Document:

Form of Convertible Note Hedge Confirmation

 Exhibit 10.2 
 EXECUTION VERSION 
  

					
		  	May 27, 2009	  	
			
	To:	  	Alliance Data Systems Corporation	  	
		  	17655 Waterview Parkway	  	
		  	Dallas, TX 75252	  	

					
		  	 Attn:
	  	Chief Financial Officer
		  	 Telephone:
	  	(972) 348-5100
		  	 Facsimile:
	  	(972) 348-5326

					
			
	From:	  	[Dealer]	  	
		  	[Address]	  	

					
		  	 Attn:
	  	[                    ]
		  	 Telephone:
	  	 [                    ]

		  	 Facsimile:
	  	 [                    ]

		
	 Re:
	  	 Convertible Bond Hedge Transaction

		  	(Transaction Reference Number:                    )

 Ladies and Gentlemen: 
 The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the
“Transaction”) between [Dealer] (“Dealer”) and Alliance Data Systems Corporation (“Counterparty”). This communication constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below. 
 1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA
Definitions (the “2006 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2006 Definitions, the
“Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity
Definitions will govern. Certain defined terms used herein have the meanings assigned to them in the Indenture to be dated as of June 2, 2009 between Counterparty and The Bank of New York Mellon Trust Company, National Association, as trustee
(the “Indenture”), relating to the USD300,000,000 principal amount of 4.75% convertible senior notes due 2014 (the “Convertible Securities”). In the event of any inconsistency between the terms defined in the
Indenture and this Confirmation, this Confirmation shall govern. For the avoidance of doubt, references herein to sections of the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of
this Confirmation. If any relevant sections of the Indenture are changed, added or renumbered following execution of this Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve
the economic intent of the parties. The parties further acknowledge that references to the Indenture herein are references to the Indenture as in effect on the date of its execution, and if the Indenture is amended, modified or supplemented
following its execution, any such amendment, modification or supplement will be disregarded for purposes of this Confirmation (other than for purposes of Section 8(a)(i) below) unless the parties agree otherwise in writing. 
 This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this
Confirmation relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement (the “ISDA Form”) as if Dealer and Counterparty had executed an agreement in
such form (without any Schedule but with the elections set forth in this Confirmation) on the Trade Date. For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement. 
 All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the
event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern. 

 2. The Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The
terms of the particular Transaction to which this Confirmation relates are as follows: 
 General Terms: 
  

					
		 	 Trade Date:
	  	May 27, 2009
			
		 	 Effective Date:
	  	The closing date for the initial issuance of the Convertible Securities.
			
		 	 Option Type:
	  	Call
			
		 	 Seller:
	  	Dealer
			
		 	 Buyer:
	  	Counterparty
			
		 	 Shares:
	  	The common stock of Counterparty, par value USD0.01 per share (Exchange Symbol: “ADS”).
			
		 	 Number of Options:
	  	The number of Convertible Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Securities. For the
avoidance of doubt, the Number of Options shall not be increased as a result of the exercise by Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Barclays Capital Inc., as representatives of the Initial
Purchasers (as defined in the Purchase Agreement), of their option pursuant to Section 2(c) of the Purchase Agreement dated as of May 27, 2009 among Counterparty and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc.
and Barclays Capital Inc., as representatives of the Initial Purchasers party thereto (the “Purchase Agreement”).
			
		 	 Number of Shares:
	  	As of any date, the product of the Number of Options, the Conversion Rate and the Applicable Percentage.
			
		 	 Conversion Rate:
	  	As of any date, the “Conversion Rate” (as defined in the Indenture) as of such date, but without regard to any adjustments to the “Conversion Rate” pursuant to Sections
15.03 or 15.04(i) of the Indenture.
			
		 	 Applicable Percentage:
	  	[    ]%1
			
		 	 Premium:
	  	USD[            ]2 (Premium
per Option USD[            ]3 ).
			
		 	 Premium Payment Date:
	  	The Effective Date.
			
		 	 Exchange:
	  	New York Stock Exchange
			
		 	 Related Exchange:
	  	All Exchanges
		
	Procedures for Exercise:	  	
			
		 	 Potential Exercise Dates:
	  	Each Conversion Date.
			
		 	 Conversion Date:
	  	Each “Conversion Date”, as defined in the Indenture, occurring

  

	 1
	 For Bank of America, N.A. (“BofA”), insert 50%. For each of Barclays Bank PLC
(“Barclays”) and JPMorgan Chase Bank, National Association, London Branch (“JPM”), insert 25%. 

	 2
	 For BofA, insert 35,115,000. For each of Barclays and JPM, insert 17,557,500.
 

	 3
	 For BofA, insert 117.05. For each of Barclays and JPM, insert 58.5250.

  

 2 

					
		 		  	during the period from and excluding the Trade Date to and including the Expiration Date, for Convertible Securities, each in denominations of USD1,000 principal amount, that are submitted
and meet the requirements for conversion on such Conversion Date in accordance with the terms of the Indenture (excluding Convertible Securities submitted on such date with respect to which Counterparty makes an “Exchange in Lieu of
Conversion” election (an “Exchange Election”) pursuant to Section 15.11 of the Indenture (“Excluded Convertible Securities”)) (such Convertible Securities, other than Excluded Convertible Securities, the
“Relevant Convertible Securities” for such Conversion Date). For the avoidance of doubt, Counterparty will not provide Dealer with a Notice of Exercise with respect to any Excluded Convertible Securities for what would otherwise be
the corresponding Conversion Date, and such Excluded Convertible Securities may subsequently trigger the exercise of Options hereunder if such Excluded Convertible Securities are resubmitted and meet the requirements for conversion in accordance
with the terms of the Indenture (and are not subject to a subsequent Exchange Election).
			
		 		  	If the financial institution designated in connection with any Exchange Election does not accept any Excluded Convertible Securities for exchange or does not timely deliver the related
conversion consideration for any accepted securities (a “Failed Exchange Election”), Counterparty will promptly provide Dealer with notice of such Failed Exchange Election, which notice shall specify the number of Options
corresponding to such Excluded Convertible Securities, and such Failed Exchange Election shall be an Additional Termination Event as to which the portion of the Transaction described below shall be the sole Affected Transaction, Counterparty shall
be the sole Affected Party, and Dealer will promptly designate an Early Termination Date pursuant to Section 6(b) of the Agreement with respect to the number of Options corresponding to such Excluded Convertible Securities; provided that the
Early Termination Amount with respect to such number of Options shall be capped so that it does not exceed the value of the Delivery Obligation that Dealer would have been required to deliver hereunder if such Options had been
exercised.
			
		 	Required Exercise on Conversion Dates:	  	On each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations of USD1,000 principal amount shall be
automatically exercised.
			
		 	Expiration Date:	  	The second “Scheduled Trading Day” immediately preceding the “Maturity Date” (each as defined in the Indenture).
			
		 	Automatic Exercise:	  	As provided above under “Required Exercise on Conversion Dates”.
			
		 	Notice Deadline:	  	In respect of any exercise of Options hereunder on any Conversion Date, the Exchange Business Day prior to the first “Scheduled Trading Day” (as defined in the Indenture) of the
“Cash Settlement Averaging Period” (as defined in the Indenture and, for the avoidance of doubt, irrespective of whether Counterparty’s election of the settlement method with respect to the Relevant

  

 3 

					
		 		  	Convertible Securities includes any portion thereof to be delivered in cash) relating to the Convertible Securities converted on the Conversion Date occurring on the relevant Exercise Date;
provided that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant Convertible Securities on any Conversion Date occurring during the period beginning on, and including, January 13, 2014 and
ending on, and including, the second “Scheduled Trading Day” immediately preceding the “Maturity Date” (each as defined in the Indenture) (the “Final Conversion Period”), the Notice Deadline shall be the Exchange
Business Day immediately following such Conversion Date.
			
		 	Notice of Exercise:	  	Notwithstanding anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of any exercise of Options hereunder unless
Counterparty notifies Dealer in writing prior to 5:00 P.M., New York City time, on the Notice Deadline in respect of such exercise of (i) the number of Options being exercised on such Exercise Date, (ii) the scheduled settlement date under the
Indenture for the Convertible Securities converted on the Conversion Date corresponding to such Exercise Date, (iii) whether such Relevant Convertible Securities will be settled by Counterparty by delivery of cash, Shares or a combination of cash
and Shares and, if such a combination, the “Specified Dollar Amount” (as defined in the Indenture) and (iv) the first “Scheduled Trading Day” of the “Cash Settlement Averaging Period” (each as defined in the Indenture);
provided that in the case of any exercise of Options hereunder in connection with the conversion of any Relevant Convertible Securities on any Conversion Date occurring during the Final Conversion Period, the contents of such notice shall be
as set forth in clause (i) above. Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in
respect of any election of a settlement method with respect to the Convertible Securities.
			
		 		  	For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in
respect of such exercise shall be permanently extinguished, and late notice shall not cure such failure; provided that notwithstanding the foregoing, such notice (and the related exercise of Options) shall be effective if given after the
Notice Deadline, but prior to (x) in the case of the Final Conversion Period, 5:00 P.M. New York City time, on the Scheduled Trading Day immediately preceding the relevant Settlement Date and (y) in all other cases, 5:00 P.M. New York City time, on
the fifth Exchange Business Day following the Notice Deadline, in which event, except in the case of the Final Conversion Period, the Calculation Agent shall have the right to adjust the Delivery Obligation as appropriate to reflect the additional
costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer not having received such
notice on or prior to the Notice Deadline.

  

 4 

					
		 	Notice of Specified Dollar Amount for Conversions during the Free Convertibility Period:	  	Counterparty shall notify Dealer in writing before 5:00 P.M. (New York City time) on the “Scheduled Trading Day” immediately prior to January 13, 2014 of the election by the
Counterparty, in accordance with Section 15.02(b)(iii) of the Indenture, of the settlement method and, if applicable, the “Specified Dollar Amount” (each as defined in the Indenture) applicable to the Relevant Convertible Securities with a
Conversion Date occurring on or after January 13, 2014 and ending on, and including, the second “Scheduled Trading Day” immediately preceding the “Maturity Date” (each as defined in the Indenture) (the “Free
Convertibility Period”). If Counterparty fails timely to provide such notice, Counterparty shall be deemed to have notified Dealer of a “Specified Dollar Amount” (as defined in the Indenture) of USD1,000 for all conversions
occurring during the Free Convertibility Period. Counterparty agrees that it shall settle any Relevant Convertible Securities with a Conversion Date occurring during the Free Convertibility Period in the same manner as provided in the Notice of
Specified Dollar Amount for Conversions during the Free Convertibility Period it provides or is deemed to have provided hereunder.
			
		 	Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice:	  	To be provided by Dealer.
		
	 Settlement Terms:
	  	
			
		 	Settlement Date:	  	In respect of an Exercise Date occurring on a Conversion Date, the settlement date for the cash and Shares (if any) to be delivered in respect of the Relevant Convertible Securities converted
on such Conversion Date pursuant to Section 15.01(a) of the Indenture; provided that the Settlement Date will not be prior to the latest of (i) the date that is one Settlement Cycle following the final day of the relevant Cash Settlement
Averaging Period (as modified by the provision set forth opposite the caption “Convertible Security Settlement Method”), (ii) the Exchange Business Day immediately following the date on which Counterparty gives notice to Dealer of such
Settlement Date prior to 5:00 P.M., New York City time and (iii) the Exchange Business Day immediately following the date Counterparty provides the Notice of Delivery Obligation prior to 5:00 P.M., New York City time.
			
		 	Delivery Obligation:	  	In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an Exercise Date occurring on a
Conversion Date, Dealer will deliver to Counterparty, on the related Settlement Date, a number of Shares and/or amount of cash in USD equal to the product of (i) the Applicable Percentage and (ii) the aggregate number of Shares that Counterparty
would be obligated to deliver to the holder(s) of the Relevant Convertible Securities converted on such Conversion Date pursuant to Section 15.02(b) of the Indenture and/or the aggregate amount of cash, if any, in excess of USD1,000 per Convertible
Security (in denominations of USD1,000) that Counterparty would be obligated to deliver to holder(s) pursuant to Section 15.02(b) of the Indenture and cash in lieu of fractional Shares, if any, as if Counterparty had elected to

  

 5 

					
		 		  	satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Convertible Security Settlement Method, notwithstanding any different actual election by
Counterparty with respect to the settlement of such Relevant Convertible Securities (the “Convertible Obligation”); provided that such obligation shall be determined excluding any Shares and/or cash that Counterparty is
obligated to deliver to holder(s) of the Relevant Convertible Securities as a result of any adjustments to the Conversion Rate pursuant to Sections 15.03 or 15.04(i) of the Indenture; and provided further that if such exercise relates to the
conversion of Relevant Convertible Securities in connection with which holders thereof are entitled to receive additional Shares and/or cash pursuant to the adjustments to the Conversion Rate set forth in Section 15.03 of the Indenture, then,
notwithstanding the foregoing, the Delivery Obligation shall include the Applicable Percentage of such additional Shares and/or cash, except that the Delivery Obligation shall be capped so that the value of the Delivery Obligation per Option (with
the value of any Shares included in the Delivery Obligation determined by the Calculation Agent using the VWAP Price on the last day of the relevant Cash Settlement Averaging Period (as modified by the provision set forth opposite the caption
“Convertible Security Settlement Method”)) does not exceed the amount as determined by the Calculation Agent that would be payable by Dealer pursuant to Section 6 of the Agreement if such Conversion Date were an Early Termination Date
resulting from an Additional Termination Event with respect to which the Transaction (except that, for purposes of determining such amount (x) the Number of Options shall be deemed to be equal to the number of Options exercised on such Exercise Date
and (y) such amount payable will be determined as if Section 15.03 of the Indenture were deleted) was the sole Affected Transaction and Counterparty was the sole Affected Party (determined without regard to Section 8(b) of this Confirmation).
Notwithstanding the foregoing, and in addition to the cap described in the further proviso to the preceding sentence, in all events the Delivery Obligation shall be capped so that the value of the Delivery Obligation does not exceed the Applicable
Percentage of the value of the Convertible Obligation (with the Convertible Obligation determined based on the actual settlement method elected by Counterparty with respect to such Relevant Convertible Securities instead of the Convertible Security
Settlement Method and with the value of any Shares included in either the Delivery Obligation or such Convertible Obligation determined by the Calculation Agent using the VWAP Price on the last day of the relevant Cash Settlement Averaging Period
(as modified by the provision set forth opposite the caption “Convertible Security Settlement Method”)).
			
		 	Convertible Security Settlement Method:	  	For any Relevant Convertible Securities, if Counterparty has notified Dealer in the related Notice of Exercise (or in the Notice of Specified Dollar Amount for Conversions during the Free
Convertibility Period, as the case may be) that it has elected (or been deemed to have elected) to satisfy its conversion obligation in respect of such Relevant Convertible Securities in cash or in a combination of cash and Shares in accordance with
Section 15.02(b)(iii) of the Indenture (a “Cash Election”) with a

  

 6 

					
		 		  	“Specified Dollar Amount” (as defined in the Indenture) of at least USD1,000, the Convertible Security Settlement Method shall be the settlement method actually so elected by
Counterparty (or been deemed to have elected) in respect of such Relevant Convertible Securities; otherwise, the Convertible Security Settlement Method shall (i) assume Counterparty had made a Cash Election with respect to such Relevant Convertible
Securities with a “Specified Dollar Amount” (as defined in the Indenture) of USD1,000 per Relevant Convertible Security and (ii) be calculated as if the relevant “Cash Settlement Averaging Period” (as defined in the Indenture)
consisted of 80 “Trading Days” commencing on (x) the third “Scheduled Trading Day” (each as defined in the Indenture) after the Conversion Date for conversions occurring prior to the Free Convertibility Period or (y) the 82
“Scheduled Trading Day” prior to the “Maturity Date” (each as defined in the Indenture) for conversions occurring during the Free Convertibility Period.
			
		 	Notice of Delivery Obligation:	  	No later than the second Exchange Business Day immediately following the last day of the relevant Cash Settlement Averaging Period (as modified by the provision set forth opposite the caption
“Convertible Security Settlement Method”), Counterparty shall give Dealer notice of the final number of Shares and/or cash comprising the Convertible Obligation; provided that, with respect to any Exercise Date occurring during the
Final Conversion Period, Counterparty may provide Dealer with a single notice of an aggregate number of Shares and/or cash comprising the Convertible Obligations for all Exercise Dates occurring in such period (it being understood, for the avoidance
of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise or Notice of Specified Dollar Amount for Conversions during the Free Convertibility Period or
Dealer’s obligations with respect to Delivery Obligation, each as set forth above, in any way).
			
		 	Other Applicable Provisions:	  	To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11
of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer
of the Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction.
			
		 	Restricted Certificated Shares:	  	Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in
lieu of delivery through the Clearance System. Section 9.11 of the Equity Definitions shall be amended by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws
arising as a result of the fact that Counterparty is the Issuer of the Shares.
		
	Share Adjustments:	  	
			
		 	Method of Adjustment:	  	Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Sections 15.04(a)-(e) of the Indenture, the Calculation Agent shall make a

  

 7 

					
		 		  	corresponding adjustment to any variable relevant to the exercise, settlement, payment or other terms of the Transaction to the extent an analogous adjustment is made under the Indenture.
Promptly following the calculation of any adjustment to the Conversion Rate pursuant to the terms of the Indenture, Counterparty shall notify the Calculation Agent in writing of the details of such adjustment.
		
	Extraordinary Events:	  	
			
		 	Merger Events:	  	Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 15.06 of the
Indenture.
			
		 	Consequences of Merger Events:	  	Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make the corresponding adjustment in respect of any
adjustment under the Indenture to any one or more of the nature of the Shares, the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement, payment or other terms of the Transaction; provided that
such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to Sections 15.03 or 15.04(i) of the Indenture; and provided further that if, with respect to a Merger Event, the consideration for the Shares
includes (or, at the option of a holder of Shares, may include) shares (or depositary receipts with respect to shares) of an entity or person not organized under the laws of the United States, any State thereof or the District of Columbia, and the
Calculation Agent determines that (x) treating such shares or depositary receipts as “Reference Property” (as such term is defined in the Indenture) will have a material adverse effect on Dealer’s rights or obligations in respect of
the Transaction, on its Hedging Activities in respect of the Transaction or on the costs (including, without limitation, due to any increase in tax liability, decrease in tax benefit or other adverse effect on its tax position) of engaging in any of
the foregoing and (y) Dealer cannot promptly avoid the occurrence of each such material adverse effect by (I) transferring or assigning its rights and obligations under this Confirmation and the Agreement pursuant to Section 8(f) to an affiliate of
Dealer that regularly engages in transactions similar to the Transaction or (II) amending the terms of this Confirmation (whether because amendments would not avoid such occurrence or because Counterparty fails to agree promptly to such amendments),
then Cancellation and Payment (Calculation Agent Determination) shall apply.
			
		 	Notice of Merger Consideration:	  	Upon the occurrence of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of
stockholder election), Counterparty shall reasonably promptly (but, in any event on or prior to the relevant merger date) notify the Calculation Agent of (i) the weighted average of the types and amounts of consideration to be received by the
holders of Shares entitled to receive cash, securities or other property or assets with respect to or in exchange for such Shares in any Merger Event who affirmatively make such an election and (ii) the details of the adjustment to be made under the
Indenture in respect of such Merger Event.

  

 8 

									
			
		 	Nationalization, Insolvency or Delisting:	  	Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a
Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global
Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.
			
		 	Additional Disruption Events:	  	
					
		 		 	(a)	  	Change in Law:	  	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions shall be amended by (i) deleting the word “or” after the parenthetical “(including, without
limitation, any tax law)” in clause (A) thereof, (ii) inserting after the parenthetical in clause (B) thereof the following words “or (C) due to a law or regulation or interpretation becoming applicable as a result of Counterparty’s
or one or more of its subsidiaries entering a new business or changing the jurisdiction of organization of Counterparty or one or more of its subsidiaries or as a result of any other action taken by Counterparty or one or more of its
subsidiaries”, (iii) deleting the word “or” before “(Y)” in the seventh line thereof and (iv) inserting after the parenthetical in clause (Y) the following words “or (Z) in the case of a Change in Law described in
clause (C), there will be a not insignificant adverse effect on Dealer or any of its affiliates in respect of such Transaction or any related transactions”; and provided further that to the extent any increased cost described in clause (Y) of
Section 12.9(a)(ii) of the Equity Definitions is of a type also described in Section 12.9(a)(vi) of the Equity Definitions, then the consequences provided with respect to “Increased Cost of Hedging” in Section 12.9(b)(vi) of the Equity
Definitions shall apply.
					
		 		 	(b)	  	Failure to Deliver:	  	Applicable
					
		 		 	(c)	  	Insolvency Filing:	  	Applicable
					
		 		 	(d)	  	Hedging Disruption:	  	Not Applicable
					
		 		 	(e)	  	Increased Cost of Hedging:	  	Not Applicable
			
		 	Hedging Party:	  	For all applicable Additional Disruption Events, Dealer
			
		 	Determining Party:	  	For all applicable Additional Disruption Events, Dealer
			
		 	Non-Reliance:	  	Applicable
			
		 	Agreements and Acknowledgments Regarding Hedging Activities:	  	Applicable
			
		 	Additional Acknowledgments:	  	Applicable

  

 9 

																	
		 	 3. Calculation Agent:
	  	 Dealer. Following any determination or calculation by the Calculation Agent hereunder, the Calculation Agent will use its reasonable best
efforts to provide to Counterparty by e-mail promptly following such determination or calculation (but in any event no later than three Scheduled Trading Days after any request by Counterparty) a report (in a commonly used file format for the
storage and manipulation of financial data without disclosing Dealer’s proprietary models) displaying in reasonable detail the basis for such determination or calculation, as the case may be.

		
		 	 4. Account Details:

		
		 	Dealer Payment Instructions: [            ]
				
		 		  	 Counterparty Payment Instructions:
	  	To be provided by Counterparty.
		
		 	5. Offices:
			
		 		  	The Office of Dealer for the Transaction is:

  

			
	 [Dealer]
	  	
	 [Address]
	  	
	 Attention:
	  	 [            ]

	 Telephone:
	  	 [            ]

	 Facsimile:
	  	 [            ]

  

					
		 	The Office of Counterparty for the Transaction is: Not applicable
		
		 	6. Notices: For purposes of this Confirmation:
			
		 		 	Address for notices or communications to Counterparty:

  

			
	To:	  	Alliance Data Systems Corporation
		  	17655 Waterview Parkway
		  	Dallas, TX 75252
	Attn:	  	Chief Financial Officer
	Telephone:	  	(972) 348-5100
	Facsimile:	  	(972) 348-5326

 Address for notices or communications to Dealer: 
  

			
	To:	  	[Dealer]
		  	[Address]
	Attn:	  	 [            ]

	Telephone:	  	 [            ]

	Facsimile:	  	 [            ]

 7. Representations, Warranties and Agreements: 
 (a) In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and
for the benefit of, and agrees with, Dealer as follows: 
 (i) On the Trade Date, and as of the date of any election by
Counterparty of the Share Termination Alternative under (and as defined in) Section 8(b) below, (A) Counterparty is not aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other
documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) when considered as a whole (with the more recent such reports and documents
deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not misleading. 
  

 10 

 (ii) (A) On the Trade Date, transactions in the Shares are not prohibited by Regulation M
under the Exchange Act (“Regulation M”) as a result of such transactions meeting the requirements of the exceptions set forth in Sections 101(b)(10) and 102(b)(7) of Regulation M and (B) Counterparty shall not engage in any
“distribution,” as such term is defined in Regulation M, other than a distribution as to which the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M are available, until the second Exchange Business Day immediately
following the Trade Date. 
 (iii) On the Trade Date, other than (A) purchases of Shares pursuant to the prepaid forward
transactions entered into by Counterparty on the date hereof in connection with the issuance of the Convertible Securities; (B) purchases from, by or on behalf of directors, officers and employees of Counterparty and its affiliates that are not
“Rule 10b-18 purchases” as such term is defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”) and (C) purchases pursuant to any preexisting obligation arising under any employee benefit plan of Counterparty or
its subsidiaries, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative
instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited
partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares. 
 (iv) Without
limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Dealer is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 (each
as amended), or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or under FASB’s Liabilities & Equity Project. 
 (v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act. 
 (vi) Counterparty shall deliver to Dealer a certified copy of the resolution of Counterparty’s
board of directors (or a duly authorized committee thereof) authorizing the Transaction on or prior to the Trade Date. 
 (vii) Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of
the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act. 
 (viii) Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. 
 (ix) On each of the Trade Date and the Premium Payment Date, Counterparty would be able to purchase the Shares hereunder in compliance
with the laws of the jurisdiction of its incorporation. 
 (x) Counterparty understands no obligations of Dealer to it
hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency. 
 (xi) On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including
contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not
believe that it will, incur debt beyond its ability to pay as such debts mature. 
 (xii) On the Trade Date, Counterparty is
not subject to the requirements of the Bank Holding Company Act of 1956, as amended (the “BHCA”). Counterparty shall promptly notify Dealer upon becoming aware that it is subject to the requirements of the BHCA after the Trade Date.

 (b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in
Section 1a(12) of the U.S. Commodity Exchange Act, as amended. 
  

 11 

 (c) Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Counterparty represents and warrants to Dealer that (i) it has
the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under
the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not
be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws. 
 (d) Each
of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of
the United States Code (the “Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of
the Bankruptcy Code and a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code,
with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o); 546(e), 546(g),
548(d)(2); 555 and 560 of the Bankruptcy Code. 
 (e) Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Effective
Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement; provided that such opinion of counsel may contain customary exceptions and qualifications, including
without limitation exceptions or qualifications relating to indemnification provisions. 
 8. Other Provisions: 
 (a) Additional Termination Events. 
 (i) The occurrence of an Amendment Event shall be an Additional Termination Event hereunder with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party and Dealer
shall be the party entitled to designate an Early Termination Date with respect thereto pursuant to Section 6(b) of the Agreement. Upon a written request by Counterparty prior to the occurrence of an event that would otherwise constitute an
Amendment Event, Dealer shall use good faith efforts to propose an adjustment to the terms of the Transaction to preserve the economic intent of the parties. If Dealer proposes such an adjustment and Counterparty accepts Dealer’s proposed
adjustment prior to the occurrence of such event, Dealer shall so adjust the Transaction and such event shall not constitute an Amendment Event. 
 “Amendment Event” means that, without the prior written consent of Dealer (such consent not to be unreasonably withheld or delayed), Counterparty amends, modifies, supplements, waives or obtains a
waiver in respect of any term of the Indenture or the Convertible Securities governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term relating to conversion of the
Convertible Securities (including changes to the conversion price, conversion settlement dates or conversion conditions) or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible
Securities to amend. 
 (ii) The occurrence of an “Event of Default” with respect to Counterparty under the terms of
the Convertible Securities as set forth in Section 7.01 of the Indenture shall be an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party and Dealer
shall be the party entitled to designate an Early Termination Date with respect thereto pursuant to Section 6(b) of the Agreement. 
 (iii) The occurrence of (x) a Repayment Event or (y) an Unexercised Options Event shall be an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction, Counterparty
is the sole Affected Party and Dealer shall upon Counterparty’s notice to Dealer thereof, which notice shall be delivered to Dealer on the date of such Repayment Event in the case of a Repayment Event, promptly designate an Early Termination
Date pursuant to Section 6(b) of the Agreement; provided that in either case the Transaction shall only be terminated in respect of the portion of the Transaction corresponding to 

  

 12 

 
the number of Convertible Securities that cease to be outstanding in connection with, as a result of or following such Repayment Event or Unexercised Options
Event; and provided further that in the case of an Unexercised Options Event, the value of the Early Termination Amount shall be capped so that the Early Termination Amount does not exceed in the case of an Unexercised Options Event, the
value of the Applicable Percentage of the cash, if any, and Shares, if any, in excess of USD1,000 per Convertible Security (in denominations of USD1,000) that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible
Securities converted on the relevant Conversion Date (with the value of any Shares included in such consideration determined by the Calculation Agent using the VWAP on the last day of the relevant Cash Settlement Averaging Period (as modified by the
provision set forth opposite the caption “Convertible Security Settlement Method”)). 
 “Repayment
Event” means that (A) any Convertible Securities are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, or for any other reason) by Counterparty or any of its subsidiaries, (B) any
Convertible Securities are delivered to Counterparty or any of its subsidiaries in exchange for delivery of any property or assets of Counterparty or any of its subsidiaries (howsoever described), (C) any principal of any of the Convertible
Securities is repaid prior to the final maturity date of the Convertible Securities (whether following acceleration of the Convertible Securities or otherwise), or (D) any Convertible Securities are exchanged by or for the benefit of the
holders thereof for any other securities of Counterparty or any of its affiliates (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction; provided that, in the case of clause (B) and
clause (D), conversions of Convertible Securities pursuant to the terms of the Indenture and, for the avoidance of doubt, exchange of Convertible Securities in connection with an Exchange Election shall not be Repayment Events. 
 “Unexercised Options Event” means that Counterparty fails to give Dealer the Notice of Exercise in writing prior to, in
respect of any exercise of Options (x) in the case of the Final Conversion Period, 5:00 P.M., New York City time, on the Scheduled Trading Day preceding the relevant Settlement Date and (y) in all other cases, 5:00 P.M., New York City
time, on the fifth Exchange Business Day following the relevant Notice Deadline. 
 (iv) The occurrence of a Failed Exchange
Election shall be an Additional Termination Event for which the provisions set forth opposite the caption “Procedures for Exercise—Conversion Date” shall govern. 
 (b) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Dealer shall owe Counterparty any amount
pursuant to “Consequences of Merger Events” above or Sections 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of an Insolvency, a Nationalization or a Merger Event, in each case, in which the consideration or proceeds to
be paid to holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the
Affected Party, that resulted from an event or events within Counterparty’s control) (a “Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Dealer to satisfy any such Payment Obligation
by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 8:00 A.M. and 5:00 P.M. New York City time on the relevant merger
date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as applicable (“Notice of Share Termination”); provided that if Counterparty does not
require Dealer to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding
Counterparty’s failure to elect or election to the contrary. Upon such Notice of Share Termination or such Dealer election, the following provisions shall apply on the Scheduled Trading Day immediately following the relevant merger date,
Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as applicable: 
  

			
	Share Termination Alternative:	 	Applicable and means that Dealer shall deliver to Counterparty the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to
“Consequences of Merger Events” above, Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, or such later date as the Calculation Agent may reasonably determine (the “Share
Termination Payment Date”), in satisfaction of the Payment Obligation.

  

 13 

			
	 Share Termination Delivery
 Property:
	 	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall
adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.

		
	Share Termination Unit Price:	 	The value of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation
Agent to Dealer at the time of notification of the Payment Obligation.
		
	Share Termination Delivery Unit:	 	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization or Merger Event, a unit consisting of
the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization or
Merger Event. If such Insolvency, Nationalization or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
		
	Failure to Deliver:	 	Applicable
		
	Other applicable provisions:	 	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer of the Shares)
and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units.”

 (c) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer based on the advice of outside counsel, any Shares (the “Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by
Dealer without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the
Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance reasonably satisfactory to Dealer, substantially in the form of a registration agreement for a registered offering, (B) provide
accountants’ “comfort” letters in customary form for registered offerings of equity securities, (C) provide negative assurance disclosure opinions of nationally recognized outside counsel to Counterparty reasonably acceptable to
Dealer, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Dealer a reasonable opportunity to conduct a “due diligence”
investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities; provided, however, that if Dealer, in its reasonable discretion, is not satisfied with access to due diligence materials,
the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this Section 8(c) shall apply at the election of Counterparty;
(ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities, in
form and substance reasonably satisfactory to Dealer, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of
the Hedge Shares from Dealer), opinions and certificates and such other documentation as is customary for private placement agreements, all reasonably acceptable to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms
of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares
from Dealer at the VWAP Price on the days and in the amounts Dealer would have otherwise sold such Hedge Shares in the public markets had Dealer not been restricted from so selling such Hedge Shares. “VWAP Price” means, on any
Exchange Business Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg 

  

 14 

 
Screen ADS.N <Equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Exchange
Business Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Exchange Business Day, as determined by the Calculation Agent using a volume-weighted method). This paragraph shall survive the termination,
expiration or early unwind of the Transaction. 
 (d) Amendment to Equity Definitions. The following amendment shall be made to the
Equity Definitions: 
 Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the
fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or
(C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA 2002 Master Agreement with respect to that Issuer.” 
 (e) Repurchase and Conversion Rate Adjustment Notices. Counterparty shall, at least 10 Scheduled Trading Days prior to effecting any repurchase of
Shares or consummating or otherwise executing or engaging in any transaction or event, other than a stock split or stock dividend (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such
term is defined in the Indenture), give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) if, following such repurchase or Conversion Rate Adjustment Event, the Notice Percentage
as determined on the date of such Repurchase Notice is (i) greater than [            ]%4 and (ii) in the case of any Repurchase Notice other than the first such Repurchase Notice, greater by 0.5% or more than the Notice Percentage included in the immediately preceding Repurchase Notice. The “Notice
Percentage” as of any day is the fraction, expressed as a percentage, the numerator of which is the sum of (x) the Number of Shares for the Transaction,
[            ]5, and the denominator of which is the number of Shares outstanding on
such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their
respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities (or actions in respect
thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws, including without limitation, Section 16 of the Exchange Act, relating to or arising out of such failure. If for any reason the
foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified
Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in
connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such
claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made
pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer. So long as the foregoing notice requirement set forth in this Section 8(e) continues to be applicable to Counterparty, Counterparty
shall not be required to comply with the similar notice provision set forth in Section 8(e) of the Convertible Bond Hedge Transaction between Counterparty and Dealer dated June 23, 2008. 
 (f) Transfer and Assignment. Dealer may transfer any of its rights or obligations under the Transaction only with the prior written consent of
Counterparty. Counterparty may transfer its rights and obligations under the Transaction without the consent of Dealer; provided that (i) Counterparty shall deliver opinions and documents reasonably satisfactory to Dealer in connection
with such assignment; (ii) such assignment shall be effected on terms 
  

	4	For each of BofA, Barclays and JPM, insert 17.7, 4.5 and 12.3, respectively.  

	5	For BofA, insert “(y) the Number of Shares for the Convertible Bond Hedge Transaction between Counterparty and Dealer dated June 23, 2008 and (z) the Number of
Shares for the Forward Stock Purchase Transaction between Counterparty and Merrill Lynch International dated the date hereof”. 

 For Barclays, insert “and (y) the Number of Shares for the Forward Stock Purchase Transaction between Counterparty and Dealer dated the date hereof”. 
 For JPM, insert “and (y) the Number of Shares for the Convertible Bond Hedge Transaction between Counterparty and Dealer dated June 23,
2008”. 
  

 15 

 
reasonably satisfactory to Dealer with respect to any legal and regulatory requirements relevant to Dealer; (iii) Alliance Data Systems Corporation (or
any successor obligor under the Convertible Securities) shall continue to be obligated to provide notices hereunder relating to the Convertible Securities and continue to be obligated with respect to “Disposition of Hedge Shares” and
“Repurchase and Conversion Rate Adjustment Notices” above; (iv) such assignment shall be made to a U.S. person (as defined in the Internal Revenue Code of 1986, as amended); (v) Dealer shall not, as a result of such assignment,
be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than the amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(vi) no Event of Default, Potential Event of Default or Termination Event shall occur as a result of such assignment; (vii) if Dealer reasonably requests, the transferee shall agree not to hedge its exposure to the Transaction, or to hedge
such exposure only pursuant to an effective registration of Alliance Data Systems Corporation (or any successor obligor under the Convertible Securities) or otherwise in compliance with applicable securities laws in a manner that, in the reasonable
judgment of Dealer, will not expose Dealer to material risks under applicable securities laws; (viii) without limiting the generality of clause (v), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide
such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (v) and (vi) will not occur upon or after such transfer and assignment; and (ix) Counterparty shall be
responsible for Dealer’s reasonable out-of-pocket costs and expenses, including reasonable fees of counsel, incurred in connection with such transfer and assignment. At any time at which any Excess Ownership Position exists, if Dealer, in its
reasonable discretion, is unable to effect a transfer or assignment to a third party in accordance with the requirements set forth above after using its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer and within a
time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of
the Transaction, such that such Excess Ownership Position no longer exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6
of the Agreement and Section 8(b) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty shall be
the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction. “Excess Ownership Position” means any of the following: (i) the Equity
Percentage exceeds 8.5%, (ii) the Option Equity Percentage exceeds [            ]%6
or (iii) the CBCA Percentage exceeds 8.5%. The “Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or any
other person subject to aggregation with Dealer, for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, or of any “group” (within the meaning of Section 13) of which Dealer is or may be
deemed to be a part, beneficially owns (within the meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day. The “Option Equity Percentage” as
of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (i) the Number of Shares on such day, plus (ii) the Number of Shares (as such term is defined in the Convertible Bond Hedge
Transaction between Dealer and Counterparty dated as of July 23, 2008) on such day and (B) the denominator of which is the number of Shares outstanding on such day. The “CBCA Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the number of Shares deemed to be directly or indirectly owned or controlled, for purposes of the Change in Bank Control Act, as amended, by Dealer and its affiliates on such day and
(B) the denominator of which is the number of Shares outstanding on such day. 
 (g) Staggered Settlement. Dealer may, by notice
to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows: 
 (i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates
(each of which will be on or prior to such Nominal Settlement Date, but not prior to the beginning of the related Cash Settlement Averaging Period (as modified by the provision set forth opposite the caption “Convertible Security Settlement
Method”)) or delivery times and how it will allocate the Shares it is required to deliver under “Delivery Obligation” (above) among the Staggered Settlement Dates or delivery times; and 
 (ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery
times will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date. 
  

	6	For BofA, insert 19. For each of Barclays and JPM, insert 14.5. 

  

 16 

 (h) Right to Postpone or Extend. Dealer may postpone any Settlement Date, in whole or in part, for
up to 20 Scheduled Trading Days or extend the Cash Settlement Averaging Period (as modified by the provision set forth opposite the caption “Convertible Security Settlement Method”) by the addition of up to 20 Scheduled Trading Days, in
each case if the Calculation Agent determines that such postponement or extension is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable
Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder, in each case in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with
applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. In connection with any Settlement Date that is postponed or any Cash Settlement Averaging Period that is extended pursuant to
the immediately preceding sentence, if Shares are to be delivered by Dealer to Counterparty on such postponed Settlement Date or on the Settlement Date related to such extension to the Cash Settlement Averaging Period and the record date for any
dividend or distribution on the Shares occurs during the period from, and including, the original Settlement Date to, but excluding, such postponed or extended Settlement Date, then on such postponed or extended Settlement Date, in addition to
delivering such Shares, Dealer shall pay or deliver, as the case may be, to Counterparty, the per Share amount of such dividend or distribution multiplied by the number of Shares to be delivered. 
 (i) Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided
to Counterparty relating to such tax treatment and tax structure. 
 (j) Designation by Dealer. Notwithstanding any other provision in
this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such shares
or other securities and otherwise to perform Dealer obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty only to the extent of any such
performance. 
 (k) No Netting and Set-off. Each party waives any and all rights it may have to set off obligations arising
under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. 
 (l) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event
of Counterparty’s bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty’s bankruptcy to any claim arising as a result of a breach by Counterparty of
any of its obligations under this Confirmation or the Agreement. 
 (m) Early Unwind. In the event the sale by Counterparty of the
Convertible Securities is not consummated with the initial purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on June 2, 2009 (or such later date as agreed upon by the parties, which in no event
shall be later than June 16, 2009) (June 2, 2009 or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and the
Transaction and all of the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated. Following such termination and cancellation, each party shall be released and discharged by the other party from
and agrees not to make any claim against the other party with respect to any obligations or liabilities of either party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date. Dealer and
Counterparty represent and acknowledge to the other that upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. 
 (n) Counterparty’s Obligation to Pay Cancellation Amounts and Early Termination Amounts. Dealer and Counterparty hereby agree that,
notwithstanding anything to the contrary herein or in the Agreement, following Dealer’s receipt from Counterparty of the Premium on the Premium Payment Date, in the event that (a) an Early Termination Date (whether as a result of an Event
of Default or a Termination Event) occurs or is designated with respect to the Transaction and, as a result, Counterparty owes to Dealer an Early Termination Amount or (b) Counterparty owes to Dealer, pursuant to Section 12.7 or
Section 12.9 of the Equity Definitions, a Cancellation Amount, such amount shall be deemed to be zero. If Counterparty pays the Premium on the Premium Payment Date, then under no circumstances shall Counterparty be required to pay any amount in
addition to the Premium under the Transaction. For the avoidance of doubt, the preceding sentence shall not be construed as limiting any damages that may be payable by Counterparty as a result of a breach of or an indemnity under this Confirmation
or the Agreement. 
  

 17 

 (o) [Regulatory Provisions and Role of Agent language to be included, in each case if applicable]

 (p) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR
ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF. 
 (q) Governing Law; Jurisdiction. THIS CONFIRMATION
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS. 
  

 18 

 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy
of this Confirmation enclosed for that purpose and returning it to us. 
  

			
	Yours faithfully,
	
	 [DEALER]

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  

			
	 Agreed and Accepted By:

	
	 ALLIANCE DATA SYSTEMS CORPORATION

		
	By:	 	  

	Name:	 	Edward J. Heffernan
	Title:	 	President and Chief Executive OfficerForm of Warrant Confirmation

 Exhibit 10.3 
 EXECUTION VERSION 
  

					
		  	May 27, 2009
		
	To:	  	Alliance Data Systems Corporation
		  	17655 Waterview Parkway
		  	Dallas, TX 75252
		  	Attn:	  	Chief Financial Officer
		  	Telephone:	  	(972) 348-5100
		  	Facsimile:	  	(972) 348-5326
			
	From:	  	[Dealer]	  	
		  	[Address]	  	
		  	Attn:	  	[                        ]
		  	Telephone:	  	[                        ]
		  	Facsimile:	  	[                        ]
		
	Re:	  	Issuer Warrant Transaction
		  	(Transaction Reference Number:
                        )

 Ladies and Gentlemen: 
 The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the
“Transaction”) between [Dealer] (“Dealer”) and Alliance Data Systems Corporation (“Issuer”). This communication constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below. 
 1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA
Definitions (the “2006 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2006 Definitions, the
“Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity
Definitions will govern. For purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires. 
 This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement (the “ISDA Form”) as if Dealer and Issuer had executed an agreement in such form (without
any Schedule but with the elections set forth in this Confirmation) on the Trade Date. For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement. 
 All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the
event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern. 
 2. The
Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows: 
 General Terms: 
  

			
	 Trade Date:
	  	May 27, 2009
		
	 Effective Date:
	  	June 2, 2009, or such other date as agreed between the parties, subject to Section 8(n) below

			
	 Components:
	  	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth
in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
		
	 Warrant Style:
	  	European
		
	 Warrant Type:
	  	Call
		
	 Seller:
	  	Issuer
		
	 Buyer:
	  	Dealer
		
	 Shares:
	  	The common stock of Issuer, par value USD0.01 per share (Exchange Symbol: “ADS”).
		
	 Number of Warrants:
	  	For each Component, as provided in Annex A to this Confirmation.
		
	 Warrant Entitlement:
	  	One Share per Warrant
		
	 Strike Price:
	  	USD70.5425
		
	 Premium:
	  	USD[            ]1
		
	 Premium Payment Date:
	  	The Effective Date
		
	 Exchange:
	  	New York Stock Exchange
		
	 Related Exchange:
	  	All Exchanges
		
	Procedures for Exercise:	  	
		
	 In respect of any Component:
	  	
		
	 Expiration Time:
	  	Valuation Time
		
	 Expiration Date:
	  	As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for
another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in
respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the
Expiration Date (irrespective of whether such date is an Expiration Date occurring on the Final Disruption Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the
Definitions, the VWAP Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such

  

	 1
	 For Bank of America, N.A. (“BofA”), insert 13,065,000. For each of Barclays Bank PLC
(“Barclays”) and JPMorgan Chase Bank, National Association, London Branch (“JPM”), insert 6,532,500.00. 

  

 2 

			
		  	Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be
the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions
shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” means December 16, 2014.
		
	 Market Disruption Event:
	  	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in
Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof.
		
		  	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line
thereof.
		
	 Automatic Exercise:
	  	Applicable; and means that the Number of Warrants for each Component will be deemed to be automatically exercised at the Expiration Time on the Expiration Date for such Component unless
Dealer notifies Issuer (by telephone or in writing) prior to the Expiration Time on the Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply.
		
	 Issuer’s Telephone Number
 and Telexand/or Facsimile Number
 and Contact Details for purpose of
 Giving Notice:
	  	To be provided by Issuer.
		
	Settlement Terms:	  	
		
	 In respect of any Component:
	  	
		
	 Settlement Currency:
	  	USD
		
	 Net Share Settlement:
	  	On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to the account specified by Dealer and cash
in lieu of any fractional Shares valued at the VWAP Price on the Valuation Date corresponding to such Settlement Date.
		
	 Number of Shares to be Delivered:
	  	In respect of any Exercise Date, subject to the last sentence of Section 9.5 of the Equity Definitions, the product of (i) the number of Warrants exercised or deemed exercised on such
Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess, if any, of the VWAP Price on the Valuation Date occurring on such Exercise Date over the Strike Price divided by (B) such VWAP Price.
		
		  	The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no later than 4:00 P.M. (local time in New York City) on the relevant Settlement Date.
		
	 VWAP Price:
	  	For any Valuation Date, the Rule 10b-18 dollar volume weighted average price per Share for such Valuation Date based on transactions executed during such Valuation Date, as reported on
Bloomberg Screen “ADS.N <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such Valuation Date for any reason, as reasonably determined by the Calculation Agent.

  

 3 

			
	 Other Applicable Provisions:
	  	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will be
applicable as if “Physical Settlement” applied to the Transaction.
		
	Adjustments:	  	
		
	 In respect of any Component:
	  	
		
	 Method of Adjustment:
	  	Calculation Agent Adjustment
		
	 Extraordinary Dividend:
	  	Any Dividend (i) that has an ex-dividend date occurring on or after the Trade Date and on or prior to the Expiration Date and (ii) the amount or value of which exceeds the Ordinary Dividend
Amount for such Dividend, as determined by the Calculation Agent.
		
	 Dividend:
	  	Any cash dividend or distribution on the Shares.
		
	 Ordinary Dividend Amount:
	  	USD0.00.
		
	Extraordinary Events:	  	
		
	 Consequences of Merger Events:
	  	
		
	 (a)    Share-for-Share:
	  	Modified Calculation Agent Adjustment
		
	 (b)    Share-for-Other:
	  	Cancellation and Payment (Calculation Agent Determination)
		
	 (c)    Share-for-Combined:
	  	Cancellation and Payment (Calculation Agent Determination)
		
	 Tender Offer:
	  	Applicable.
		
	 Consequences of Tender Offers:
	  	
		
	 (a)    Share-for-Share:
	  	Modified Calculation Agent Adjustment
		
	 (b)    Share-for-Other:
	  	Cancellation and Payment (Calculation Agent Determination) on that portion of the Other Consideration that consists of cash; Modified Calculation Agent Adjustment on the remainder of the
Other Consideration.
		
	 (c)    Share-for-Combined:
	  	Modified Calculation Agent Adjustment
		
	 Modified Calculation
 Agent Adjustment:
	  	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would
result in Issuer being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Issuer and the issuer of the Shares
shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Dealer that Dealer has determined, in its reasonable discretion,
to be reasonably necessary or appropriate to allow Dealer to continue as a party to the

  

 4 

			
		  	Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant
with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under
Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
		
	 New Shares:
	  	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, (a) the text in clause (i) thereof shall be deleted in its entirety (including the word “and” following
such clause (i)) and replaced with “publicly quoted, traded or listed (or whose related depositary receipts are publicly quoted, traded or listed) on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or their respective successors),” and (b) the phrase “and (iii) (1) of any entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes
Issuer under the Transaction or (2) of such an entity or person that does not also become Issuer under the Transaction or of an entity or person organized elsewhere, unless, in the case of clause (2), the Calculation Agent determines that (x)
treating such shares or depositary receipts as New Shares will have a material adverse effect on Dealer’s rights or obligations in respect of the Transaction, on its Hedging Activities in respect of the Transaction or on the costs (including,
without limitation, due to any increase in tax liability, decrease in tax benefit or other adverse effect on its tax position) of engaging in any of the foregoing and (y) Dealer cannot promptly avoid the occurrence of each such material adverse
effect by (I) transferring or assigning its rights and obligations under this Confirmation and the Agreement pursuant to Section 8(i) to an affiliate of Dealer that regularly engages in transactions similar to the Transaction or (II) amending the
terms of this Confirmation (whether because amendments would not avoid such occurrence or because Issuer fails to agree promptly to such amendments)” shall be inserted immediately prior to the period.
		
	 Nationalization, Insolvency
 or Delisting:
	  	Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a
Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global
Market (or their respective successors). If the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

  

 5 

			
	 Additional Disruption Events:
	  	
		
	 (a)    Change in Law:
	  	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions shall be amended by (i) deleting the word “or” after the parenthetical “(including, without
limitation, any tax law)” in clause (A) thereof, (ii) inserting after the parenthetical in clause (B) thereof the following words “or (C) due to a law or regulation or interpretation becoming applicable as a result of Issuer’s or one
or more of its subsidiaries entering a new business or changing the jurisdiction of organization of Issuer or one or more of its subsidiaries or as a result of any other action taken by Issuer or one or more of its subsidiaries”, (iii) deleting
the word “or” before “(Y)” in the seventh line thereof and (iv) inserting after the parenthetical in clause (Y) the following words “or (Z) in the case of a Change in Law described in clause (C), there will be a not
insignificant adverse effect on Dealer or any of its affiliates in respect of such Transaction or any related transactions”; and provided further that to the extent any increased cost described in clause (Y) of Section 12.9(a)(ii) of the Equity
Definitions is of a type also described in Section 12.9(a)(vi) of the Equity Definitions, then the consequences provided with respect to “Increased Cost of Hedging” in Section 12.9(b)(vi) of the Equity Definitions shall
apply.
		
	 (b)    Failure to Deliver:
	  	Applicable
		
	 (c)    Insolvency Filing:
	  	Applicable
		
	 (d)    Hedging Disruption:
	  	Not Applicable
		
	 (e)    Increased Cost of Hedging:
	  	Not Applicable
		
	 (f)     Loss of Stock Borrow:
	  	Applicable
		
	 MaximumStock Loan Rate:
	  	500 basis points per annum
		
	 (g)    Increased Cost of Stock Borrow:
	  	Applicable
		
	 Initial Stock Loan Rate:
	  	25 basis points per annum
		
	 Hedging Party:
	  	Dealer for all applicable Additional Disruption Events
		
	 Determining Party:
	  	Dealer for all applicable Extraordinary Events
		
	 Non-Reliance:
	  	Applicable
		
	 Agreements and Acknowledgments
	  	
		
	 Regarding Hedging Activities:
	  	Applicable
		
	 Additional Acknowledgments:
	  	Applicable
		
	 3.      Calculation Agent:
	  	Dealer. Following any determination or calculation by the Calculation Agent hereunder, the Calculation Agent will use its reasonable best efforts to provide to Issuer by e-mail promptly
following such determination or calculation (but in any event no later than three Scheduled Trading Days after any request by Issuer) a report (in a commonly used file format for the storage and manipulation of financial data without disclosing
Dealer’s proprietary models) displaying in reasonable detail the basis for such determination or calculation, as the case may be.
		
	 4.      Account Details:
	  	
	
	 Dealer Payment
Instructions:        [                        ]

  

 6 

			
		
	 Issuer Payment Instructions:
	  	To be provided by Issuer.

  

	 	5.	Offices: 

 The Office of Dealer for the Transaction
is: 
  

					
			
		  	 [Dealer]
	  	
		  	 [Address]
	  	
		  	 Attention:
	  	[                        ]
		  	 Telephone:
	  	[                        ]
		  	 Facsimile:
	  	[                        ]

 The Office of Issuer for the Transaction is: Not applicable 
  

	 	6.	Notices: For purposes of this Confirmation: 

  

	 	(a)	Address for notices or communications to Issuer: 

  

					
			
		  	 To:
	  	 Alliance Data Systems Corporation
 17655 Waterview
Parkway
 Dallas, TX 75252

		  	 Attn:
	  	Chief Financial Officer
		  	 Telephone:
	  	(972) 348-5100
		  	 Facsimile:
	  	(972) 348-5326

  

	 	(b)	Address for notices or communications to Dealer: 

					
			
		  	 To:
	  	[Dealer]
		  		  	[Address]
		  	 Attn:
	  	[                    ]
		  	 Telephone:
	  	[                    ]
		  	 Facsimile:
	  	[                    ]

  

	 	7.	Representations, Warranties and Agreements: 

 (a) In
addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows: 
 (i) On the Trade Date, and as of the date of any election by Issuer of the Share Termination Alternative under (and as defined in)
Section 8(a) below, (A) Issuer is not aware of any material nonpublic information regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not
misleading. 
 (ii) Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer acknowledges that
Dealer is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 (each as amended), or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project. 
 (iii) Issuer shall deliver to Dealer a certified copy of the
resolution of Issuer’s board of directors (or a duly authorized committee thereof) authorizing the Transaction on or prior to the Trade Date. 
 (iv) Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act. 
 (v) Issuer is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. 

 

 7 

 (vi) Issuer shall not take any action to decrease the number of Available Shares below
the Capped Number (each as defined below). 
 (vii) Issuer understands no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any Affiliate of Dealer or any governmental agency. 
 (viii) The Shares of Issuer initially issuable upon exercise of the Warrant (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Issuer. The Warrant Shares have
been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms
and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation
on the Exchange. 
 (ix) On the Trade Date, Issuer is not subject to the requirements of the Bank Holding Company Act of 1956,
as amended (the “BHCA”). Issuer shall promptly notify Dealer upon becoming aware that it is subject to the requirements of the BHCA after the Trade Date. 
 (b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended. 
 (c) Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants to Issuer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the
Transaction for its own account without a view to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted
under this Confirmation, the Securities Act and state securities laws. 
 (d) Each of Dealer and Issuer agrees and acknowledges that Dealer
is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).
The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery
hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” as such
term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in
Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555 and 560 of the Bankruptcy Code.

 (e) Issuer shall deliver to Dealer an opinion of counsel, dated as of the Effective Date and reasonably acceptable to Dealer in form and
substance, with respect to the matters set forth in Section 3(a) of the Agreement; provided that such opinion of counsel may contain customary exceptions and qualifications, including without limitation exceptions or qualifications
relating to indemnification provisions. 
 8. Other Provisions: 
 (a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If Issuer shall owe Dealer any amount pursuant
to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions (except in the event of an Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares
consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the event of an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party, that resulted from an
event or events within Issuer’s control) (a “Payment Obligation”), Issuer shall have the right, in its sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving
irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York City time on the Merger 

  

 8 

 
Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as
applicable (“Notice of Share Termination”); provided that if Issuer does not elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to
require Issuer to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Issuer’s failure to elect or election to the contrary. Upon such Notice of Share Termination or such Dealer election, the following
provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of an Additional Disruption Event, as
applicable: 
  

			
	Share Termination Alternative:	  	Applicable; and means that Issuer shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.7
or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of the Payment Obligation.
		
	Share Termination Delivery	  	
		
	Property:	  	A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall
adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.

		
	Share Termination Unit Price:	  	The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as
determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Issuer at the time of notification of the Payment Obligation.
		
	Share Termination Delivery Unit:	  	In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a
unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency,
Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum
possible amount of cash.
		
	Failure to Deliver:	  	Applicable
		
	Other applicable provisions:	  	If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Issuer is the Issuer of the Shares) and
9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery
Units”.

 (b) Registration/Private Placement Procedures. (i) If, in the commercially reasonable
judgment of Dealer based on the advice of outside counsel, for any reason, any Shares or any securities of Issuer or its affiliates comprising any Share Termination Delivery Units deliverable to Dealer hereunder (any such Shares or securities,
“Delivered Securities”) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act (other than by reason of Dealer being an “affiliate” of Issuer as that term is defined in Rule 144,
determined without regard to this Transaction or any Shares received hereunder), then the provisions set forth in this Section 8(b) shall apply. At the election of Issuer by notice to Dealer within one Exchange Business Day after the relevant
delivery obligation arises, but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Delivered Securities delivered by Issuer to Dealer shall be, at the time of such
delivery, covered by an 

  

 9 

 
effective registration statement of Issuer for immediate resale by Dealer (such registration statement and the corresponding prospectus (the
“Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Dealer) or (B) Issuer shall deliver additional Delivered Securities,
which may bear any reasonably necessary restrictive legends, so that the value of such Delivered Securities, as determined by the Calculation Agent to reflect an appropriate liquidity discount, equals the value of the number of Delivered Securities
that would otherwise be deliverable if such Delivered Securities were freely tradeable (without prospectus delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that Issuer may not make the
election described in this clause (B) if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the delivery by
Issuer to Dealer (or any affiliate designated by Dealer) of the Delivered Securities or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Delivered Securities by Dealer (or any such affiliate
of Dealer). (For the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.) 
 (ii) If Issuer makes the election described in clause (b)(i)(A) above: 
 (A) Dealer (or an Affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Issuer that is customary in scope for underwritten offerings of equity securities and that yields results that are commercially reasonably satisfactory to Dealer or such Affiliate, as the case may be, in its discretion;
and 
 (B) Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall enter into an agreement (a
“Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Delivered Securities by Dealer or such Affiliate substantially similar to underwriting agreements customary for underwritten
offerings of equity securities, in form and substance commercially reasonably satisfactory to Dealer or such Affiliate and Issuer, which Registration Agreement shall include, without limitation, provisions substantially similar to those contained in
such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its Affiliates and Issuer, shall provide for the payment by Issuer of all reasonable expenses in connection with such
resale, including all reasonable registration costs and all reasonable fees and expenses of counsel for Dealer, and shall provide for the delivery of accountants’ “comfort letters” to Dealer or such Affiliate with respect to the
financial statements and certain financial information contained in or incorporated by reference into the Prospectus. 
 (iii)
If Issuer makes the election described in clause (b)(i)(B) above: 
 (A) Dealer (or an Affiliate of Dealer designated by
Dealer) and any potential institutional purchaser of any such Delivered Securities from Dealer or such Affiliate identified by Dealer shall enter into a confidentiality agreement, on terms reasonably satisfactory to Issuer and Dealer, and be
afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Issuer customary in scope for private placements of equity securities (including, without limitation, the right
to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them); 
 (B) Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall enter into an agreement (a “Private Placement
Agreement”) on commercially reasonable terms in connection with the private placement of such Delivered Securities by Issuer to Dealer or such Affiliate and the private resale of such shares by Dealer or such Affiliate, substantially
similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Dealer and Issuer, which Private Placement Agreement shall include, without
limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its Affiliates and Issuer, shall
provide for the payment by Issuer of all reasonable expenses in connection with such resale, including all reasonable fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of Issuer reasonably necessary or
advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall use best efforts to provide for the delivery of accountants’ “comfort letters”
to Dealer or such Affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares; 
  

 10 

 (C) Issuer agrees that any Delivered Securities so delivered to Dealer, (i) may be
transferred by and among Dealer and its Affiliates, and Issuer shall effect such transfer without any further action by Dealer and (ii) after the then-applicable conditions of Rule 144 under the Securities Act (or any successor provision) are
satisfied with respect to such Delivered Securities, Issuer shall promptly remove, or cause the transfer agent for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Delivered Securities
upon delivery by Dealer (or such Affiliate of Dealer) to Issuer or such transfer agent of any seller’s and broker’s representation letters customarily delivered by Dealer in connection with resales of restricted securities pursuant to Rule
144 under the Securities Act, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by
Dealer (or such affiliate of Dealer); and 
 (D) Issuer shall not take, or cause to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery Units, as the case may be, or the exemption
pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer). 
 (c) Make-whole. If Issuer makes the election described in clause (b)(i)(B) of paragraph (b) of this Section 8, then, subject to
applicable securities laws, Dealer or its affiliate may sell such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of
such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer completes the sale of all such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of
Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the Freely Tradeable Value (such amount of the Freely Tradeable Value, the “Required Proceeds”). If any of such
delivered Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the Required Proceeds, Dealer shall return such remaining Shares or Share Termination Delivery Units to Issuer. If the Required Proceeds exceed the
realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the
“Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on the last day of the
Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the
manner contemplated by this Section 8(c). This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(e). 
 (d) Limit on Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, Dealer may not exercise any Warrant hereunder, have the “right to acquire” (within
the meaning of NYSE Rule 312.04(g)) Shares upon exercise of any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but
only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) Dealer’s Beneficial Ownership would be equal to or greater than 8.5% of the outstanding Shares; (ii) Dealer and
its affiliates would directly or indirectly own or control, for purposes of the Change in Bank Control Act, as amended, in excess of 8.5% of the outstanding Shares; or (iii) Dealer would directly or indirectly beneficially own (as such term is
defined for purposes of Section 13(d) of the Exchange Act) in excess of 2,779,692 Shares (each of clauses (i), (ii) or (iii) above, an “Ownership Limitation”). Any purported delivery hereunder shall be void and have
no effect to the extent (but only to the extent) that, after such delivery, Dealer would directly or indirectly exceed an Ownership Limitation. If any delivery owed to Dealer or exercise hereunder is not made, in whole or in part, as a result of
this provision, Issuer’s obligation to make such delivery and Dealer’s right to such exercise shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business
Day after, Dealer gives notice to Issuer that, after such delivery, Dealer would not directly or indirectly exceed an Ownership Limitation. “Dealer’s Beneficial Ownership” means the “beneficial ownership” (within the
meaning of Section 13 of the Exchange Act and the rules promulgated thereunder (collectively, “Section 13”) of Shares by Dealer, together with any affiliate or other person subject to aggregation with Dealer under
Section 13, or by any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be a part. Notwithstanding anything in the Agreement or this Confirmation to the contrary, Dealer (or the affiliate
designated by Dealer pursuant to Section 8(k) below) shall not become the record or beneficial owner, or otherwise have any rights as a holder, of any Shares that Dealer (or such affiliate) is not entitled to receive at any time pursuant to
this Section 8(d), until such time as such Shares are delivered pursuant to this Section 8(d). 
  

 11 

 (e) Limitations on Settlement by Issuer.
Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction in excess of [            ]
2 Shares (the “Capped Number”). Issuer represents and warrants (which shall be deemed to be repeated on each
day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of authorized but unissued Shares of the Issuer that are not reserved for future issuance in connection with transactions in the Shares (other than
the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available Shares”). In the event Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this
Section 8(e) (the resulting deficit, the “Deficit Shares”), Issuer shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares
when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration),
(ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved or (iii) Issuer additionally authorizes any unissued Shares that
are not reserved for other transactions. Issuer shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to
be delivered) and promptly deliver such Shares thereafter. 
 (f) Right to Extend. Dealer may postpone any Exercise Date or any other
date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Number of Shares to be Delivered with respect to one or more Components), if Dealer
determines, in its commercially reasonable discretion, that such extension is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to
effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder, in each case in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. 
 (g) Equity Rights. Dealer
acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Issuer’s bankruptcy. For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement. For the
avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement. 
 (h) Amendments to Equity Definitions. The following amendments shall be made to the Equity Definitions: 
 (i) The first sentence of Section 11.2(c) of the Equity Definitions prior to clause (A) thereof, is hereby amended to read as
follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or
more of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account
solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account
solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares but only if such change is the result of a corporate event involving the Issuer)”; 
 (ii) Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative” and
replacing them with “material” and adding the phrase “or Warrants” at the end of the sentence; 
  

	2	For BofA, insert 4,887,963. For each of Barclays and JPM, insert 2,443,981. 

  

 12 

 (iii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting
the words “that may have a diluting or concentrative” and replacing them with “that is the result of a corporate event involving the Issuer and that may have a material” and adding the phrase “or Warrants” at the end of
the sentence; 
 (iv) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the
fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or
(C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA 2002 Master Agreement with respect to that Issuer.”; 
 (v) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its
entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends
Shares in the amount of the Hedging Shares or” in the penultimate sentence; and 
 (vi) Section 12.9(b)(v) of the
Equity Definitions is hereby amended by (1) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (2) deleting subsection (C) in its entirety and deleting the
word “or” immediately preceding subsection (C); (3) inserting after the phrase “If such notice is not given” in the second sentence thereof the words “or the Non-Hedging Party has not elected an alternative specified in
clause (A) or (B) above”; (4) replacing in the penultimate sentence the words “either party” with “the Hedging Party”; and (5) deleting clause (X) in the final sentence. 
 (i) Transfer and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, only
with the prior written consent of Issuer, such consent not to be unreasonably withheld or delayed. 
 (j) Disclosure. Effective from
the date of commencement of discussions concerning the Transaction, Issuer and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Issuer relating to such tax treatment and tax structure. 
 (k) Designation by Dealer. Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from
Issuer, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Dealer obligations in respect of the Transaction and any such designee may assume such obligations.
Dealer shall be discharged of its obligations to Issuer only to the extent of any such performance. 
 (l) Additional Termination
Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Issuer shall be the sole Affected Party; provided that with
respect to any Additional Termination Event, Dealer may choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein
except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect: 
 (i) no later than the first anniversary of the Trade Date (or six months if Issuer is, and has been for a period of at least 90 days
immediately before the determination, subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has been current in its Exchange Act reports for the trailing 12 months), Dealer reasonably determines that it is
advisable to terminate a portion of the Transaction so that Dealer’s related hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by Dealer); 
 (ii) At any time at which any Excess
Ownership Position exists, if Dealer, in its reasonable discretion, is unable to effect a transfer or assignment to a third party in accordance with the requirements set forth above after using its commercially reasonable efforts on pricing terms
reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion
(the “Terminated Portion”) of the Transaction, such that such Excess Ownership Position no longer exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a 

  

 13 

 
payment or delivery shall be made pursuant to Section 6 of the Agreement as if (i) an Early Termination Date had been designated in respect of a
Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated
Transaction. “Excess Ownership Position” means any of the following: (i) the Equity Percentage exceeds 8.5%, (ii) the Option Equity Percentage exceeds 14.5% or (iii) the CBCA Percentage exceeds 8.5%. The
“Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or any other person subject to aggregation with Dealer, for
purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, or of any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be a part, beneficially owns (within the
meaning of Section 13 of the Exchange Act) on such day and (B) the denominator of which is the number of Shares outstanding on such day. The “Option Equity Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is [            ](3)
the sum of (i) the product of the Number of Warrants and the Warrant Entitlement on such day, plus (ii) the product of the Number of Warrants and the Warrant Entitlement (as such terms are defined in the Issuer Warrant Transaction between
Dealer and Issuer dated as of July 23, 2008, as amended) on such day and (B) the denominator of which is the number of Shares outstanding on such day. The “CBCA Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the number of Shares deemed to be directly or indirectly owned or controlled, for purposes of the Change in Bank Control Act, as amended, by Dealer and its affiliates on such day and (B) the
denominator of which is the number of Shares outstanding on such day; 
 (iii) a “person” or “group”
within the meaning of Section 13(d) of the Exchange Act other than Issuer, its subsidiaries or its or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group
has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Issuer’s common equity representing more than 50% of the voting power of Issuer’s common equity; 
 (iv) consummation of any share exchange, exchange offer, tender offer, consolidation or merger of Issuer pursuant to which the Shares will
be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Issuer and its subsidiaries, taken as a whole, to any
person other than one or more of Issuer’s subsidiaries (any such exchange, offer, consolidation, merger, transaction or series of transactions being referred to herein as an “event”); provided, however, that any such
event where the holders of more than 50% of the Shares immediately prior to such event own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving person or transferee or the parent thereof immediately
after such event shall not be an Additional Termination Event; 
 (v) the Continuing Directors cease to constitute at least a
majority of Issuer’s board of directors; 
 (vi) Issuer’s stockholders approve any plan or proposal for
Issuer’s liquidation or dissolution; or 
 (vii) the Shares cease to be listed on at least one U.S. national securities
exchange. 
 Notwithstanding the foregoing, an event set forth in clause (iii) or (iv) above will not constitute an Additional
Termination Event if at least 90% of the consideration, excluding cash payments for fractional shares, in the event constituting the Additional Termination Event consists of shares of common stock, depositary receipts or other certificates
representing common equity interests, in each case, that are traded on a U.S. national securities exchange or that will be so traded when issued or exchanged in connection with the Additional Termination Event (these securities being referred to as
“publicly traded securities”). 
 “Continuing Director” means a director who either was a member of Issuer’s board
of directors on the Effective Date or who becomes a member of Issuer’s board of directors subsequent to that date and whose election, appointment or 
  

	 (3)
	 For each of BofA and JPM, insert “the sum of (i) the product of the
Number of Warrants and the Warrant Entitlement on such day, plus (ii) the product of the Number of Warrants and the Warrant Entitlement (as such terms are defined in the Issuer Warrant Transaction between Dealer and Issuer dated as of
July 23, 2008, as amended)”. 

 For Barclays, insert “the product of the Number of Warrants and
the Warrant Entitlement.” 
  

 14 

 
nomination for election by Issuer’s stockholders, is duly approved by a majority of the continuing directors on Issuer’s board of directors at the
time of such approval, either by a specific vote or by approval of the proxy statement issued by Issuer on behalf of its entire board of directors in which such individual is named as nominee for director. 
 (m) No Netting and Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the
Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. The provisions of Section 2(c) of the Agreement shall not be applicable to the Transaction. 
 (n) Effectiveness. If, prior to the Effective Date, Dealer reasonably determines that it is advisable to cancel the Transaction because of
concerns that Dealer’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any
obligation to the other party in respect of the Transaction. 
 (o) [Regulatory Provisions and Role of Agent language to be included, in
each case if applicable] 
 (p) Waiver of Trial by Jury. EACH OF ISSUER AND BUYER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE
ACTIONS OF BUYER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF. 
 (q) Governing Law; Jurisdiction.
THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS. 
  

 15 

 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy
of this Confirmation enclosed for that purpose and returning it to us. 
  

			
	Yours faithfully,
	
	[DEALER]
		
	By:	 	  

	Name:	 	
	Title:	 	

  

			
	Agreed and Accepted By:
	
	ALLIANCE DATA SYSTEMS CORPORATION
		
	By:	 	  

	Name:	 	Edward J. Heffernan
	Title:	 	President and Chief Executive Officer

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