:	
 	

/s/  ROBERT C. NAGEL      

	 	 	 	 	Name:	 	Robert C. Nagel
	 	 	 	 	Title:	 	Vice President
	

 	
 	
THE FIRST NATIONAL BANK OF CHICAGO
	

 	
 	

By:	
 	

/s/  WILLIAM A. ARTZ      

	 	 	 	 	Name:	 	William A. Artz
	 	 	 	 	Title:	 	Vice President
	

 	
 	
VAN KAMPEN PRIME RATE INCOME TRUST
	

 	
 	

By:	
 	

/s/

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	
HARRIS TRUST AND SAVINGS BANK
	 	 	By:	 	/s/  PETER KRAWCHUK      

	 	 	 	 	Name:	 	Peter Krawchuk
	 	 	 	 	Title:	 	Vice President

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BANK OF MONTREAL
	

 	
 	

By:	
 	

/s/  AMY K. DUMSER      

	 	 	 	 	Name:	 	Amy K. Dumser
	 	 	 	 	Title:	 	Director
	

 	
 	
THE HUNTINGTON NATIONAL BANK
	

 	
 	

By:	
 	

/s/  R. BRADLEY SMITH      

	 	 	 	 	Name:	 	R. Bradley Smith
	 	 	 	 	Title:	 	Vice President
	

 	
 	
PILGRIM PRIME RATE TRUST
	

 	
 	

By:	
 	

Pilgrim Investments, Inc.

as its investment manager
	

 	
 	

By:	
 	

/s/  MICHELE PRINCE      

	 	 	 	 	Name:	 	Michele Prince, CFA
	 	 	 	 	Title:	 	Vice President
	

 	
 	
PILGRIM AMERICA HIGH INCOME

INVESTMENTS LTD. (as assignee)
	

 	
 	

By:	
 	

Pilgrim Investments, Inc.

as its investment manager
	

 	
 	

By:	
 	

/s/  MICHELE PRINCE      

	 	 	 	 	Name:	 	Michele Prince, CFA
	 	 	 	 	Title:	 	Vice President

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EXHIBIT 10.12  

  
 

    FORM OF 2001 TERM PROMISSORY NOTE    
  

	$[Amount]	 	[Date]

        FOR VALUE RECEIVED, the undersigned,                   , (the "Borrower"), hereby promises to pay to the order
of ADS Alliance Data Systems, Inc. (the "Lender"), on or before February 28, 2006 (the "Maturity Date"), the principal sum of
                             (the "Debt"), together with interest, all as provided in Section 1 of
this Note. [The Debt cannot exceed 50% of the value of the pledged
collateral.] 

        Section 1. The Debt.    Subject to and on the terms and conditions set forth in this Note, the Borrower shall repay the
Debt as follows: 

        1.1.  Principal. The Borrower shall pay the principal balance of this Note to the Lender on the Maturity Date. 

        1.2.  Interest. 

        1.2.1.    The
Debt shall accrue interest on the outstanding principal amount, for each day from the date such Debt is made until the Maturity Date, at a rate equal to 4.96%.
Interest will be charged at the end of each month based on one twelfth (1/12) of the annual interest rate times the account balance at the end of the month (after accounting for any
repayments made during the month). 

        1.2.2.    Whenever
the unpaid balance (accounting for any repayments made) of the Debt has become due and payable, whether at the stated maturity thereof, by acceleration or
otherwise, the unpaid balance will accrue additional interest at a rate equal to the rate set forth in Section 1.2.1 plus two hundred (200) basis points until the
balance is paid in full.

        1.2.3.    All
interest under this Note shall be computed on the basis of the actual days elapsed in a year of 360 days. 

        1.3.  Prepayments; Payments. 

        1.3.1.    The
Borrower shall have the right to make prepayments at any time of the unpaid balance without notice, premium or penalty. 

        1.3.2.    The
Borrower shall make all payments of principal and interest under this Note to the Lender at its main office (or such other location as the Lender may direct) in
immediately available funds. If any payment of principal or interest on this Note shall become due on a day other than a Banking Day, such payment shall be due and payable upon the next succeeding
Banking Day and such extension of time shall in such case be included in computing interest in connection with such payment. A "Banking Day" is any day on which the main office of the Lender is open
for business. 

        Section 2. Events of Default.    The following are Events of Defaults: 

        2.1.  The
Borrower fails to make a payment of interest on the Note when and as due. 

        2.2.  The
Borrower fails to pay the principal of the Note when and as due. 

        2.3.  The
Borrower: 

        2.3.1.    makes
an assignment for the benefit of creditors; 

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        2.3.2.    enters
into any composition, compromise or arrangement with his or its creditors; 

        2.3.3.    generally
does not pay his or its debts as such debts become due; or 

        2.3.4.    conceals,
removes, or permits to be concealed or removed, any part of his or its property, with intent to hinder, delay or defraud his or its creditors or any of
them, or makes or suffers a transfer of any of its property, fraudulent under the provisions of any bankruptcy, fraudulent conveyance or similar law, or makes or suffers a transfer of his or its
property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid. 

        2.4.  If: 

        2.4.1.    a
trustee, receiver, agent or custodian is appointed or authorized to take charge of any property of the Borrower for the purpose of enforcing a lien against such
property or for the purpose of administering such property for the benefit of the Borrower's creditors; or 

        2.4.2.    an
order (a) for relief against the Borrower is granted under Title 11 of the United States Code or any similar law, (b) appointing a receiver, trustee,
agent or custodian of the Borrower or any property of the Borrower or (c) providing for a composition, compromise or arrangement with the creditors of the Borrower, is entered by any court or
governmental body or officer; or 

        2.4.3.    the
Borrower files any pleading seeking (whether by formal action or by the admission of the material allegations of a pleading or otherwise) any such appointment or
order; or 

        2.4.4.    (a)
any action or proceeding seeking any such appointment or order is commenced without the authority or consent of the Borrower and (b)(i) such action or
proceeding is not dismissed within 30 days after its commencement or (ii) the Borrower does not diligently contest such action or proceeding. 

        2.5.  The
Borrower dies. 

        2.6.  The
Borrower resigns or the Borrower's employment is terminated from the Company and its affiliates. 

        Section 3. Default Remedies.    

        3.1.  Acceleration. If an Event of Default exists, the outstanding unpaid principal balance of this Note, together with all
interest accrued thereon and any unpaid fees, expenses or other amounts due to the Lender under this Note (the "Default Amount"), is immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby waived; provided, that if an Event of Default under Section 2.6 occurs, payment of the Default
Amount may be delayed, upon written approval of the Lender, if the Borrower is restricted from selling any or all of the Collateral, as defined in the Pledge Agreement between the Lender and Borrower,
dated as of                   , 2001 (as such may be amended from time to time, the "Pledge Agreement"), due to operation of any law, rule or regulation
(a "Legal
Restriction"). The Borrower shall repay the Default Amount, with accumulated interest pursuant to Section 1.2.2, within 30 days after any Legal Restriction is removed. 

        3.2.  Remedies Cumulative. The Lender may exercise the remedies provided in the Security Documents upon the occurrence of an
Event of Default. No right or remedy conferred upon the Lender by this Note or legally available to the Lender if an Event of Default exists is intended to be exclusive of any other right or remedy,
and each such right or remedy is cumulative and in addition to every other such right or remedy. 

        Section 4. Miscellaneous.    

        4.1.  Modifications and Waivers. No modification or waiver of any term or provision contained in this Note and no consent to
any departure by the Borrower therefrom shall in any event be effective 

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unless the same is in writing and signed by the waiving party. Such waiver or consent shall be effective only in the specific instance and for the purpose for which it is given. 

        4.2.  Expenses. All fees, costs and expenses, including reasonable fees and expenses of outside legal counsel, incurred by the
Lender in connection with the enforcement of this Note or any other instruments, documents, or agreements to be delivered pursuant hereto or in connection herewith, shall be paid by the Borrower to
the Lender on demand. 

        4.3.  Governing Law. This Note shall be governed and construed by the provisions hereof and in accordance with the laws of the
State of Ohio applicable to instruments to be performed in the State of Ohio. 

        This
Note was executed in        as of the date first written above. 

	 	 	
 Name:

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Schedule of 2001 Term Promissory Notes    
  

        In the first quarter of 2001, the following officers issued promissory notes to ADS Alliance Data Systems, Inc., in a form substantially similar to the
foregoing form, with the following balances: 

	Name
 
	 	Principal Amount

	J. Michael Parks	 	$	150,000.00
	Dwayne Tucker	 	$	45,500.00
	Michael A. Beltz	 	$	45,500.00
	Edward J. Heffernan	 	$	45,500.00
	Ivan Szeftel	 	$	31,843.23

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FORM OF 2001 TERM PROMISSORY NOTE

Schedule of 2001 Term Promissory Notes

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