SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

ALLIANCE DATA SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in Charter)

DELAWARE		001-15749		31-1429215
(State or Other Jurisdiction		(Commission		(IRS Employer
of Incorporation)		File Number)		Identification No.)

(Address and Zip Code of Principal Executive Offices)

(Registrant’s Telephone Number, including Area Code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

ITEM 1.01. Entry into a Material Definitive Agreement

     On October 28, 2005, Alliance Data Systems Corporation and certain of its subsidiaries (collectively, the “Company”) entered into amendments to the Company’s three credit facilities to increase the amount of revolving commitments under the facilities and amend certain covenants.

     The amendment to the 3-year credit facility increased the amount of revolving commitments thereunder from $200,000,000 to $250,000,000. The amendment to the 364-day credit facility increased the amount of revolving commitments thereunder from $205,000,000 to $230,000,000. After giving effect to the three amendments, the aggregate amount of revolving commitments under the three credit facilities is $515 million. In addition, the amendments increased the aggregate amounts of commitments permitted under the three facilities from $500 million to $550 million. As a result, the Company has the right to obtain commitments under the three credit facilities for an additional $35 million in the aggregate without having to amend the credit facilities. In addition, the amendments increased the amount of restricted payments permitted under the credit facilities. Except as set forth above, the remaining terms of each credit facility remain unchanged.

Item 2.03. Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant

See discussion in Item 1.01, which is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits

(c) Exhibits

EXHIBIT
NUMBER		DESCRIPTION
99.1		THIRD AMENDMENT TO CREDIT AGREEMENT (3-YEAR) dated as of October 28, 2005 by and among Alliance Data Systems Corporation, the guarantor party thereto, the banks party thereto, and Harris N.A., as administrative agent and letter of credit issuer.
99.2		FOURTH AMENDMENT TO CREDIT AGREEMENT (364-DAY) dated as of October 28, 2005 by and among Alliance Data Systems Corporation, the guarantor party thereto, the banks party thereto, and Harris N.A., as administrative agent and letter of credit issuer.
99.3		THIRD AMENDMENT TO CREDIT AGREEMENT (CANADIAN) dated as of October 28, 2005 by and among Loyalty Management Group Canada Inc., the guarantors party thereto, the banks party thereto, Bank of Montreal, as letter of credit issuer, and Harris N.A., as administrative agent.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Alliance Data Systems Corporation
Date: October 28, 2005				By:		/s/ Edward J. Heffernan
						Edward J. Heffernan
						Executive Vice President and
						Chief Financial Officer

EXHIBIT INDEX

EXHIBIT
NUMBER		DESCRIPTION
99.1		THIRD AMENDMENT TO CREDIT AGREEMENT (3- YEAR) dated as of October 28, 2005 by and among Alliance Data Systems Corporation, the guarantor party thereto, the banks party thereto, and Harris N.A., as administrative agent and letter of credit issuer.
99.2		FOURTH AMENDMENT TO CREDIT AGREEMENT (364-DAY) dated as of October 28, 2005 by and among Alliance Data Systems Corporation, the guarantor party thereto, the banks party thereto, and Harris N.A., as administrative agent and letter of credit issuer.
99.3		THIRD AMENDMENT TO CREDIT AGREEMENT (CANADIAN) dated as of October 28, 2005 by and among Loyalty Management Group Canada Inc., the guarantors party thereto, the banks party thereto, Bank of Montreal, as letter of credit issuer, and Harris N.A., as administrative agent.

EXHIBIT 99.1

Third Amendment to
Credit Agreement (3-Year)

     This Third Amendment to Credit Agreement (3-Year) (this “Amendment”) is dated as of October 28, 2005 by and among Alliance Data Systems Corporation (the “Borrower”), the Guarantor party hereto, the Banks party hereto, and Harris N.A., as Administrative Agent and Letter of Credit Issuer.

w i t n e s s e t h:

     Whereas, the Borrower, the Guarantor, the Banks, and the Administrative Agent have heretofore executed and delivered a Credit Agreement (3-Year) dated as of April 10, 2003 (as amended by the First Amendment thereto dated as of October 21, 2004 and the Second Amendment thereto dated as of April 7, 2005, the “Credit Agreement”); and

     Whereas, the Borrower, the Guarantor, the Banks and the Administrative Agent desire to amend the Credit Agreement to (i) increase the aggregate amount to which the Commitments may be increased pursuant to Section 2.16 of the Credit Agreement, (ii) increase the Total Commitments of the Banks by $50,000,000 by adding The Bank of New York as a party to the Credit Agreement with a Commitment of $20,000,000 and Bank of America, N.A. with a Commitment of $30,000,000 and (iii) make certain other amendments to the Credit Agreement as set forth herein;

     Now, Therefore, for good and valuable consideration the receipt of which is hereby acknowledged, the Borrower, the Guarantor, the Banks and the Administrative Agent hereby agree as follows:

     1. Section 2.16 of the Credit Agreement is hereby amended by (i) deleting the amount “$500,000,000” appearing in the eleventh line thereof and inserting in its place the amount “$550,000,000” and (ii) deleting from the first sentence thereof the following: “provided further that prior to approaching an additional Bank, the Borrower shall have offered to the existing Banks the opportunity to increase their respective Commitments.”

     2. Section 6.17 of the Credit Agreement is hereby amended in its entirety and as so amended shall read as follows:

     Section 6.17. Restricted Payments; Required Dividends. (a) Other than payments made in accordance with the terms of subsection (b) below, neither the Borrower nor any of its Subsidiaries will declare or make any Restricted Payment unless, after giving effect thereto, the aggregate of all Restricted Payments declared or made does not exceed (i) $150,000,000 in any calendar year or (ii) the sum of (A) $75,000,000 plus (B) 25% of the amount by which the Consolidated Operating EBITDA of the Borrower exceeds zero (or minus 100% of the amount by which the Consolidated Operating EBITDA of the

Borrower is less than zero) for the period from April 1, 2003 through the end of the Borrower’s then most recent fiscal quarter (treated for this purpose as a single accounting period).

     (b) The Borrower shall cause each Domestic Subsidiary (to the extent permitted under any applicable law, rule or regulation, judgment, injunction, order or decree of any governmental authority) to take all such necessary corporate actions to declare cash dividends, payable to the shareholder of such Subsidiary, in an aggregate amount, if any, equal to all amounts that are then due and owing and remain outstanding after the date of payment therefor pursuant to the terms of this Agreement.

Notwithstanding the foregoing, if a Default or Event of Default exists, neither the Borrower nor any of its Subsidiaries shall make any Restricted Payments to any Person other than to the Borrower or any other Credit Party.

     3.1. The Borrower has requested that from and after the Effective Time (as hereinafter defined) the Total Commitments of the Banks be increased by $50,000,000, with such increase being allocated to The Bank of New York and Bank of America, N.A. (each, a “New Bank”) in the respective amounts set forth on Schedule I to this Amendment. Accordingly, the Commitments of the Banks set forth on Schedule I to the Credit Agreement are hereby amended in their entirety and as so amended shall be as set forth on Schedule I to this Amendment. If any Loans are outstanding under the Credit Agreement as of the Effective Time, the Borrower irrevocably authorizes and directs the Banks to make (nonratably if necessary, but otherwise subject to the terms and conditions of the Credit Agreement as amended hereby) a Base Rate Loan in an amount sufficient to (and the Borrower hereby irrevocably authorizes and directs the Banks to apply such Loan to), pay and discharge the Loans of the Banks (nonratably if necessary) such that the percentage of each Bank’s Commitment in use immediately after giving effect to such application is equal.

     3.2. The term “Banks” as defined in Section 1.1 of the Credit Agreement shall mean and include the Banks currently party to the Credit Agreement and, from and after the Effective Time, the New Banks, each with a Commitment as set forth on Schedule I to this Amendment. Each New Bank agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto. From and after the Effective Time, each New Bank shall have all the rights of a Bank under the Credit Agreement as if it were an original signatory thereto, including all rights with respect to all fees accrued on and after the Effective Time.

     4. This Amendment shall become effective as of the opening of business on October 28, 2005 (the “Effective Time”) subject to the conditions precedent that on or before such date:

     (a) the Administrative Agent shall have received counterparts hereof executed by the Borrower, the Guarantor and the Required Banks;

     (b) the Administrative Agent shall have received certified copies of resolutions of the boards of directors of the Borrower and the Guarantor authorizing the execution and delivery of this Amendment, indicating the authorized signers of this Amendment and the specimen signatures of such signers;

     (c) an opinion of counsel to the Borrower and Guarantor in form reasonably acceptable to the Administrative Agent and covering such matters relating to the transactions contemplated hereby as the Administrative Agent or the Required Banks may reasonably request; and

     (d) the Borrower shall have paid (i) to each Bank which has executed this Amendment on or prior to October 28, 2005 an amendment fee equal to 0.05% of each such Bank’s Commitment and (ii) to the Administrative Agent such other fees as agreed between the Borrower and Administrative Agent.

     5.1. To induce the Administrative Agent and the Banks to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and the Banks that: (a) the representations and warranties contained in the Credit Agreement are true and correct in all material respects as of the date hereof with the same effect as though made on the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date); (b) no Default or Event of Default exists; (c) this Amendment has been duly authorized by all necessary corporate proceedings and duly executed and delivered by the Borrower and the Credit Agreement, as amended by this Amendment, is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity; and (d) no consent, approval, authorization, order, registration or qualification with any governmental authority is required for, and the absence of which would adversely affect, the legal and valid execution and delivery or performance by the Borrower of this Amendment or the performance by the Borrower of the Credit Agreement, as amended by this Amendment.

     5.2. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

     5.3. Except as specifically provided above, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. The execution, delivery, and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of the Administrative Agent or any Bank under the Credit Agreement or any Note, nor constitute a waiver or modification of any provision of any of the Credit Agreement or any Note.

     5.4. This Amendment and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of New York.

[Signature Pages to follow]

     In Witness Whereof, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

		Alliance Data Systems Corporation, as
				Borrower
		By		/s/ Robert P. Armiak
				Name		Robert P. Armiak
				Title		SVP and Treasurer
		ADS Alliance Data Systems, Inc., as a
				Guarantor
		By		/s/ Robert P. Armiak
				Name		Robert P. Armiak
				Title		SVP and Treasurer

[Third Amendment 3-Year]

		Harris N.A. (successor by merger with Harris Trust and
				Savings Bank), individually, as Letter of Credit Issuer and as Administrative Agent
		By		/s/ Mark W. Piekos
				Name		Mark W. Piekos
				Title		Director

[Third Amendment 3-Year]

		SunTrust Bank
		By		/s/ Brian K. Peters
				Name		Brian K. Peters
				Title		Managing Director

[Third Amendment 3-Year]

		Wachovia Bank, N.A.
		By		/s/ Karin E. Samuel
				Name		Karin E. Samuel
				Title		Vice President

[Third Amendment 3-Year]

		JPMorgan Chase Bank, N. A.
		By		/s/ Brian McDougal
				Name		Brian McDougal
				Title		Vice President

[Third Amendment 3-Year]

		Huntington National Bank
		By		/s/ Staven P. Clemens
				Name		Staven P. Clemens
				Title		Vice President

[Third Amendment 3-Year]

		Bear Stearns Corporate Lending, Inc.
		By		/s/ Victor Bulzacchelli
				Name		Victor Bulzacchelli
				Title		Vice President

[Third Amendment 3-Year]

		Credit Suisse, Cayman Islands Branch(f/k/a Credit Suisse          First Boston, acting through its Cayman Islands          Branch)
		By		/s/ Alain Daoust
				Name		Alain Daoust
				Title		Director
		By		/s/ James Neira
				Name		James Neira
				Title		Associate

[Third Amendment 3-Year]

		US Bank National Association
		By		/s/ Kevin S. McFadden
				Name		Kevin S. McFadden
				Title		Vice President

[Third Amendment 3-Year]

		Union Bank of California, N.A.
		By		/s/ Christine Davis
				Name		Christine Davis
				Title		Vice President

[Third Amendment 3-Year]

		Fifth Third Bank (Central Ohio)
		By		/s/ Christopher D. Jones
				Name		Christopher D. Jones
				Title		Vice President

[Third Amendment 3-Year]

		Barclays Bank PLC
		By		/s/ Alison McGulgan
				Name		Alison McGulgan
				Title		Associate Director

[Third Amendment 3-Year]

		The Bank of New York
		By		/s/ Kenneth R. McDonnell
				Name		Kenneth R. McDonnell
				Title		Vice President

[Third Amendment 3-Year]

		Bank of America, N.A.
		By		/s/ Steven A. Mackenzie
				Name		Steven A. Mackenzie
				Title		Senior Vice President

[Third Amendment 3-Year]

EXHIBIT 99.2

Fourth Amendment to

Credit Agreement (364-Day)

     This Fourth Amendment to Credit Agreement (364-Day) (this “Amendment”) is dated as of October 28, 2005 by and among Alliance Data Systems Corporation (the “Borrower”), the Guarantor party hereto, the Banks party hereto, and Harris N.A., as Administrative Agent and Letter of Credit Issuer.

w i t n e s s e t h:

     Whereas, the Borrower, the Guarantor, the Banks, and the Administrative Agent have heretofore executed and delivered a Credit Agreement (364-Day) dated as of April 10, 2003 (as amended by the First Amendment thereto dated as of April 8, 2004, the Second Amendment thereto dated as of October 21, 2004 and the Third Amendment thereto dated as of April 7, 2005, the “Credit Agreement”); and

     Whereas, the Borrower, the Guarantor, the Banks and the Administrative Agent desire to amend the Credit Agreement to (i) increase the aggregate amount to which the Commitments may be increased pursuant to Section 2.16 of the Credit Agreement, (ii) increase the Total Commitments of the Banks by $25,000,000 by adding The Bank of New York as a party to the Credit Agreement with a Commitment of $10,000,000 and Bank of America, N.A. with a Commitment of $15,000,000 and (iii) make certain other amendments to the Credit Agreement as set forth herein;

     Now, Therefore, for good and valuable consideration the receipt of which is hereby acknowledged, the Borrower, the Guarantor, the Banks and the Administrative Agent hereby agree as follows:

     1. Section 2.16 of the Credit Agreement is hereby amended by (i) deleting the amount “$500,000,000” appearing in the eleventh line thereof and inserting in its place the amount “$550,000,000” and (ii) deleting from the first sentence thereof the following: “provided further that prior to approaching an additional Bank, the Borrower shall have offered to the existing Banks the opportunity to increase their respective Commitments.”

     2. Section 6.17 of the Credit Agreement is hereby amended in its entirety and as so amended shall read as follows:

     Section 6.17. Restricted Payments; Required Dividends. (a) Other than payments made in accordance with the terms of subsection (b) below, neither the Borrower nor any of its Subsidiaries will declare or make any Restricted Payment unless, after giving effect thereto, the aggregate of all Restricted Payments declared or made does not exceed (i) $150,000,000 in any calendar year or (ii) the sum of (A) $75,000,000 plus (B) 25% of the amount by which the Consolidated Operating EBITDA of the

Borrower exceeds zero (or minus 100% of the amount by which the Consolidated Operating EBITDA of the Borrower is less than zero) for the period from April 1, 2003 through the end of the Borrower’s then most recent fiscal quarter (treated for this purpose as a single accounting period).

     (b) The Borrower shall cause each Domestic Subsidiary (to the extent permitted under any applicable law, rule or regulation, judgment, injunction, order or decree of any governmental authority) to take all such necessary corporate actions to declare cash dividends, payable to the shareholder of such Subsidiary, in an aggregate amount, if any, equal to all amounts that are then due and owing and remain outstanding after the date of payment therefor pursuant to the terms of this Agreement.

Notwithstanding the foregoing, if a Default or Event of Default exists, neither the Borrower nor any of its Subsidiaries shall make any Restricted Payments to any Person other than to the Borrower or any other Credit Party.

     3.1. The Borrower has requested that from and after the Effective Time (as hereinafter defined) the Total Commitments of the Banks be increased by $25,000,000, with such increase being allocated to The Bank of New York and Bank of America, N.A. (each, a “New Bank”) in the respective amounts set forth on Schedule I to this Amendment. Accordingly, the Commitments of the Banks set forth on Schedule I to the Credit Agreement are hereby amended in their entirety and as so amended shall be as set forth on Schedule I to this Amendment. If any Loans are outstanding under the Credit Agreement as of the Effective Time, the Borrower irrevocably authorizes and directs the Banks to make (nonratably if necessary, but otherwise subject to the terms and conditions of the Credit Agreement as amended hereby) a Base Rate Loan in an amount sufficient to (and the Borrower hereby irrevocably authorizes and directs the Banks to apply such Loan to), pay and discharge the Loans of the Banks (nonratably if necessary) such that the percentage of each Bank’s Commitment in use immediately after giving effect to such application is equal.

     3.2. The term “Banks” as defined in Section 1.1 of the Credit Agreement shall mean and include the Banks currently party to the Credit Agreement and, from and after the Effective Time, the New Banks, each with a Commitment as set forth on Schedule I to this Amendment. Each New Bank agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto. From and after the Effective Time, each New Bank shall have all the rights of a Bank under the Credit Agreement as if it were an original signatory thereto, including all rights with respect to all fees accrued on and after the Effective Time.

     4. This Amendment shall become effective as of the opening of business on October 28, 2005 (the “Effective Time”) subject to the conditions precedent that on or before such date:

     (a) the Administrative Agent shall have received counterparts hereof executed by the Borrower, the Guarantor and the Required Banks;

     (b) the Administrative Agent shall have received certified copies of resolutions of the boards of directors of the Borrower and the Guarantor authorizing the execution and delivery of this Amendment, indicating the authorized signers of this Amendment and the specimen signatures of such signers;

     (c) an opinion of counsel to the Borrower and Guarantor in form reasonably acceptable to the Administrative Agent and covering such matters relating to the transactions contemplated hereby as the Administrative Agent or the Required Banks may reasonably request; and

     (d) the Borrower shall have paid (i) to each Bank which has executed this Amendment on or prior to October 28, 2005 an amendment fee equal to 0.05% of each such Bank’s Commitment and (ii) to the Administrative Agent such other fees as agreed between the Borrower and Administrative Agent.

     5.1. To induce the Administrative Agent and the Banks to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and the Banks that: (a) the representations and warranties contained in the Credit Agreement are true and correct in all material respects as of the date hereof with the same effect as though made on the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date); (b) no Default or Event of Default exists; (c) this Amendment has been duly authorized by all necessary corporate proceedings and duly executed and delivered by the Borrower and the Credit Agreement, as amended by this Amendment, is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity; and (d) no consent, approval, authorization, order, registration or qualification with any governmental authority is required for, and the absence of which would adversely affect, the legal and valid execution and delivery or performance by the Borrower of this Amendment or the performance by the Borrower of the Credit Agreement, as amended by this Amendment.

     5.2. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

     5.3. Except as specifically provided above, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. The execution, delivery, and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of the Administrative Agent or any Bank under the Credit Agreement or any Note, nor constitute a waiver or modification of any provision of any of the Credit Agreement or any Note.

     5.4. This Amendment and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of New York.

[Signature Pages to follow]

     In Witness Whereof, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

		Alliance Data Systems Corporation, as
				Borrower
		By		/s/ Robert P. Armiak
				Name Robert P. Armiak
				Title   SVP and Treasurer
		ADS Alliance Data Systems, Inc., as a
				Guarantor
		By		/s/ Robert P. Armiak
				Name Robert P. Armiak
				Title   SVP and Treasurer

		S-1		[Fourth Amendment 364-Day]

		Harris N.A. (successor by merger with Harris
				Trust and Savings Bank), individually, as
				Letter of Credit Issuer and as Administrative
				Agent
		By		/s/ Mark W. Piekos
				Name		Mark W. Piekos
				Title		Director

				[Fourth Amendment 364-Day]

		SunTrust Bank
		By		/s/ Brian K. Peters
				Name		Brian K. Peters
				Title		Managing Director

				[Fourth Amendment 364-Day]

		Wachovia Bank, N.A.
		By		/s/ Karin E. Samuel
				Name		Karin E. Samuel
				Title		Vice President

				[Fourth Amendment 364-Day]

		JPMorgan Chase Bank, N.A.
		By		/s/ Brian McDougal
				Name		Brian McDougal
				Title		Vice President

				[Fourth Amendment 364-Day]

		Huntington National Bank
		By		/s/ Steven P. Clemens
				Name		Steven P. Clemens
				Title		Vice President

				[Fourth Amendment 364-Day]

		Credit Suisse, Cayman Islands Branch (f/k/a
				Credit Suisse First Boston, acting through its
				Cayman Islands Branch)
		By		/s/ Alain Daoust
				Name		Alain Daoust
				Title		Director
		By		James Neira
				Name		James Neira
				Title		Associate

				[Fourth Amendment 364-Day]

		US Bank National Association
		By		/s/ Kevin S. McFadden
				Name		Kevin S. McFadden
				Title		Vice President

				[Fourth Amendment 364-Day]

		Union Bank of California, N.A.
		By		Christine Davis
				Name		Christine Davis
				Title		Vice President

				[Fourth Amendment 364-Day]

		Fifth Third Bank (Central Ohio)
		By		/s/ Chkistopher D. Jones
				Name		Chkistopher D. Jones
				Title		Vice President

				[Fourth Amendment 364-Day]

		Barclays Bank PLC
		By		/s/ Alison McGulgan
				Name		Alison McGulgan
				Title		Associate Director

				[Fourth Amendment 364-Day]

		The Bank of New York
		By		/s/ Kennedh R. McDonnell
				Name		Kennedh R. McDonnell
				Title		Vice President

				[Fourth Amendment 364-Day]

		Bank of America, N.A.
		By		/s/ Steven A. Mackenzie
				Name		Steven A. Mackenzie
				Title		Senior Vice President

				[Fourth Amendment 364-Day]

		Bank Hapoalim
		By		/s/ James P. Surless
				Name		James P. Surless
				Title		Vice President
		By		/s/ Charles McLaughlin
				Name		Charles McLaughlin
				Title		Senior Vice President

				[Fourth Amendment 364-Day]

EXHIBIT 99.3

Third Amendment to
Credit Agreement (Canadian)

     This Third Amendment to Credit Agreement (Canadian) (this “Amendment”) is dated as of October 28, 2005 by and among Loyalty Management Group Canada Inc. (the “Borrower”), the Guarantors party hereto, the Banks party hereto, Bank of Montreal, as Letter of Credit Issuer and Harris N.A., as Administrative Agent.

w i t n e s s e t h:

     Whereas, the Borrower, the Guarantors, the Banks, and the Administrative Agent have heretofore executed and delivered a Credit Agreement (Canadian) dated as of April 10, 2003 (as amended by the First Amendment thereto dated as of October 21, 2004, and a Second Amendment thereto dated as of April 7, 2005 the “Credit Agreement”); and

     Whereas, the Borrower, the Guarantors, the Banks and the Administrative Agent desire to (i) increase the aggregate amount to which the Commitments may be increased pursuant to Section 2.15 of Credit Agreement and (ii) to make certain other amendments to the Credit Agreement as set forth herein;

     Now, Therefore, for good and valuable consideration the receipt of which is hereby acknowledged, the Borrower, the Guarantors, the Banks and the Administrative Agent hereby agree as follows:

     1. Section 2.15 of the Credit Agreement is hereby amended by (i) deleting the amount “$500,000,000” appearing in the eleventh line thereof and inserting in its place the amount “$550,000,000” and (ii) deleting from the first sentence thereof the following: “provided further that prior to approaching an additional Bank, the Borrower shall have offered to the existing Banks the opportunity to increase their respective Commitments.”

     2. Section 6.17 of the Credit Agreement is hereby amended in its entirety and as so amended shall read as follows:

     Section 6.17. Restricted Payments; Required Dividends. (a) Other than payments made in accordance with the terms of subsection (b) below, neither ADSC nor any of its Subsidiaries will declare or make any Restricted Payment unless, after giving effect thereto, the aggregate of all Restricted Payments declared or made does not exceed (i) $150,000,000 in any calendar year or (ii) the sum of (A) $75,000,000 plus (B) 25% of the amount by which the Consolidated Operating EBITDA of ADSC exceeds zero (or minus 100% of the amount by which the Consolidated Operating EBITDA of ADSC is less than zero) for the period from April 1,

2003 through the end of ADSC’s then most recent fiscal quarter (treated for this purpose as a single accounting period).

     (b) ADSC shall cause each Domestic Subsidiary (to the extent permitted under any applicable law, rule or regulation, judgment, injunction, order or decree of any governmental authority) to take all such necessary corporate actions to declare cash dividends, payable to the shareholder of such Subsidiary, in an aggregate amount, if any, equal to all amounts that are then due and owing and remain outstanding after the date of payment therefor pursuant to the terms of this Agreement.

Notwithstanding the foregoing, if a Default or Event of Default exists, neither ADSC nor any of its Subsidiaries shall make any Restricted Payments to any Person other than to ADSC or any other Credit Party.

     3. This Amendment shall become effective as of the opening of business on October 28, 2005 (the “Effective Time”) subject to the conditions precedent that on or before such date:

     (a) the Administrative Agent shall have received counterparts hereof executed by the Borrower, the Guarantors and the Banks;

     (b) the Administrative Agent shall have received certified copies of resolutions of the boards of directors of the Borrower and the Guarantors authorizing the execution and delivery of this Amendment, indicating the authorized signers of this Amendment and the specimen signatures of such signers;

     (c) opinions of counsel to the Borrower and Guarantor in form reasonably acceptable to the Administrative Agent and covering such matters relating to the transactions contemplated hereby as the Administrative Agent or the Required Banks may reasonably request; and

     (d) the Borrower shall have paid (i) to each Bank which has executed this Amendment on or prior to October 28, 2005 an amendment fee equal to 0.05% of each such Bank’s Commitment and (ii) to the Administrative Agent such other fees as agreed between the Borrower and Administrative Agent.

     4.1. To induce the Administrative Agent and the Banks to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and the Banks that: (a) the representations and warranties contained in the Credit Agreement are true and correct in all

material respects as of the date hereof with the same effect as though made on the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date); (b) no Default or Event of Default exists; (c) this Amendment has been duly authorized by all necessary corporate proceedings and duly executed and delivered by the Borrower and the Credit Agreement, as amended by this Amendment, is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity; and (d) no consent, approval, authorization, order, registration or qualification with any governmental authority is required for, and the absence of which would adversely affect, the legal and valid execution and delivery or performance by the Borrower of this Amendment or the performance by the Borrower of the Credit Agreement, as amended by this Amendment.

     4.2. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

     4.3. Except as specifically provided above, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. The execution, delivery, and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of the Administrative Agent or any Bank under the Credit Agreement or any Note, nor constitute a waiver or modification of any provision of any of the Credit Agreement or any Note.

     4.4. This Amendment and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of New York.

[Signature Pages to follow]

     In Witness Whereof, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

		Loyalty Management Group Canada Inc., as Borrower
		By		/s/ Robert P. Armiak   Name Robert P. Armiak
				Title   SVP and Treasurer
		Alliance Data Systems Corporation, as a Guarantor
		By		/s/ Robert P. Armiak   Name Robert P. Armiak
				Title   SVP and Treasurer
		ADS Alliance Data Systems, Inc., as a Guarantor
		By		/s/ Robert P. Armiak   Name Robert P. Armiak
				Title   SVP and Treasurer

[Third Amendment Canadian]

 S-1

		Harris N.A. (successor by merger with
		Harris Trust and Savings Bank), as
		Administrative Agent
		By		/s/ Mark W. Piekos
				Name	Mark W. Piekos
				Title	Director

[Third Amendment Canadian]

 S-2

		Bank of Montreal, individually and as Letter of Credit Issuer
		By		/s/ B. Ciabella
				Name		B. Ciabella
				Title

[Third Amendment Canadian]

 S-3

		JPMorgan Chase Bank
		By		/s/ Brian McDaugal
				Name		Brian McDaugal
				Title		Vice President

[Third Amendment Canadian]

 S-4