Affinion Group, Inc.

10-K
Annual report pursuant to section 13 and 15(d) Filed on 03/04/2011 Filed Period 12/31/2010

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010. OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .

Commission file number: 333-133895

AFFINION GROUP, INC.

(Exact name of Registrant as specified in its charter) Delaware
(State or other jurisdiction of incorporation or organization)

16-1732152
(I.R.S. Employer Identification Number)

6 High Ridge Park Stamford, CT 06905

(Address, including zip code, of principal executive offices)

(203) 956-1000
(Registrant's telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act: None Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No x Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large Accelerated Filer Non-Accelerated Filer x (Do not check if a smaller reporting company) Accelerated Filer Smaller Reporting Company Yes No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the close of business on June 30, 2010 was zero. The number of shares outstanding of the registrant's common stock, $0.01 par value, as of March 1, 2011 was 100. DOCUMENTS INCORPORATED BY REFERENCE: None

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PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14. Item 15.

Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings (Removed and Reserved) Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits, Financial Statement Schedules

1 1 20 31 32 32 34 35 35 35 36 63 65 66 66 69 69 69 73 91 94 100 101

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PART I Unless the context otherwise requires or indicates, all references to "Affinion," the "Company," "we," "our" and "us" refer to Affinion Group, Inc., a Delaware corporation, and its subsidiaries (which for periods after January 14, 2011, includes Webloyalty (as defined below)) on a consolidated basis after giving effect to the consummation on October 17, 2005 of the acquisition (the "Acquisition") by Affinion Group, Inc. of Affinion Group, LLC (known as Cendant Marketing Group, LLC prior to the consummation of the Acquisition) ("AGLLC") and Affinion International Holdings Limited (known as Cendant International Holdings Limited prior to the consummation of the Acquisition) ("AIH") and the other transactions described in this Annual Report on Form 10-K under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe Transactions," but for periods prior to the Acquisition, refer to the historical operations of Cendant Marketing Services Division (a division of Cendant Corporation) (the "Predecessor") that we acquired in the Acquisition, all references to "Holdings" refer to our parent company, Affinion Group Holdings, Inc., a Delaware corporation, and all references to "fiscal year" are to the twelve months ended December 31 of the year referenced. In addition, a glossary of terms used in this Report to describe our business has been provided. See "Glossary." Business

Item 1.

The following description of our business is current as of December 31, 2010 and does not give effect to or incorporate any subsequent events unless otherwise noted. Overview We are a global leader in the designing, marketing and servicing of comprehensive customer engagement and loyalty solutions that enhance and extend the relationship of millions of consumers with many of the largest and most respected companies in the world. We partner with these leading companies to develop and market subscription-based programs that provide valuable services to their end-customers using our expertise in customer engagement, product development, creative design and data-driven targeted marketing. These programs and services enable the companies we partner with to generate significant, high-margin incremental revenue, as well as strengthen and enhance the loyalty of their customer relationships, which can lead to increased acquisition of new customers, longer retention of existing customers, improved customer satisfaction rates, and greater use of other services provided by such companies. We refer to the leading companies that we work with to provide customer engagement and loyalty solutions as our marketing partners. We refer to subscribers or members as those consumers to whom we provide services directly and have a contractual relationship. We refer to end-customers as those consumers that we service on behalf of a third party, such as one of our marketing partners, with whom we have a contractual relationship. We utilize our substantial expertise in a variety of direct engagement media, such as direct mail, inbound and outbound telephony, point-of-sale marketing, direct response radio and television and the Internet to market valuable products and services to the customers of our marketing partners on a highly targeted basis. We design customer engagement and loyalty solutions with an attractive suite of benefits that we believe are likely to interest and engage consumers based on their needs and interests, with a particular focus on programs offering lifestyle and protection benefits and programs which offer considerable savings. For example, we provide credit monitoring and identity-theft resolution, accidental death and dismemberment insurance ("AD&D"), discount travel services, loyalty points programs, various checking account and credit card enhancement services, as well as other products and services. We believe our portfolio of the products and services which are embedded in our engagement solutions is the broadest in the industry. Our scale, combined with the industry's largest proprietary database, proven marketing techniques and strong marketing partner relationships developed over our 35 year history, position us to deliver consistent results in a variety of market conditions. 1

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Our comprehensive portfolio of customer engagement and loyalty solutions include: marketing strategy development and management of customized marketing programs; data analysis utilizing our proprietary technology and databases to target customers most likely to value our products and services; design and implementation of marketing campaigns in various types of media including direct mail, online marketing, point-of-sale marketing, direct response radio and television marketing, inbound and outbound telephony and voice response unit marketing; development of customized and relevant products and services; fulfillment, customer service, website and mobile application development; and loyalty program design and administration.

Our business model is characterized by substantial recurring revenues, strong operating margins and significant cash flow. We generate revenues primarily through the sale of our value-added subscription-based products and services to the end-customers of our marketing partners and customers whom we bill on a monthly, quarterly or annual basis. Further, we generate revenues from our marketing partners that choose to directly market our products and services to their customers on a wholesale basis and typically pay us a monthly fee per enrolled customer. We also generate revenues through our loyalty customer engagement business by designing and administering points-based loyalty programs. As a result, a substantial portion of our revenues consists of subscription payments and service fees that are recurring in nature. Revenue from our existing customer base and long-term marketing partner relationships has historically generated over 80% of our next twelve months net revenue. We structure our contractual relationships with our marketing partners to support our strategy of pursuing the most profitable opportunities for our marketing, and related commission, expenditures. Business We seek to address the needs of three primary parties in developing and implementing our customer engagement and loyalty solutions: Marketing partners, which are the companies for whom we develop and manage customer engagement and loyalty programs; Customers, which are the end-customers of our marketing partners who subscribe to one or more of our programs; and Vendors, which are the third-party vendors who provide components for our products and services.

Marketing Partners: Our marketing partners are many of the leading companies in the United States, or the U.S., and Europe. They enter into agreements with us to: offer products and services that appeal to their customers, thereby engaging those customers in a deeper, more meaningful, longer and more profitable relationship with them; and develop customized marketing programs that leverage their brand names to offer these programs and services to their customers.

Our marketing partners value our services because we enhance their customer relationships and strengthen customer loyalty, promote their brands and provide them with incremental revenue with minimal risk because we often bear the costs of marketing and servicing these programs. We believe that we implement and operate our customer engagement and loyalty programs more effectively than a typical partner could in a stand-alone program, thereby allowing our marketing partners to focus on their core businesses. As of December 31, 2010, we had more than 5,550 marketing partners in a variety of industries including financial services, retail, travel, telecommunications, utilities and the Internet. Some of our leading marketing partners, based on revenues for the year ended December 31, 2010, include Wells Fargo, Bank of America, JPMorgan Chase, HSBC and Choice Hotels. Revenues generated from our largest marketing partner, Wells Fargo, accounted for 11.4% of total revenues in 2010. 2

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By providing services directly to the end-customers of our marketing partners, we become an important part of our marketing partners' businesses. Many of our marketing partners have been working with us for over ten years. Customers: Our customers value participation in our programs because of the attractive benefits we provide to address fundamental consumer needs at a reasonable price, the ease of use of our products and the high level of service we deliver. Depending on the nature of the relationship we have with a given marketing partner, customers may either purchase our programs directly from us or receive the program from our marketing partner. We derived approximately 49.4% of our net revenues from members and end-customers we obtained through our 10 largest marketing partners. As of December 31, 2010, we had approximately 69 million subscribers and end-customers enrolled in our membership, insurance and package programs worldwide and approximately 111 million customers who received credit or debit card enhancement services or loyalty points-based management services. Vendors: We contract with a large number of third-party vendors to provide components for many of our products and services, such as credit reports, supplemental insurance coverage and travel discounts. Our vendors value their relationships with us because we provide them with significant incremental revenue by bundling their content with our own and offering these solutions through unique and supplementary marketing channels. Generally, our relationships with key vendors are governed by long-term contracts. By combining the services of our vendors with our in-house capabilities, we are able to offer 31 core products and services with over 460 unique benefits and support more than 5,100 versions of products and services representing different combinations of pricing, benefits configurations and branding. We organize our business into two operating units: Affinion North America. Affinion North America comprises our Membership, Insurance and Package, and Loyalty customer engagement businesses in North America. Membership Products. We design, implement and market subscription programs that provide members with personal protection benefits and value-added services including credit monitoring and identity-theft resolution services as well as access to a variety of discounts and shop-athome conveniences in such areas as retail merchandise, travel, automotive and home improvement. Insurance and Package Products. We market AD&D and other insurance programs and design and provide checking account enhancement programs to financial institutions. These programs allow financial institutions to bundle valuable discounts, protection and other benefits with a standard checking account and offer these packages to customers for an additional monthly fee. Loyalty Products. We design, implement and administer points-based loyalty programs and, as of December 31, 2010, managed approximately 497 billion points with an estimated redemption value of approximately $4.9 billion for financial, travel, auto and other companies. We also provide enhancement benefits to major financial institutions in connection with their credit and debit card programs. In addition, we provide and manage travel reward products for loyalty programs.

Affinion International. Affinion International comprises our Membership, Package and Loyalty customer engagement businesses outside North America. We expect to leverage our current international operational platform to expand our range of products and services, develop new marketing partner relationships in various industries and grow our geographical footprint. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsOperating Segment Results" and Note 16 to our audited consolidated financial statements included elsewhere herein for additional financial information about these business segments. In addition, see Note 16 to our audited consolidated financial statements included elsewhere herein for additional financial information by geographic area. Business Model Our business model is characterized by substantial recurring revenues, strong operating margins and significant cash flow. We generate revenues primarily through the sale of our value-added subscription-based products and services to the end-customers of our marketing partners and customers whom we bill on a monthly, quarterly or annual basis. Further, we 3

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generate revenues from our marketing partners that choose to directly market our products and services to their customers on a wholesale basis and typically pay us a monthly fee per enrolled customer. We also generate revenues through our loyalty customer engagement business by designing and administering points-based loyalty programs. As a result, a substantial portion of our revenues consists of subscription payments and service fees that are recurring in nature. Revenue from our existing customer base has historically generated over 80% of our next twelve months net revenue. We structure our contractual relationships with our marketing partners to support our strategy of pursuing the most profitable opportunities for our marketing, and related commission, expenditures. Recent Developments Acquisition of Webloyalty On January 14, 2011, the Company and Holdings entered into, and consummated, an Agreement and Plan of Merger that resulted in Affinion's indirect acquisition of all of the capital stock of Webloyalty Holdings, Inc. ("Webloyalty") and the conversion of Webloyalty securities into Holdings securities. Webloyalty is a leading online marketing services company. Webloyalty provides, designs, and administers online subscription loyalty solutions that offer valuable discounts, services and benefits for its subscribers and provides its clients with programs that enhance their relationship with their customers. In addition to its domestic services, Webloyalty operates in several countries in Europe. In connection with the Webloyalty acquisition, Webloyalty and its 1 domestic subsidiaries have become guarantors under our senior secured credit facility, the indentures governing our 7.875% senior notes and 11 /2% senior subordinated notes and the indenture governing Holdings' notes. As a result of the Merger, (i) Affinion Group Holdings, LLC ("Parent LLC"), which is an affiliate of Apollo Global Management, LLC ("Apollo"), and Holdings' existing management investors collectively own approximately 70.4% of Holdings' issued and outstanding common stock; (ii) certain investment partnerships sponsored by General Atlantic LLC (collectively, "General Atlantic") collectively own approximately 20.6% of Holdings' issued and outstanding common stock; and (iii) other former holders of Webloyalty common stock collectively own approximately 9.0% of Holdings' issued and outstanding common stock. Competitive Strengths We generally offer our products and services through affinity marketing relationships, which is a subset of the larger direct marketing industry. Affinity marketing involves marketing products and services to a marketing partner's base of customers. This generally results in higher customer receptiveness as those customers recognize and trust the marketing partner and its brands. In addition, incorporating our marketing partners' logos and trademarks in our marketing materials, or co-branding with our marketing partners, provides customers with additional assurances and validation as to the quality of the program or service we are offering. We believe that marketing associated with well-known brands of leading, well-respected companies provides a significant advantage over other forms of direct marketing. We attribute our success and competitive advantage in providing comprehensive customer engagement and loyalty solutions and marketing services to our ability to leverage a number of key strengths, including: Proprietary Technology, Models and Databases. Based on the length of our operating history, we believe our database of actual customer interactions, with approximately 1.2 billion unique records, is the largest and most comprehensive in the industry and cannot be replicated. We track the performance of all of our marketing campaigns across all different media and measure consumer preferences, response rates, and other engagement-related performance and profitability data while adhering to the highest standards of consumer data protection and privacy. We utilize this data to develop highly targeted, individualized marketing programs across multiple media and product offerings for each partner with the goal of strengthening their customer relationships and more precisely identifying types of customers likely to find our products and services of value. We believe our proprietary database increases the efficacy of our marketing, enhances the profitability of our marketing expenditures, allows us to better engage with customers, and helps us to continue to secure and maintain long-term relationships with marketing partners. Expertise in Various Marketing Methods and Types of Media. We have conducted more than 101,000 customer engagement and loyalty program marketing campaigns over the last ten years. We utilize a variety of direct engagement media to market our programs and services, including direct mail, online marketing, point-of-sale marketing, direct response and television marketing, inbound and outbound telephony and voice response unit marketing. We operate a full-service creative agency with expertise in utilizing a wide variety of customer acquisition media. 4

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We believe that our expertise provides our marketing partners substantial flexibility in managing and enhancing their customer relationships and provides superior returns on our marketing expenditures. Strong, Long-Term Relationships with Marketing Partners. We have a long history of providing comprehensive customer engagement and loyalty solutions and marketing services to leading companies in the U.S. and Europe. We believe that the strength and breadth of our relationships with our marketing partners provide us with a competitive advantage in maintaining stable, diversified and predictable sources of revenue. Our relationships span a wide variety of industries, such as financial, retail, travel, telecommunications, utilities, and the Internet and other media. We believe that our strong network of marketing partner relationships, together with our success in delivering customized, revenue enhancing customer engagement and loyalty programs, will enable us to continue to grow our business and generate new marketing partner relationships. Expertise in Developing Valuable, Relevant Products. We manage a broad range of membership, package and insurance benefits which are embedded into the customer engagement and loyalty solutions we market to the customers of our marketing partners. Our products are designed to address consumer needs and incorporate a range of lifestyle and valuable protection benefits related to insurance, travel, health care, automotive, identity theft protection, entertainment, shopping and loyalty rewards, among other things. We continually research, develop and test new products and benefits that are relevant to customers and build loyalty and value for our marketing partners. We market both our own customer engagement and loyalty solutions as well as those of our marketing partners, where appropriate, to meet customer needs. We believe that our ability to customize products utilizing the broad range of benefits that we provide enables us to better meet the complex and highly specialized customer engagement needs of our marketing partners and our customers. We believe that our ability to identify and successfully enter new product and growth areas is a key competitive advantage and we will continue to seek new opportunities to expand the range of our proprietary product offerings. Diversified, Global Marketing Platform. Because we have marketing capabilities in 14 countries outside of the U.S., with a significant and longstanding presence in the majority of Europe's largest markets, we are able to provide our customer engagement and loyalty solutions on a global basis to better serve our marketing partners who may have operations and customers in multiple countries. We benefit from the substantial synergies generated across all of our operations, including the ability to leverage our customer engagement, marketing, loyalty and product expertise. We believe that our ability to focus our business development and marketing expenditures on our most profitable marketing opportunities in the most attractive markets, media and industries, domestically and internationally, is a key advantage that allows us to maximize our profitability and cash flows. Attractive Operating Model with Significant Free Cash Flow Generation. We derive a substantial portion of our revenues on a recurring basis from our marketing partners and their customers. Our business requires very little capital to support our growth, and annual capital expenditures typically represent a small percentage of our revenues. In addition, we benefit from certain tax attributes under 338(h)(10) of the Internal Revenue Code that will reduce our cash taxes in the future and further enhance our ability to generate strong, recurring cash flows. Tax deductions remaining under this provision as of December 31, 2010 amounted to approximately $1.2 billion and are expected to result in deductions of up to approximately $120.0 million per year for the next ten years. Consequently, we benefit from high predictability in the operation of our business, low volatility in our revenues and earnings, and enhanced ability to manage our business, service our indebtedness and pay dividends to stockholders. Committed and Experienced Management Team. We believe that our senior management and our talented and experienced professionals are a principal reason why we have achieved significant success in all of our businesses. Led by our Chairman and Chief Executive Officer, Nathaniel J. Lipman, who has been with us for over eleven years, each of our senior operating executives has more than ten years of relevant industry experience in senior positions. We believe that the extensive experience and financial acumen of our management and marketing professionals provide us with a significant competitive advantage. Competition We are a leading affinity marketer of value-added membership, insurance and package enhancement programs and services with a network of more than 5,550 marketing partners as of December 31, 2010, approximately 69 million membership, insurance and package subscribers and end-customers enrolled in our programs worldwide and approximately 111 million customers who received credit or debit card enhancement services and loyalty pointsbased management services as of December 31, 2010. Our leadership position in the growing affinity marketing industry is due to our 35-year track 5

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record, our experience from over 101,000 customer engagement and loyalty program marketing campaigns conducted over the last decade and our core strengths in the areas of multi-media marketing, data analytics, customer service and operations. We also believe our portfolio of programs and benefits is the broadest in the industry. At December 31, 2010, we offered 31 core products and services with over 460 unique benefits and supported more than 5,100 versions of products and services representing different combinations of pricing, benefit configurations and branding. Our competitors include any company seeking direct and regular access to large groups of customers through any affinity-based direct media contact. Our products and services compete with those marketed by financial institutions and other third parties who have marketing relationships with our competition, including large, fully integrated companies that have financial, marketing and product development resources that are greater than ours. We face competition in all areas of our business, including price, product offerings and product performance. As a whole, the direct marketing services industry is extremely fragmented, with over 3,100 providers of various services. Most of these companies are relatively small and provide a limited array of products and services. In general, competition for the consumer's attention is intense, with a wide variety of players competing in different segments of the direct marketing industry. More specifically, competition within our business lines comes from companies that vary significantly in size, scope and primary core competencies. Membership Products. The membership services industry is characterized by a high degree of competition. Participants in this industry include membership services companies, such as United Marketing Group, Encore, Synapse, Vertrue, and Intersections, as well as large retailers, travel agencies, insurance companies and financial service institutions. Insurance and Package Products. Participants in the U.S. in the direct marketing of insurance programs include Aegon, Coverdell (a unit of Vertrue), AIG, Assurant, CUNA, UnumProvident and Securian. The U.S. package enhancement operation faces competition from both direct marketing companies and financial institutions that choose to provide package enhancement programs in-house. Some of the direct marketers that participate in this space include Sisk, Generations Gold, Econocheck and Strategy Corp. Loyalty Products. Examples of participants in the loyalty arena provide in-house rewards programs and utilize third-party providers. Such third-party providers design, market and manage rewards-based loyalty programs for businesses that either have no desire to manage such programs or lack the core competencies necessary to compete in the industry effectively. Key industry participants include Maritz Loyalty Marketing, Carlson Marketing Group and Enhancement Services Corporation. International Products. In Europe, on the membership side of the business, participants include Card Protection Plan across multiple markets, as well as large retailers, travel agencies, insurance companies and financial service institutions. Key competitors in the package enhancement business include Card Protection Plan, MobileServ Limited, and Lifestyle Service Group in the United Kingdom, or the U.K., Quintess in France, Europe Assistance and Jakala in Italy, and Sreg MehrWert Servicegesellschaft and Payback in Central Europe. Our Business Strategy Our strategy is to pursue initiatives that maintain and enhance our position as a global leader in the designing, marketing and servicing of comprehensive customer engagement and loyalty solutions that enhance and extend the relationship of millions of consumers with our marketing partners and to focus on attractive opportunities that will increase our profitability and cash flows. The key elements of our strategy are: Optimize Our Marketing Investment. Our ability to adjust and optimize the allocation of our marketing expenditures across all of our marketing partners, media channels, products and geographic regions will help us continue to maximize the returns on each customer engagement and loyalty services marketing campaign. We target minimum returns on investment for all of our marketing expenditures, incorporating the expected revenues, persistency of customer tenure, commission rates and servicing and other variable costs for those customers who subscribe to our programs. Our goal is to maximize the average contribution per customer over the lifetime of that customer relationship, which we expect will maximize the growth of our cash flows, even though the aggregate number of customers we serve may grow at a slower rate or decline. For example, in the past five years we have grown the average revenue per member in our domestic membership business at a compound annual rate of approximately 8.3%, from $61.13 in 2005 to $91.18 in 2010. 6

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Grow Our International Operations. We believe that we are well positioned to provide our marketing partners with comprehensive customer engagement and loyalty solutions offerings on a global basis. We have grown our international retail membership operations by leveraging our significant U.S. experience to offer subscription products similar to existing U.S. subscription products to the customers of our European marketing partners. In addition, our European package business has expanded through unique product offerings, enhanced customer services and delivery of benefits. We are also planning to extend our operations into new countries and geographic regions. We intend to continue our growth in the international markets through both organic initiatives including geographic expansion as well as the continued evaluation of strategic acquisitions that strengthen our customer engagement solutions, grow our distribution capabilities or enhance our scale. We expanded our international operations by leveraging our European centers of excellence to enter the Spanish market in 2009 and the Finnish market in 2010. We also strengthened our international business in continental Europe with the acquisition of an Italian package business, a loyalty travel business in the Republic of Ireland and, in early 2011 we acquired Webloyalty, which enhances our operations in attractive international markets, including France and the U.K. Expand Our Vertical Market Penetration and Range of Marketing Media. We believe there are substantial opportunities to add new marketing partners in the retail, financial, travel, Internet, cable, telecom and utilities industries, in both North America and Europe, where prospective partners desire to add incremental revenue and strengthen and enhance the loyalty of their customer relationships. We also believe there are significant opportunities to expand our marketing channels, including direct-to-consumer initiatives and point-of-sale marketing with retailers and financial institutions. Focus on New Program Development. We continually develop and test new programs to identify consumer trends that can be converted into revenueenhancing and customer engagement-building opportunities. These programs may include loyalty and enhancement services, fraud and theft protection products, fully underwritten insurance programs, and purchase warranty offerings. We also consider acquisitions of new and complementary products and technology to further enhance our offerings and generate additional revenue. In addition, we believe we have opportunities to grow our existing services by expanding the ways that consumers may access their program benefits, thereby enhancing the value of the underlying service. For instance, many of our programs, such as roadside assistance, loyalty rewards redemptions, leisure and travel discounts, and identity theft resolution are well-suited for consumer use via mobile applications due to the real-time availability of the information the consumer desires to employ the service. Leverage Best Practices for Growth and Acquisitions. We intend to leverage the integration of our businesses globally by applying best practices and cross-selling products and services across business lines and geographical regions. We will continue to consider acquisitions of selected assets, businesses and companies to enhance our scale and market share. Consistent with these strategies, our recent acquisition of Webloyalty provides us with a technology platform that expands the range of our marketing media, particularly in online channels and provides additional economies of scale in the management of our combined product portfolio. Grow Our Strategic Consulting and Creative Services Offerings. We intend to further leverage our marketing services capabilities to provide marketing strategy, creative development, modeling and database management, campaign execution and other services to our marketing partners and other third parties on a fee-for-service basis. We believe these services will generate high-margin revenues and complement our existing customer engagement and loyalty marketing solutions. Industry Overview Direct marketing is any direct communication to a consumer or business that is designed to generate a response in the form of an order. Affinity marketing is a subset of the larger direct marketing industry which involves direct marketing to the customers of institutions, such as financial service providers and retailers, using the brand name and customer contacts of such institution. We believe that marketing associated with the brand of a marketing partner provides a significant advantage over other forms of direct marketing. Affinity marketing provides us with access to our marketing partners' large customer base, generally results in higher response rates as customers recognize and trust our marketing partners' brands and provides additional credibility and validation as to the quality of the program or service we are offering. Marketing partners benefit as they are able to promote their brands while offering additional programs and services, which strengthens their relationships with their customers and generates incremental revenue for them. Marketers with direct customer contacts or with large marketing databases are expected to continue to pursue direct marketing initiatives, such as those offered by us, to increase customer penetration in an environment where attracting and retaining customers is becoming increasingly challenging. As a result, direct marketing driven sales as a percentage of total sales have been rising. Sales generated by direct mail, one of our primary marketing media, are projected by the DMA to grow at a compound annual growth rate of approximately 3.8% from 2009 through 2014 in the U.S. Online media, a growth vehicle for the industry, represents the fastest growing direct marketing medium due to the increasing use of the Internet and 7

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its significantly lower communication costs. DMA projects a compound annual growth rate of approximately 10.3% for internet media from 2009 to 2014 in the U.S. Industry and market data used throughout this Report were obtained from the DMA's 2010 Statistical Fact Book (2010 Edition). While we believe that the research and estimates are reliable and appropriate, we have not independently verified such data nor have we made any representation as to the accuracy of such information. Company History We have more than 35 years of operational history. The business started with membership products in 1973 through the formation of Comp-U-Card of America, Inc. ("CUC"). Between 1985 and 1986, CUC acquired the insurance and package enhancement products of Financial Institution Services, Inc. and Madison Financial Corporation, both of which were formed in 1971. In 1988, CUC acquired National Card Control, Inc., which was formed in 1981 and provided loyalty solutions and package enhancement programs. Our international products were started by CUC in the early 1990s. In 1997, CUC merged with HFS Incorporated to form Cendant Corporation. The international products were rebranded as Cendant International Membership Services after the formation of Cendant. In 2001, the U.S. membership products were rebranded as Trilegiant and the loyalty solutions products were rebranded as Trilegiant Loyalty Solutions. The insurance and U.S. package enhancement products were rebranded as Progeny in 2002. In 2004, we realigned our organizational structure and began integrating the historically separate businesses in order to have a unified approach to the marketplace. In 2005, we entered into a Purchase Agreement with Cendant pursuant to which we purchased from Cendant all of the equity interests of Affinion Group, LLC or AGLLC (known as Cendant Marketing Services Group, LLC prior to the consummation of the Transactions) and all of the share capital of AIH. See "Item 13. Certain Relationships and Related Party TransactionsThe AcquisitionPurchase Agreement." Marketing We provide our customer engagement and loyalty solutions through retail and wholesale arrangements, or combinations of both. Under a retail arrangement, we usually market our products to a marketing partner's customers by using that marketing partner's brand name and customer contacts. In retail arrangements, we typically bear or share the acquisition marketing costs. Under structures where we bear all or most of the acquisition marketing costs, we typically incur higher up-front expenses but share a lower amount of the related revenue (which we generally call a "commission") with our marketing partners. Under structures where our marketing partners share more of the acquisition marketing costs, we typically have lower up-front expenses, but pay higher commissions on related revenue to such partners. Under a wholesale arrangement, the marketing partner markets our products and services to its customers, collects revenue from the customer, and typically pays us a monthly fee per end-customer. Under this type of arrangement, we may also provide other services to our marketing partners, including enrollment, fulfillment, customer service, website and mobile application development. We utilize a variety of media to offer our customer engagement solutions, including direct mail, online marketing, point-of-sale marketing, direct response radio and telephone marketing, inbound and outbound telephony and voice response unit marketing. We have a full-service, in-house creative agency with expertise in utilizing all varieties of customer acquisition media. We use a network of third-party operators for inbound and outbound telemarketing and develop all direct mail programs in-house, utilizing third parties only for limited services such as printing. In addition, we use standardized scripts and direct mail materials that are repeatedly tested and updated to ensure regulatory compliance, consistent quality and the maximum effectiveness for each marketing campaign. We utilize financial models that are designed to target and predict returns over a five-year period for marketing expenditures related to membership programs and a seven-year period for marketing expenditures related to insurance programs. These models are used to determine the minimum response rate required to attain a targeted return per marketing campaign, net of attrition, applying an appropriate cost of capital. Our marketing systems model individual customer engagement and loyalty program marketing campaigns across multiple media and product offerings utilizing extensive data, customer contacts and the results of over 101,000 marketing campaigns conducted over the last decade. We typically target a minimum profitability return after all costs for all marketing expenditures related to our customer engagement solutions. 8

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Direct Mail. We have developed considerable expertise in direct mail marketing, which remains our largest marketing medium in terms of new member acquisition, accounting for 32 % of new subscriber joins globally in 2010. Our direct mail operations incorporate a variety of mailing types, including solo direct mail, detachable inserts, credit card inserts, statement inserts, promotion inserts, and other printed media. Additionally, we continually test variations of direct mail solicitations to drive higher customer response rates. Point-of-Sale Marketing. Point-of-sale marketing offered at our financial institution marketing partners' branch networks is the primary distribution medium for our checking account package enhancement products. Point-of-sale marketing of our programs is also offered at our retail marketing partners' stores. Point-of-sale marketing utilizes a variety of promotional and display materials at these locations to create interest and drive program inquiries and enrollments. Customer service representatives of our marketing partners usually coordinate sales with the opening of new accounts and sale transactions. We also train our marketing partners' point-of-sale personnel in sales techniques for our programs. Live Operator Inbound Telemarketing ("Transfer Plus" and "Customer Service Marketing"). Transfer Plus is a live-operator call transfer program which operates out of our marketing partners' call centers, and has proven successful in converting customer service calls into revenue opportunities. In Transfer Plus, qualified callers of a marketing partner are invited to hear about a special offer, and those callers who express interest in that offer are transferred to our representatives to hear more about the product or service. Customer Service Marketing is similar to Transfer Plus, however, the marketing partner's representative continues with the sales process instead of transferring the call to us. These programs are easy to implement, and we handle all training and promotions. It also provides a no-cost employee retention program for our marketing partners as agents earn cash/awards from us for every call handled or transferred. Outbound Telemarketing. We use extensive modeling to target calling efforts to likely responders. Calls are fully scripted, and our representatives market only to those who are interested in hearing about our products and services. Our outbound telemarketing programs are designed to comply with the "Do-Not-Call" Registry and other privacy rules and requirements. Voice Response Unit Marketing. When a consumer contacts a marketing partner's call center to activate a credit or debit card, check their account balance or make another inquiry that can be handled electronically, the automated voice response system offers our product while the customer is waiting for, or after the completion of, the transaction or inquiry. The consumer then has the opportunity to accept or decline the offer. Online Marketing. We use the Internet for the marketing of our products and services, both with marketing partners and via direct to consumer marketing, in both North America and Europe, and for the delivery of certain product benefits where it is relevant and beneficial to the consumer's experience to do so. Our online marketing initiatives include pursuing new marketing partnerships (e.g. online retailers, travel providers, and service providers), expanding relationships with traditional marketing partners via the Internet (notably financial institutions who allow us to market to their online banking customers), as well as offering our products and services directly to customers. We use advertising, search and email marketing methods to enhance our online customer acquisition techniques. With our acquisition of Webloyalty, we have significantly increased our presence and online capabilities in attractive European markets, which will create new opportunities for growth in our services. Our online marketing programs are designed to comply with the Restore Online Shoppers' Confidence Act as well as other relevant privacy legislation. Products and Services North American Membership Products. We market various private-label membership products and services in North America, primarily to the customers of our domestic marketing partners. These products are typically offered on a subscription basis and may be categorized generally as addressing one of two broad categories of fundamental consumer needs: (1) protection and peace-of-mind services or (2) savings on lifestyle oriented purchases and loyalty solutions. For example, our products offer members benefits and value-added services in the growing market of credit monitoring and identity-theft resolution services, which are intended to improve the member's sense of security and well-being, as well as discounts on many brand categories along with shop-at-home convenience in such areas as retail merchandise, gift cards, travel, automotive and home improvement. 9

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At December 31, 2010, our principal membership products included:

Product Description Key Features

Complete credit security solution with advanced monitoring and proactive management tools that enable members to retain more control over their personal data and prevent fraudulent activity Access and monitoring of credit report, credit score and credit history to help members manage their credit and prevent identity-theft Credit card and document registration

Access to credit reports, credit monitoring, fraud resolution Online monitoring of social security numbers, credit cards and other personal data Identity-theft expense reimbursement Access to credit data from all three credit bureaus credit monitoring from one or all three credit bureaus Fraud resolution Identity-theft expense reimbursement Cancellation/replacement of credit cards with fraud liability, sales price and return guarantee protection Emergency cash advance and airline ticket replacement Virus protection Personal firewall and spam blocker Parental internet control Spyware protection PC repair reimbursement for physical and virus damage Mobile phone warranty Available for any phone regardless of age, carrier or model Concierge service 5% cash back 24/7 full service travel agency 200% low price guarantee for 60 days; automatic two-year warranty on most items Discount on over 12,900 items from more than 950 brand name manufacturers 3.5% cash back on online orders of most items Emergency roadside assistance for up to three times per year Up to 15% in service center network savings Coupons for entertainment, shopping and dining savings from approximately 400 national brands Clip and save coupons from national retailers and entertainment locations Dining discount of up to 50% at almost 60,000 U.S. restaurants Benefits of Shoppers Advantage Discount on home-related purchases and services Approximately 80,000 pre-screened contractors 60-day low price guarantee

Computer and internet security protection

Mobile phone protection

10

Discount travel service program offering a lowprice guarantee on booking airline, hotel and car rental reservations Discount shopping program offering savings of 10%-50% off manufacturers' suggested retail price on brand name consumer products

Discount program with preferred prices on new cars and discounts on maintenance, tires and parts Discount program offering savings on dining, shopping, hotels, and admission to individual and family-oriented leisure activities

Discount program offering savings on home improvement and repair

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Product Description Key Features

Customer service that extends manufacturers' warranties Discounts on a variety of health-related programs and services Insurance coverage service for breakdowns of household systems and appliances

Automatic five-year warranty extension 20%50% repair cost protection New purchase price protection for 60-90 days 5%25% off fees at approximately 400,000 practicing practitioners 5%35% discounts on prescriptions, dental, vision, hearing and preventive care 24-hour, 365-day coverage with repair service network of over 25,000 prescreened service professionals

In addition to direct mail campaigns, other forms of marketing utilized to acquire new subscribers and end-customers in the Membership business segment include telemarketing, customer service marketing, voice response unit marketing, direct response radio and television marketing, point-of-sale marketing and our online initiatives. Membership programs are mostly offered on a retail basis, where customers pay us an annual or monthly subscription fee. In return, we usually pay our marketing partners' commissions on initial and renewal subscriptions based on a percentage of the subscription fees we collect. We also offer our membership products and services under wholesale arrangements in which our marketing partners incur the marketing expense and risk of campaign performance and pay us a monthly fee and other fees for the administration and fulfillment of these programs. Domestic Insurance. We offer four primary insurance programs that pertain to supplemental health or life insurance. These programs, including AD&D, represent our core insurance offerings and the majority of our annual insurance revenue. At December 31, 2010, our principal insurance products included:
Product Description Key Features

Provides coverage for accidental death or serious injury Pays cash directly to the insured if hospitalized due to a covered accident Pays cash to insured or beneficiary for hospitalization due to a covered accident or illness Provides coverage for accidental death

$1,000 initial complimentary coverage; up to $300,000 in additional coverage Up to $400 per day hospitalized Choice of $50 or $100 per day hospitalized Up to $1,000,000 in accidental death insurance

We market our insurance products primarily by direct mail, telemarketing and the Internet. We use retail arrangements with our marketing partners when we market our insurance products to their customers. We earn revenue in the form of commissions from premiums collected as well as from economic sharing arrangements with the insurance carriers that underwrite the policies that we market. While these economic sharing arrangements have a loss-sharing feature that is triggered in the event that the claims made against an insurance carrier exceed the premiums collected over a specified period of time, historically, we have never had to make a payment to insurance carriers under such loss-sharing feature, and we also purchase reinsurance coverage to provide a backstop against high amounts of claims activity. Domestic Package. We design and provide checking account enhancement programs to approximately 2,200 financial institutions in the United States. We provide these marketing partners with a portfolio of approximately 11

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45 benefits in such areas as travel and shopping discounts, insurance and identity-theft resolution to create customized package offerings for their customers which are generally embedded in our marketing partners' checking or deposit account and which enhance the value proposition for the growing trend of "feebased" checking. For example, a financial institution can bundle enhancements such as grocery coupon packages, medical emergency data cards, movie ticket discounts, telephone shopping services, car rental discounts, half-price hotel directories, hotel savings, dining discounts, and other benefits, with a standard checking or deposit account and offer these packages to its customers for an additional monthly fee. Additionally, through our NetGain program, our marketing partners engage us to perform customer acquisition marketing campaigns on their behalf. In exchange for a fee, which is typically paid by our marketing partners for each customer acquisition campaign we perform, we provide marketing strategy, customer modeling, direct mail support and account management services. At December 31, 2010, our principal package products included:
Product Description Key Features

Package of benefits tied to customer checking accounts in the U.S. Package of benefits focused on office management and business discounts

Broad array of features includes shopping, travel and security benefits Business services and solutions

Health savings package includes discounts on prescriptions, dental and vision care and AD&D insurance Value-based engagement solution that drives profitable checking account behaviors while delivering value that customers expect and will pay for, resulting in deeper relationships, more income generation for our marketing partners, and greater lifetime value of the end customer

Health-oriented programs Broad portfolio of value-added services, data tracking and analysis on checking account behavior performance and overall account profitability.

A customer service representative at a marketing partner's branch site offers package enhancement programs to checking account, deposit account and credit card customers at the time of enrollment. In addition, these programs may be offered via direct mail solicitation to a marketing partner's existing customer base. We typically offer package enhancement products, such as Enhanced Checking, under wholesale arrangements where we earn an upfront fee for implementing the package enhancement program and a monthly fee based on the number of customers enrolled in the program. We typically offer Small Business Solutions and Wellness Extras programs on a retail basis similar to our retail membership relationships. Loyalty Products. We manage loyalty solutions products for points-based loyalty programs such as General Motors' reward programs and USAA. Based on our internal estimates and information received from our marketing partners in the course of conducting business, we believe we are a leader in online points redemption as we managed approximately 497 billion points for our customers as of December 31, 2010. Our loyalty programs are private-label, customizable, full-service rewards solutions that consist of a variety of configurations that are offered on a stand-alone and/or bundled basis depending on customer requirements. In 2008, we assumed all of the liabilities and obligations of certain ex-Cendant entities relating to a loyalty program operated by these ex-Cendant entities for a major financial institution. The obligations that we assumed included the fulfillment of the then-outstanding loyalty program points. With the exception of the loyalty program points assumed in connection with that transaction and the loyalty points earned by credit card holders under this program, we do not typically retain any loyalty points-related liabilities. We typically charge a per-member and/or a per-activity administrative fee to clients for our services. 12

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The following table illustrates the services provided to our clients:

Service Description

Program Design Program Management Technology Platform Rewards Fulfillment

Points Administration Customer Experience Management Program Communications Performance Monitoring

Establishes parameters for earning, redeeming, fulfilling, communicating and analyzing points Provides loyalty industry research, including consumer behavior and competitive program trends across various industries Scalable, customizable and flexible proprietary loyalty accounting and data management platform to meet marketing partners' needs over the life of the programs Ownership of vendor management, inventory and fulfillment of program rewards Works directly with over 200 vendors to obtain rewards and provides loyalty partners with access to more than 12,600 available merchandise models Tracks and maintains customer account records and customer activities upon which point awarding business rules are based Provides a full-service, in-house contact center as an extension of the partner's existing contact center Produces HTML-based email newsletters and surveys which increase readership and are typically less expensive than direct mail campaigns for these programs Hosts many of its partners' loyalty websites Provides internal and external access to its data warehousing environment, including a dashboard of critical program performance metrics and allows for standard ad-hoc reporting

ALG also provides credit card enhancements, such as travel insurance and concierge services. The enhancement product line, which has been offered by us for approximately 20 years, addresses the same categories of consumer needs as our subscription-based programs, offering both protection (such as travel accident insurance) and lifestyle (such as concierge services) benefits. The benefits are sold wholesale to our marketing partners, who then provide the benefits at no cost to their customers as an added value of doing business with them. Historically, these benefits have been predominantly offered within the financial services industry as credit card enhancements. Loyalty Fulfillment. We provide and manage travel reward products for loyalty programs through Connexions Loyalty Travel Solutions, L.L.C. ("Connexions"), which is a service provider for points-based loyalty programs such as Bank of America WorldPoints and Citibank's ThankYou Rewards. We believe we are a leader in online and offline travel reward fulfillment as we fulfilled over 1.5 million travel redemptions on an annualized basis. Connexions' loyalty program services are private-label, customizable, full-service travel rewards solutions that consist of a variety of configurations that are offered on a stand-alone and/or bundled basis depending on our customer's requirements. We do not retain any loyalty points-related liabilities. We typically charge a permember and/or a per-activity administrative fee to clients for our services. The following table illustrates the services provided to Connexions' clients:
Service Description

Program Design Program Management Rewards Fulfillment

Points Administration Customer Experience Management

Establishes selection of loyalty program travel rewards and the parameters for redemption fulfillment Provides loyalty and travel industry comparative data, including travel analysis, fulfillment best practices and competitive program trends across various industries Provides travel content and fulfillment of travel inventory to program rewards. Works directly with over 830 travel suppliers to obtain rewards and provide loyalty partners with access to worldwide travel content Documents program member points for selected travel rewards. Tracks and maintains program members redemption records based on client's business rules Provides a full-service, in-house contact center as an extension of the partner's existing contact center 13

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Service Description

Program Communications Performance Monitoring

Produces HTML-based email newsletters and surveys which increase readership and are typically less expensive than direct mail campaigns for these programs Integrates private label travel redemption web sites into clients' loyalty program web site Provides client redemption usage reports , including a dashboard of critical program performance metrics and allows for standard ad-hoc reporting

Connexions also provides clients with the ability to offer leisure travel as a member benefit in a purchase environment, a travel gift card which can be used on all travel components, including airfare, rental car, hotel stays and cruise vacations. International Products. Through our Affinion International operations, we market our membership and package enhancement product lines internationally. Based upon the wide range of international membership and package enhancement programs we offer under retail and wholesale arrangements we believe we are the largest provider of membership programs and package enhancement products in Europe. These membership services and package enhancement products are offered under retail and wholesale arrangements comparable to those in the U.S. At December 31, 2010, our principal international membership products included:
Product Description Key Features

Sentinel Gold

Protection for all credit and debit cards against loss or theft

Services including change of address and luggage and key retrieval Emergency services including medical, airline ticket replacement and hotel bill payment Lost cash and wallet/purse insurance Online and offline single bureau reporting Credit monitoring Full fraud resolution Identity-theft insurance 25% discount on dining bills or 2-for-1 on meals at over 4,000 restaurants in the U.K. 25% discount on concert and other event tickets Discounted entry to select attractions and other 2-for-1 promotions Virus protection and personal firewall software Spam blocker and anti-spyware software Identity-theft insurance PC repair insurance for accidental and virus damage

Privacy Guard

Access to and monitoring of credit report, credit score and credit history to help prevent identity-theft

Let's Go Rewards Access to year round discounts on dining, days out and event tickets PCProtection Plus Online security and protection product with identity theft protection

Our principal package enhancement products are marketed through our financial institution marketing partners and provide a broad array of benefits, including shopping, travel and security, to checking account customers in Europe. In addition to the identity-theft resolution and credit monitoring programs launched in the U.K., Affinion International markets its travel program, its shopping program and its dining and leisure programs in the U.K. and across our European footprint. Marketing Partners We are able to provide our customer engagement and loyalty solutions by utilizing the brand names and customer contacts of our marketing partners. Our diversified base of marketing partners includes more than 5,550 companies in a wide variety of industries, including financial services, retail, travel, telecommunications, utilities and Internet. Select marketing partners include Wells Fargo, Bank of America, JPMorgan Chase, HSBC and Choice Hotels. In 2010, we derived 14

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approximately 49.4% of our net revenues from members and end-customers obtained through our 10 largest marketing partners. Typically, our agreements with our marketing partners for the marketing and servicing of our retail membership products are for fixed terms which automatically renew and may be terminated upon at least 90 days' written notice. While we generally do not have continued marketing rights following the termination of any marketing agreements, the vast majority of our marketing agreements allow us to extend or renew existing memberships and bill and collect associated subscription fees following any termination. While we usually do not have rights to use marketing partner branding in new marketing following termination of a marketing agreement, the products we provide to subscribers are either our standard products which do not require our marketing partner's branding, or are co-branded products for which we typically have the ability to continue to service as co-branded products. Generally, our marketing partners agree not to solicit our subscribers for substantially similar services both during the term of our agreement and following any termination thereof. Membership Products. We have over 800 marketing partners in multiple industries. Some of our largest marketing partners in terms of revenue, such as Wells Fargo, Bank of America and JPMorgan Chase, have been marketing with us for over 10 years. Insurance and Package Products. Our insurance marketing partners consist of approximately 3,600 financial institutions including national financial institutions, regional financial institutions and credit unions at December 31, 2010. Customers of our top 10 marketing partners generated approximately 40% of our gross insurance revenue in 2010. Our package enhancement marketing partners are comprised of approximately 2,200 national financial institutions, regional financial institutions and credit unions at December 31, 2010. Customers of our top 10 U.S. marketing partners generated approximately 31% of our U.S. package enhancement revenue in 2010. In addition, we have held the endorsement of the American Bankers Association of our account enhancement programs in the U.S. for over 15 years. International Products. Our international marketing partners include some of Europe's most prominent retail banks. Additionally, we own a 51% investment in Cims South Africa Ltd., a joint venture that offers wholesale package enhancement programs in South Africa, similar to those offered in Europe. Customers As of December 31, 2010, we had approximately 69 million membership, insurance and package subscribers and end-customers enrolled in our programs worldwide and approximately 111 million customers who received credit or debit card enhancement services and loyalty points-based management services. We offer our programs and services to our customers through more than 5,550 marketing partners as of December 31, 2010. We market to customers using direct mail, online marketing, point-of-sale marketing, telemarketing and other marketing methods. Membership Products. As of December 31, 2010, we had approximately 15.9 million subscribers and end-customers in the U.S. We target customers of our marketing partners who are willing to pay a fee to gain access to a multitude of discount programs or want to improve their sense of security and wellbeing. Our focus is on maximizing revenue and profitability per member over a five-year period, rather than the number of active members in our programs. Insurance and Package Products. As of December 31, 2010, we had approximately 26.8 million insurance customers in the U.S. We rely on access to our marketing partners' large customer bases to market our insurance programs. The insurance products we market, such as AD&D, provide customers with peace of mind benefits should they suffer a serious injury or loss. As of December 31, 2010, we provided our U.S. package products to approximately 8 million members and end-customers. Approximately 2,200 financial institutions utilize our package products to increase customer affinity, increase response and retention rates and generate additional fee income. Loyalty Products. We worked with approximately 90 marketing partners as of December 31, 2010, and provided enhancement and loyalty products to approximately 111 million customers. These marketing partners include leading financial institutions, brokerage houses, premier hotels, timeshares and other travel-related companies. We provide points-based loyalty products and benefit package enhancement products that they in turn offer to their customers. Many of the principal ALG (as defined below) partner agreements have a term of at least two years, and we typically charge a per-member and/or a peractivity administrative fee to clients for our services. In 2008, we assumed all of the liabilities and obligations of certain ex-Cendant entities relating to a loyalty program operated by these ex-Cendant entities for a major financial institution. The obligations that we assumed included the 15

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fulfillment of the then-outstanding loyalty program points. With the exception of the loyalty program points assumed in connection with that transaction and the loyalty points earned by credit card holders under this program, we do not typically retain any loyalty points-related liabilities. International Products. As of December 31, 2010, we had approximately 16.5 million international package customers and approximately 1.8 million members and end-customers in 13 countries, primarily in Europe. Third-Party Vendors We partner with a large number of third-party vendors to provide fulfillment of many of our programs and services. Generally, our relationships with key vendors are governed by long-term contracts. As we have a large number of vendors, we are generally not dependent on any one vendor and have alternative vendors should we need to replace an existing vendor. We believe we have very good relationships with our vendors who value their relationship with us as we are able to provide them with access to a large customer base through our marketing partners, many of whom are leaders in their respective industries. In addition, because we purchase large volumes of services across our various businesses, we are able to achieve significant price discounts from our vendors. Membership Products. We partner with a variety of third-party vendors to provide services, benefits and fulfillment for many of our membership R programs. Some of our largest vendor relationships relate to the provisions of certain benefits embedded in our PrivacyGuard membership product and AutoVantage membership product. Insurance and Package Products. As of December 31, 2010, The Hartford, Inc. ("The Hartford") was our primary carrier for the majority of our insurance programs and was one of our largest suppliers during 2010. Our contract with The Hartford is non-exclusive and we periodically explore additional relationships for our insurance programs. As of December 31, 2010, we also have contractual relationships with other insurance underwriters, including American International Group, American General and Minnesota Life Insurance Company. Our package enhancement products combine both insurance and membership products to create a unique enhancement package that our marketing partners provide to their end-customers. Generally, programs include AD&D insurance and travel discounts that are supplied by our membership and insurance benefit vendors. Loyalty Products. Affinion Group Loyalty, our wholly owned subsidiary ("ALG") acts as a business process outsourcer for points-based loyalty products and provides enhancement benefits to credit and debit card issuers. While many of the services ALG provides are sourced in-house as a result of ALG's proprietary technology platform and program design support, third-party suppliers are used to provide additional benefit enhancements. These benefit enhancements are supplied by our membership and insurance benefits vendors. International Products. Affinion International services its marketing partners using a variety of third-party vendors to provide benefits, fulfillment and delivery for some of our programs. In addition, Affinion International also has key supplier relationships with third parties for its benefits related to sports and entertainment events as well as the provision of certain benefits embedded in our PrivacyGuard membership product. Affinion International also uses thirdparty suppliers for its print and fulfillment products. Product Development Product development is integral to our ability to maximize value from each of our marketing campaigns and marketing partner relationships. In developing our products, we focus on maximizing margins and cash flows, leveraging marketplace trends and increasing loyalty, with a critical key focus on the needs of the consumer. When we develop new products, we take into account not only the combination of benefits that will make up the product, but the characteristics of the customers to whom we will market the product and the marketing channel that will be used to reach these customers. Developing new products involves the creation of test products and feasibility studies to evaluate their potential value, as well as bundling existing products and benefits into new packages. We also research, build and launch custom partner programs that we create uniquely for marketing partners to address the specific needs of these marketing partners and their customers. 16

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Operations Our operations group provides global operational support for all of our customer engagement and loyalty solution initiatives, including management of our internal and outsourced contact centers, as well as certain key third-party relationships. The group is charged with improving cost performance across our operations while enhancing revenue and bottom-line profitability through increased customer satisfaction and retention. Processing The processing responsibilities of the operations group can be divided into: (1) enrollments; (2) fulfillment packages; (3) billing; (4) merchandise delivery; and (5) travel fulfillment. Enrollments. Enrollment information is sent to us through a variety of different media, including mail, electronic file transfer from marketing partners and telemarketing vendors and the Internet. Average turnaround time from receipt to enrollment is approximately 24 hours. Fulfillment Packages. Fulfillment packages, which include enrollment materials and premiums (e.g., gift cards, coupons and "hard" premiums such as MP3 players) sent to customers via mail and electronically, are produced in thousands of combinations for our membership, insurance and package enhancement programs. Fulfillment orders are generally transmitted to the appropriate fulfillment vendor by the next business day following receipt of the order. Physical fulfillment assembly and distribution in North America is completed by our facility in Franklin, Tennessee or by outsourced vendors. Physical fulfillment assembly and distribution in Europe is completed in five locations across Europe and totals around 13 million pieces per year. Approximately 54% of these pieces are completed by third-party vendors with the remainder being completed in-house by Affinion International employees. We are increasingly employing electronic delivery of membership materials and fulfillment packages, which drives further cost reductions. Billing. We have the ability to accept a variety of different payment account types, including Visa (debit and credit), MasterCard (debit and credit), Discover, American Express, oil and retail company proprietary cards, PayPal, mortgage loans and checking and savings accounts. Domestically, we process approximately 139 million billing transactions each year for our membership, insurance and package products. We use both generic and direct processing methods and work closely with a variety of payment processors and our marketing partners to maximize our ultimate collection rates. Merchandise Delivery. Shoppers Advantage maintains a virtual inventory of approximately 14,000 items, covering more than 750 brands sourced through a best-in-class direct-ship network of 170 direct-ship vendors. We manage the process of customers purchasing these products, but we outsource delivery logistics to back-end suppliers. While we manage the fulfillment process, we generally do not take ownership or physical possession of any of the products being delivered. By pooling the purchasing power of our membership products and other products, including our loyalty programs, we achieve price reductions on the products we offer, and deliver value to our customers. Merchandise sales between our merchandise vendors and our customers was almost 7 million units and totaled more than $278 million in 2010. Related commissions on merchandise revenue totaled approximately $2.0 million which is included in our 2010 net revenues. Travel Fulfillment. TAS, our full-service travel agency, is dedicated primarily to servicing our customers; however, it also provides travel agency services to Resort Condominiums International, LLC and CheapTickets.com, each of which was an affiliate of Cendant. Based on information derived from the 2010 Travel Weekly's Power List, we believe that TAS is one of the ten largest leisure travel agencies in North America. TAS travel consultants use the Galileo International GDS booking system, which offers 420 airlines, 25 car rental companies, 88,000 hotel properties, Amtrak, VIARail (Canada) and 13 national rail systems. This system provides us with access to online fares and electronic ticketing capability on 220 air carriers. Because TAS takes bookings primarily for our members, TAS is able to shift the bookings from one travel vendor (airline, hotel, car rental, etc.) to another depending on which is more cost advantageous. Reservation and support services are provided by a combination of internally managed call centers, outsourcing relationships, and more than ten branded websites. Contact Call Centers Our contact call centers provide high-quality, predominantly inbound telemarketing service and retention support. We are committed to using internally managed and outsourced contact call centers to effectively handle peak service levels while achieving a semi-variable cost structure. As of December 31, 2010, 20 facilities handled the call volume, of which 12 are internally managed (6 in North America and 6 in Europe) and 8 are outsourced. 17

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Our contact call centers handle approximately 23 million customer contacts per year, 15 million of which are related to our North American business and 8 million to our international business. The contact call centers provide a primary point of interaction with our customers, driving customer satisfaction, retention and ultimately, profits. To this end, we are focused on implementing ways to improve service levels and set the necessary quality benchmarks to assure third-party vendors are performing at high levels. At the same time, we have reduced the number of our internally managed contact call centers and increased the use of outsourcers, producing significant cost reductions and an improved variable cost structure. Information Technology Our information technology team, comprised of approximately 460 employees worldwide, operates and supports approximately 85 individual applications at December 31, 2010. Membership, package and insurance products and services are distributed through a multiple media approach, which allows us to interface with our marketing partners' customers in a variety of ways to enhance file penetration in a cost effective manner. Our systems are able to manage marketing campaigns across all media. Servicing and subscription requests are processed through a workflow and messaging interface with our vendors and are stored within our subscriber management platform. This framework allows us to keep a virtual inventory of programs and services, as well as store customer information for future marketing analysis. Customer servicing and billing information is fed into the financial ledger and business intelligence platform for billing and future marketing analysis. Intellectual Property We own or have licenses to use a large number of patents relating to a significant number of programs and processes. We also have certain significant material trademarks including, but not limited to Affinion Group, Affinion Benefits Group, ALG, Affinion International, AutoVantage, Buyers Advantage, CompleteHome, Enhanced Checking, HealthSaver, Hot-Line, NHPA, PrivacyGuard, Shoppers Advantage, Small Business Solutions, Travelers Advantage, Trilegiant and Wellness Extras. We use our trademarks in the marketing of our services and products offerings. We renew our trademarks on a regular basis. No individual patent or trademark is considered to be material to our business; however, our overall portfolio of patents and trademarks are valuable assets. Employees As of December 31, 2010, we employed approximately 3,900 people, of which approximately 65% are located in North America and the remaining 35% are in our international offices. Governmental and Regulatory Matters The direct marketing industry is subject to U.S. federal and state regulation as well as regulation by governments and authorities in foreign jurisdictions. Certain regulations that govern our operations include: federal, state and foreign marketing laws; federal, state and foreign privacy laws; and federal, state and foreign insurance and consumer protection regulations. Federal regulations are primarily enforced by the Federal Trade Commission (the "FTC") and Federal Communications Commission (the "FCC"). State regulations are primarily enforced by individual state attorneys general. Foreign regulations are enforced by a number of regulatory bodies in the relevant jurisdictions. Federal and State Marketing Laws. The FTC and each of the states have enacted consumer protection statutes designed to ensure that consumers are protected from unfair and deceptive marketing practices. We review all of our marketing materials for compliance with applicable FTC regulations and state marketing laws. In 2003, the FTC amended its Telemarketing Sales Rule to establish a National "Do-Not-Call" Registry. As of December 2010, the "Do-Not-Call" Registry included more than 194 million phone numbers. To comply with the rule, companies are required to match their call lists against the "Do-Not-Call" Registry prior to conducting outbound telemarketing and remove the names of consumers who have requested they not be called. In addition, the amended Telemarketing Sales Rule requires additional disclosures and sales practices for goods and services sold over the phone. We match our call lists with the "Do Not Call Registry" and implement telemarketing scripts to comply with this regulation. On May 27, 2009, the U.S. Senate Committee on Commerce, Science, and Transportation (the "Senate Committee") initiated an investigation into Webloyalty and Vertrue Inc., a competitor of the Company, in connection with their e-commerce marketing practices, including those relating to consumers' account number acquisition. On July 10, 2009, the Senate Committee expanded the scope of its investigation to include us and requested that we provide certain information about our domestic online marketing practices. These practices included those relating to the acquisition of consumers' credit or debit card account numbers automatically from our partners when a consumer enrolls in one of our programs immediately after making a purchase through one of our partners' web sites ("Online Data-pass Marketing"), a marketing channel which 18

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generated less than 5% of our total consolidated net revenues in 2009. On January 6, 2010, we sent a letter to the Senate Committee informing them of our decision, after careful consideration of the fluid and iterative nature of the internet, to cease Online Data-pass Marketing for its membership programs and make certain additional changes to the disclosures in our online marketing and fulfillment. Specifically, when marketing these programs online, we now require consumers to provide all 16 digits of their credit or debit card when enrolling in our membership programs in the online post-transaction environment. On December 29, 2010, legislation entitled the "Restore Online Shoppers' Confidence Act" was enacted. The legislation prohibits Online Data-pass Marketing and requires additional disclosure relating to the online marketing of, and billing for, membership programs in the online post-transaction environment. Since we and Webloyalty had ceased Online Data-pass Marketing more than eleven months prior to the enactment of such legislation, we do not expect such legislation to have a material adverse effect on our business. Federal Privacy Laws. The Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act ("GLB"), includes provisions to protect consumers' personal financial information held by financial institutions. GLB places restrictions on the ability of financial institutions to disclose non-public personal information about their customers to non-affiliated third parties and also prohibits financial institutions from disclosing account numbers to any nonaffiliated third parties for use in telemarketing, direct mail marketing or other marketing to consumers. We have implemented privacy solutions across our businesses designed to comply with GLB. Additionally, several bills have been proposed in Congress that could restrict the collection and dissemination of personal information for marketing purposes. If any such legislation is passed, we would implement appropriate procedures and practices to comply with such laws. State Privacy Laws. In addition to federal legislation, some states are considering or have passed laws restricting the sharing of customer information. For example, the California Financial Information Privacy Act ("SB 1") places restrictions on financial institutions' ability to share the personal information of their California customers. We have established a privacy solution that is designed to comply with the requirements of SB 1. Domestic and International Insurance Regulations. As a marketer of insurance programs, we are subject to state rules and regulations governing the business of insurance including, without limitation, laws governing the administration, underwriting, marketing, solicitation and/or sale of insurance programs. Domestically, the insurance carriers that underwrite the programs that we sell are required to file their rates for approval by state regulators. Additionally, certain state laws and regulations govern the form and content of certain disclosures that must be made in connection with the sale, advertising or offer of any insurance program to a consumer. We review all marketing materials we disseminate to the public for compliance with applicable insurance regulations. We are required to maintain certain licenses and approvals in order to market insurance programs. In addition, our international products are regulated by various national and international entities, including the U.K. Financial Services Authority ("FSA"), in the sale of insurance programs. The FSA is responsible for enforcing the Financial Services and Markets Act 2000 which, among other things, implements the European Union's (the "EU") Insurance Mediation Directive. Other Foreign Regulations. Our European operations are subject to privacy and consumer protection regulations. Many of these regulations are based on EU Directives which are adopted as laws by countries in which Affinion International conducts its operations. These include: Data Protection regulation: imposing security obligations and restrictions on the use and transmission of customers' personal information data; Privacy and Electronic Communications regulation: regulating unsolicited marketing activities carried out by telephone, fax and e-mail to users/ subscribers; Electronic Commerce regulation: imposing certain disclosure and operational requirements in relation to websites and internet marketing and sales activities; Distance Selling regulation: requiring information disclosure and "cooling off periods" in contracts for goods or services (other than financial services) supplied to a consumer where the contract is made exclusively by means of distance communication; Insurance Mediation regulation: requiring information disclosure and related obligations (including authorization and reporting) on entities that arrange, advise on, administer or otherwise engage in insurance intermediary activities; 19

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Distance Marketing regulation: requiring information disclosure and "cooling off periods" in contracts for financial services supplied to a consumer where the contract is made exclusively by means of distance communication; Unfair Terms and other consumer protection regulation: requiring that consumer terms and conditions be fair and reasonable; Consumer Credit regulations: requiring licensing for the provision of certain credit products; and Provision of Services regulations: requiring that certain information be made available to consumers and setting basic rules on responding to complaints.

In addition, there are various self-regulatory codes of advertising and direct marketing practice. We have established procedures designed to comply with the requirements of these codes and practices. Further, the FSA and other European regulators may change or introduce new laws or regulations that materially impact the membership, package enhancement and other services we provide. Insurance We believe we carry sufficient insurance coverage to protect us from material losses incurred by any of our operations due to an insurance recoverable circumstance. Corporate Information We are a Delaware corporation formed in July 2005 and are a holding company whose assets consist of the capital stock of our direct subsidiaries. Our headquarters and principal executive offices are located at 6 High Ridge Park, Stamford, Connecticut 06905. Our telephone number is (203) 956-1000. Item 1A. Risk Factors

You should carefully consider the risk factors set forth below as well as the other information contained in this Report. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial may also materially and adversely affect our business, financial condition, cash flow, or results of operations and prospects. The following is a description of the most significant factors that might cause the actual results of operations in future periods to differ materially from those currently desired or expected. Any of the following risks could materially and adversely affect our business, financial condition or results of operations and prospects. Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from servicing our debt. We are a highly leveraged company. As of December 31, 2010, we had approximately $1.7 billion principal amount of outstanding indebtedness and since then, we incurred an additional $250.0 million of term loan indebtedness under our senior secured credit facility. Our annual debt service payment obligations, exclusive of capital lease obligations, do not include any required principal repayments until 2015, other than quarterly payments on our term loan equal to 1% per annum and annual required repayments based on excess cash flow. However, under our senior secured credit facility, we have a one year "holiday" on mandatory term loan repayments based upon excess cash flows. As of December 31, 2010, our estimated 2011 principal and interest payments on our debt will be approximately $130.8 million. Our ability to generate sufficient cash flow from operations to make scheduled payments on our debt will depend on a range of economic, competitive and business factors, many of which are outside our control. Our business may not generate sufficient cash flow from operations to meet our debt service and other obligations. If we are unable to meet our expenses, debt service obligations and other obligations, we may need to refinance all or a portion of our indebtedness on or before maturity, sell assets and/or raise equity. We may not be able to refinance any of our indebtedness, sell assets or raise equity on commercially reasonable terms or at all, which could cause us to default on our obligations. 20

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Our substantial indebtedness could have important consequences, including the following: it may limit our ability to borrow money or sell stock for our working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes, such as marketing expenditures; a substantial portion of our cash flow from operations will be dedicated to the repayment of our indebtedness and will not be available for other purposes; it may limit our flexibility in planning for, or reacting to, changes in our operations or business; we are and will be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; it may make us more vulnerable to downturns in our business or the economy; it may restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities; and it may limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets.

All of the debt under our senior secured credit facility is variable-rate debt, subject to a minimum LIBOR floor. The terms of our senior secured credit facility and the indentures governing the existing 7.875% senior notes and 11 /2% senior subordinated notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions. The terms of our senior secured credit facility and the indentures governing the existing 7.875% senior notes and 11 /2% senior subordinated notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things: incur or guarantee additional debt; sell preferred stock of a restricted subsidiary; pay dividends and make other restricted payments; create or incur certain liens; make certain investments; engage in sales of assets and subsidiary stock; enter into transactions with affiliates; and transfer all or substantially all of our assets or enter into merger or consolidation transactions.
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In addition, our senior secured credit facility requires us to maintain certain financial ratios. As a result of these covenants, we will be limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. If we fail to comply with the covenants contained in our senior secured credit facility, an event of default, if not cured or waived, could result under our senior secured credit facility, and the lenders thereunder: will not be required to lend any additional amounts to us; could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable and could proceed against the collateral securing our senior secured credit facility; and could require us to apply all of our available cash to repay these borrowings;
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any of which could result in an event of default under the existing 7.875% senior notes and 11 /2% senior subordinated notes. If the indebtedness under our senior secured credit facility or our notes were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full. 21

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Despite our substantial indebtedness, we may still be able to incur significantly more debt. This could intensify the risks described above. The terms of the indentures governing our existing 7.875% senior notes and 11 /2% senior subordinated notes and our senior secured credit facility contain restrictions on our and our subsidiaries' ability to incur additional indebtedness. However, these restrictions are, or will be (as applicable), subject to a number of important qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could be substantial. Accordingly, we or our subsidiaries could incur significant additional indebtedness in the future, much of which could constitute secured or senior indebtedness. As of December 31, 2010, we had $153.2 million available for additional borrowing under the revolving loan commitments under our senior secured credit facility, after giving effect to $6.8 million of outstanding letters of credit. In January 2011, the revolving loan commitments were increased by $5.0 million. In addition, the covenants under our existing debt agreements would allow us to borrow a significant amount of additional debt. The more we become leveraged, the more we, and in turn our security holders, become exposed to the risks described above under " Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from servicing our debt." We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful. Our ability to satisfy our other debt obligations will depend upon, among other things: our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; and the future availability of borrowings under our senior secured credit facility, the availability of which depends on, among other things, our complying with the covenants in our senior secured credit facility.
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We cannot assure you that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our senior secured credit facility or otherwise, in an amount sufficient to fund our liquidity needs. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCautionary Statements for Forward-Looking Information." If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In addition, the terms of existing or future debt agreements, including our senior secured credit facility, the indentures 1 governing the existing 7.875% senior notes and 11 /2% senior subordinated notes may restrict us from adopting some of these alternatives. In the absence of sufficient operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due. Furthermore, Apollo and its affiliates have no continuing obligation to provide us with debt or equity financing. We are a holding company and all of our assets are owned by and all of our net revenues are earned by our direct and indirect subsidiaries. Our ability to service our indebtedness depends upon the performance of these subsidiaries and their ability to pay dividends and make other distributions to us. We are a holding company and all of our operations are conducted by our subsidiaries. Therefore, our cash flows and our ability to service indebtedness will be dependent upon cash dividends and distributions or other transfers from our subsidiaries. Payments to us by our subsidiaries will be contingent upon our subsidiaries' earnings. Our subsidiaries are separate and distinct legal entities and, except for the existing and future subsidiaries that will be subsidiary guarantors of our senior secured credit facility and notes, they will have no obligation, contingent or otherwise, to pay amounts due under our senior secured credit facility or notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payments. We have historically experienced net losses and negative working capital. Since the consummation of the Acquisition, we have had a history of net losses and negative working capital. For the years ended December 31, 2010, December 31, 2009 and December 31, 2008, we had net losses attributable to us of 22

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$142.6 million, $50.0 million and $88.7 million, respectively. We cannot assure you that we will not continue to report net losses in future periods. Our working capital deficit as of December 31, 2010, December 31, 2009 and December 31, 2008 was $76.9 million, $102.3 million and $147.8 million, respectively. Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. As part of the Acquisition, we made a special tax election referred to as a "338(h)(10) election" with respect to the companies constituting the Predecessor. Under the 338(h)(10) election, the companies constituting the Predecessor were deemed for U.S. federal income tax purposes to have sold and repurchased their assets at fair market value. By adjusting the tax basis in such assets to fair market value for U.S. federal income tax purposes, the aggregate amount of our tax deductions for depreciation and amortization increased, which we expect to reduce our cash taxes in the future. We expect that tax deductions attributable to the 338(h)(10) election to be up to approximately $120 million per year ending in 2020. However, our ability to utilize these deductions in any taxable period will be limited by the amount of taxable income we earn in such period. In addition, pursuant to Section 382 of the Internal Revenue Code, if we undergo an "ownership change" (generally defined as a greater than 50% change (by value) in our stock ownership within a three-year period), our ability to use our pre-change net operating loss carryforwards (including those attributable to the 338(h)(10) election) and certain other prechange tax attributes to offset our post-change income may be limited. Similar rules and limitations may apply for state tax purposes as well. The rules under Section 382 are highly complex, and we cannot give you any assurance that any transfers of our stock will not trigger an "ownership change" and cause such limitation to apply. We must replace the customers we lose in the ordinary course of business and if we fail to do so our revenue may decline and our customer base will decline, resulting in material adverse effects to our financial condition. We lose a substantial number of our customers each year in the ordinary course of business. The loss of customers may occur due to numerous factors, including: changing customer preferences; competitive price pressures; general economic conditions; customer dissatisfaction; credit or debit card holder turnover; and marketing partner and customer turnover.

Additionally, we expect to continue to see a net loss of members and end-customers as we continue our strategy to focus on overall profitability and generating higher revenue from each member rather than the size of our member base. Failure to obtain new customers who produce revenue at least equivalent to the revenue from the lost customers would result in a reduction in our revenue as well as a decrease in the number of our customers. Because of the large number of customers we need to replace each year, there can be no assurance that we can successfully replace them. In addition, even if we are successful in adding new customers to replace lost revenues, our profitability may still decline. We depend on various third-party vendors to supply certain products and services that we market. The failure of these vendors to provide these products or services could result in customer dissatisfaction and harm our business and financial condition. We depend on various third-party vendors to supply the products and services that we market. Many of our third-party vendors are independent contractors. As a result, the quality of service they provide is not entirely within our control. If any third-party vendor were to cease operations, or terminate, breach or not renew its contract with us, we may not be able to substitute a comparable third-party vendor on a timely basis or on terms as favorable to us. Additionally, if any third party vendor suffers interruptions, delays or quality problems, it could result in negative publicity and customer dissatisfaction which could reduce our revenues and profitability. With respect to the insurance programs that we offer, we are dependent on the insurance carriers that underwrite the insurance to obtain appropriate regulatory approvals. If we are required to use an alternative insurance carrier, it may materially increase the time required to bring an insurance related product to market. As we are generally obligated to continue providing our products and services to our customers even if we lose a third-party vendor, any disruption in our product offerings could harm our reputation and result in customer dissatisfaction. Replacing existing third-party vendors with more expensive third-party vendors could increase our costs and reduce our profitability. 23

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We derive a substantial amount of our revenue from the members and end-customers we obtained through only a few of our marketing partners. If one or more of our agreements with our marketing partners were to be terminated or expire, or one or more of our marketing partners were to reduce the marketing of our services, we would lose access to prospective members and end-customers and could lose sources of revenue. Although we market our programs and services through over 5,550 marketing partners, we derive a substantial amount of our net revenue from the customers we obtained through only a few of these marketing partners. In 2010, we derived approximately 49.4% of our net revenues from members and endcustomers we obtained through our 10 largest marketing partners. Many of our key marketing partner relationships are governed by agreements that may be terminated without cause by our marketing partners upon notice of as few as 90 days without penalty. Some of our agreements may be terminated by our marketing partners upon notice of as few as 30 days without penalty. Moreover, under many of these agreements, our marketing partners may cease or reduce their marketing of our services without terminating or breaching our agreements. Further, in the ordinary course of business, at any given time, one or more of our contracts with key marketing partners may be selected for bidding through a request for proposal process. A loss of our key marketing partners, a cessation or reduction in their marketing of our services or a decline in their businesses could have a material adverse effect on our future revenue from existing services of which such marketing partner's customers are customers of ours and on our ability to further market new or existing services through such marketing partner to prospective customers. There can be no assurance that one or more of our key or other marketing partners will not terminate their relationship with us, cease or reduce their marketing of our services or suffer a decline in their business. If a key marketing partner terminates or does not renew its relationship with us and we are required to cease providing our services to its customers, then we could lose significant sources of revenue. Our typical membership products agreements with marketing partners provide that after termination of the contract we may continue to provide our services to existing members under the same economic arrangements that existed before termination. Under certain of our insurance products agreements, however, marketing partners may require us to cease providing services to existing customers after time periods ranging from 90 days to five years after termination of the agreement. Also, under agreements with our marketing partners for which we market under a wholesale arrangement and have not incurred any marketing expenditures, our marketing partners generally may require us to cease providing services to existing customers upon termination of the wholesale arrangement. Further, marketing partners under certain agreements also may require us to cease providing services to their customers under existing arrangements if the contract is terminated for material breach by us. If one or more of these marketing partners were to terminate our agreements with them, and require us to cease providing our services to customers, then we could lose significant sources of revenue. Our profitability depends on members and end-customers continuing their relationship with us. Increased loss of customers could impair our profitability. We generally incur losses and negative cash flow during the initial year of an individual member or end-customer relationship, as compared to renewal years. This is due primarily to the fact that the costs associated with obtaining and servicing a new retail member and end-customer often exceed the fee paid to us for the initial year. In addition, we experience a higher percentage of cancellations during the initial membership period compared to renewal periods. Members and end-customers may cancel their arrangement at any time during the program period and, for our annual bill customers, we are typically obligated to refund the unused portion of their annual program fee. Additionally, an increase in cancellations of our members' credit and debit cards by their card issuers as a result of payment delinquencies or for any other reason, could result in a loss of members and end-customers and reduce our revenue and profitability. Accordingly, our profitability depends on recurring and sustained renewals and an increase in the loss of members or end-customers could result in a loss of significant revenues and reduce our profitability. We depend, in part, on credit card processors to obtain payments for us. If our credit card processors are interrupted or negatively affected in any way it could result in delays in collecting payments or loss of future business and negatively impact our revenues and profitability. We depend, in part, on credit card processors to obtain payments for us. The credit card processors operate pursuant to agreements that may be terminated with limited prior notice. In the event a credit card processor ceases operations or terminates its agreement with us, there can be no assurance a replacement credit card processor could be retained on a timely basis, if at all. Any service interruptions, delays or quality problems could result in delays in our collection of payments, which would reduce our revenues and profitability. Further, to the extent credit card processors or credit card issuing banks suffer a loss of revenues or business as a result of internal policy changes or any future enacted regulations or legislation, our revenues and profitability may be adversely affected. 24

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The increase in the share of monthly payment programs in our program mix may adversely affect our cash flows. We have traditionally marketed membership programs which have up-front annual membership fees. However, over the last six years, we expanded our marketing of membership programs for which membership fees are payable in monthly installments. Approximately 96% of our domestic new member and end-customer enrollments for the year ended December 31, 2010 were in monthly payment programs. Our increased emphasis on monthly payment programs adversely affects our cash flow in the short term because the membership fee is collected over the course of the year rather than at the beginning of the membership term as with annual billing. We may be unable to achieve annual Adjusted EBITDA growth in future periods. We may not be able to achieve annual Adjusted EBITDA growth in future periods. A variety of risks and uncertainties could cause us to not achieve Adjusted EBITDA growth, including, among others, business, economic and competitive risks and uncertainties discussed under "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCautionary Statements for Forward-Looking Information." In order to achieve Adjusted EBITDA growth in future periods, we must continue to implement our business strategy, achieve our target minimum returns on investment for our marketing expenditures, maintain or exceed the renewal rate and profitability of our customer base, retain our key marketing partners and expand those relationships, grow our international operations, and experience no material adverse developments that would impact our cost structure, or material adverse developments in the regulatory environment in which we operate, among other things. Accordingly, we cannot assure you that we will be able to achieve Adjusted EBITDA growth for any future period. Increases in insurance claim costs will negatively impact the revenues and profitability of our Insurance business. Our commission revenue from insurance programs is reported net of insurance cost. The major component of insurance cost represents claim costs, which are not within our control. While we seek to limit our exposure on any single insured and to recover a portion of benefits paid by ceding reinsurance to reinsurers, significant unfavorable claims experience will reduce our revenues and profitability. Our business is highly competitive. We may be unable to compete effectively with other companies in our industry that have financial or other advantages and increased competition could lead to reduced market share, a decrease in margins and a decrease in revenue. We believe that the principal competitive factors in our industry include the ability to identify, develop and offer innovative membership, insurance, package enhancement and loyalty programs, products and services, the quality and breadth of the programs, products and services offered, competitive pricing and in-house marketing expertise. Our competitors offer programs, products and services similar to, or which compete directly with, those offered by us. These competitors include, among others, Aegon, Vertrue, Intersections, Sisk, Carlson Marketing Group, Assurant and Card Protection Plan. In addition, we could face competition if our current marketing partners were to develop and market their own in-house programs, products and services similar to ours. Furthermore, certain of our marketing partners (who may have greater financial resources and less debt than we do) have attempted, or are attempting, to market and/or provide certain competitive products to their customers, the marketing and servicing of which historically were provided by us. Some of these existing and potential competitors have substantially larger customer bases and greater financial and other resources than we do. There can be no assurance that: our competitors will not increase their emphasis on programs similar to those we offer; our competitors will not provide programs comparable or superior to those we provide at lower costs to customers; our competitors will not adapt more quickly than we do to evolving industry trends or changing market requirements; new competitors will not enter the market; or other businesses (including our current marketing partners) will not themselves introduce in-house programs similar to those we offer.

In order to compete effectively with all of these competitors, we must be able to provide superior programs and services at competitive prices. In addition, we must be able to adapt quickly to evolving industry trends, a changing market, 25

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and increased regulatory requirements. Our ability to grow our business may depend on our ability to develop new programs and services that generate consumer interest. Failure to do so could result in our competitors acquiring additional market share in areas of consumer interest. Any increase in competition could result in price reductions, reduced gross margin and loss of market share. Additionally, because contracts between marketing partners and program providers are often exclusive with respect to a particular program, potential marketing partners may be prohibited for a period of time from contracting with us to promote a new program if the benefits and services included in our program are similar to, or overlap with, the programs and services provided by an existing program of a competitor. Internationally, package programs similar to ours are offered by some of the largest financial institutions in Europe. As these banks attempt to increase their own net revenues and margins by offering such programs in-house, we have been required to significantly reduce our prices when our agreements with these financial institutions come up for renewal in order to remain competitive. This pricing pressure on our international package offerings may continue in the future, thereby lowering the contribution to our operating results from such programs in the future. Our business is increasingly subject to U.S. and foreign government regulation, which could impede our ability to market our programs and services and reduce our profitability. We market our programs and services through various distribution media, including direct mail, point-of-sale marketing, telemarketing, online marketing and other methods. These media are regulated by state, federal and foreign laws and we believe that these media will be subject to increasing regulation, particularly in the area of consumer privacy. Such regulation may limit our ability to solicit or sign up new customers or to offer products or services to existing customers. Our U.S. membership and insurance products are subject to extensive regulation and oversight by the FTC, the FCC, state attorneys general and other state regulatory agencies, including state insurance regulators. Our programs and services involve the use of non-public personal information that is subject to federal consumer privacy laws, such as the Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, and various state laws governing consumer privacy, such as California's SB 1, SB 1386 and others. Additionally, telemarketing of our programs and services is subject to federal and state telemarketing regulations, including the FTC's Telemarketing Sales Rule, the FCC's Telephone Consumer Protection Act and implementing regulations, as well as various state telemarketing laws and regulations. Furthermore, our insurance products are subject to various state laws and regulations governing the business of insurance, including, without limitation, laws and regulations governing the administration, underwriting, marketing, solicitation or sale of insurance programs. Additional federal or state laws, including subsequent amendments to existing laws, could impede our ability to market our programs and services and reduce our revenues and profitability. The telemarketing industry has become subject to an increasing amount of federal and state regulation as well as general public scrutiny. For example, the Federal Telephone Consumer Protection Act of 1991 limits the hours during which telemarketers may call customers and prohibits the use of automated telephone dialing equipment to call certain telephone numbers. The Federal Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 and FTC regulations prohibit deceptive, unfair or abusive practices in telemarketing sales. The FTC's 2003 Amendment to its Telemarketing Sales Rule created a national "Do-Not-Call" Registry and certain states have enacted separate "Do-Not-Call" Registries. Both the FTC and state attorneys general have authority to prevent telemarketing activities deemed by them to be "unfair or deceptive acts or practices." Further, some states have enacted laws, and others are considering enacting laws, targeted directly at regulating telemarketing practices, including the creation of "Do-Not-Call" Registries, and any such laws could adversely affect or limit our operations. Similarly our operations in the European Economic Area are also subject to often strict regulation. These laws include, in particular, restrictions on our insurance intermediary activities as a regulated financial service requiring prior authorization and adherence to various rules on management and controls, documentation, complaints handling, financial promotions and the contracting process with consumers. In addition our marketing operations are subject to regulation including data protection legislation requiring notification and obtaining consent for marketing and also advertising rules regarding the content of marketing messages. "Distance selling" information and cancellation rules must also be followed when we contract with consumers at a distance including via post, phone or website. In the latter case, electronic commerce rules also come into play. Some of our products in the U.K. also involve the provision of services classed as consumer credit and therefore require additional licences to be applied for and maintained. Additionally, individuals in the U.K. and other European countries have rights to prevent direct marketing to them by telephone, fax or email. Recent additions to the regulatory landscape to which we are subject in the European Economic Area include restrictions on what are considered to be unfair or misleading commercial practices and new general rules on providing services involving information and basic complaints handling rules to be followed. While many of these rules are based on European Directives, different jurisdictions 26

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have varying implementation and enforcement approaches which can be difficult to navigate. New rules or changes in existing ones at a European or Member State level in countries where we operate could restrict our current practices and the loss of required authorization or licenses would severely inhibit our service offerings. Compliance with these federal, state and foreign regulations is generally our responsibility, and we could be subject to a variety of enforcement and/or private actions for any failure to comply with such regulations. Any changes to such regulations could materially increase our compliance costs. The risk of our noncompliance with any rules and regulations enforced by a federal or state consumer protection authority or an enforcement agency in a foreign jurisdiction may subject us or our management to fines or various forms of civil or criminal prosecution, any of which could impede our ability to market our programs and services and reduce our revenues and profitability. Certain types of noncompliance may also result in giving our marketing partners the right to terminate certain of our contracts. Also, the media often publicizes perceived noncompliance with consumer protection regulations and violations of notions of fair dealing with customers, and our industry is susceptible to peremptory charges by the media and others of regulatory noncompliance and unfair dealing. Consumer complaints with respect to our industry have resulted and may result in state and federal regulatory and other investigations. On May 27, 2009, the U.S. Senate Committee on Commerce, Science, and Transportation (the "Senate Committee") initiated an investigation into Webloyalty and Vertrue Inc., a competitor of the Company, in connection with their e-commerce marketing practices, including those relating to consumers' account number acquisition. On July 10, 2009, the Senate Committee expanded the scope of its investigation to include the Company. In the course of such investigation, the Senate Committee requested that the Company and Webloyalty provide certain information about their domestic online marketing practices, including those relating to the acquisition of consumers' credit or debit card account numbers automatically from their partners when a consumer enrolls in one of their programs immediately after making a purchase through one of their partners' web sites ("Online Data-pass Marketing"). On January 6, 2010, the Company sent a letter to the Senate Committee informing them of its decision, after careful consideration of the fluid and iterative nature of the internet, to cease Online Data-pass Marketing for its membership programs and make certain additional changes to the disclosures in its online marketing and fulfillment. Webloyalty sent a similar letter to the Senate Committee on January 11, 2010. Specifically, the Company and Webloyalty, when marketing their membership programs online, now require consumers to provide all 16 digits of their credit or debit card when enrolling in the Company's or Webloyalty's membership programs in the online post-transaction environment. On December 29, 2010, legislation entitled the "Restore Online Shoppers' Confidence Act" was enacted. The legislation prohibits Online Data-pass Marketing and requires additional disclosure relating to the online marketing of, and billing for, membership programs in the online post-transaction environment. Since the Company and Webloyalty had ceased Online Data-pass Marketing more than eleven months prior to the enactment of such legislation, we do not expect such legislation to have a material adverse effect on our business. Over the past several years, there has also been proposed legislation in several states that may interfere with our marketing practices. For example, over the past several years many states have proposed legislation that would allow customers to limit the amount of unsolicited direct mail they receive. To date, we are not aware of any state that has actually passed legislation that would create a "Do-Not-Mail" registry or which would otherwise allow customers to restrict the amount of unsolicited direct mail that they receive. We believe there are two states that are currently considering some form of "Do-Not-Mail" legislation. Additionally, several bills have been proposed in Congress that could restrict the collection and dissemination of personal information for marketing purposes. If such legislation is passed in one or more states or by Congress, it could impede our ability to market our programs and services and reduce our revenues and profitability. We are subject to legal actions and governmental investigations that could require us to incur significant expenses and, if resolved adversely to us, could impede our ability to market our programs and services, result in a loss of members and end-customers, reduce revenues and profitability and damage our reputation. We are involved in claims, legal proceedings and governmental inquiries related to employment matters, contract disputes, business practices, trademark and copyright infringement claims and other commercial matters. While we cannot predict the outcome of pending suits, claims, investigations and inquiries, the cost of responding to and defending such suits, as well as the ultimate resolution of any of these matters, could require us to incur significant expenses and, if resolved adversely to us, could impede our ability to market our programs and services, result in a loss of members and end-customers, reduce revenues and profitability and damage our reputation. There can be no assurance that our accruals for legal actions or investigations will be sufficient to satisfy all related claims and expenses. Between December 2008 and December 2010, the Company and Webloyalty received inquiries from numerous state attorneys general relating to the marketing of their membership programs and their compliance with consumer protection statutes. The Company and Webloyalty have responded to the states' request for documents and information and are in active discussions with such states regarding their investigations and the resolution of these matters. Settlement of such matters may 27

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include payment by the Company and Webloyalty of the costs of the states' investigation, restitution to consumers and injunctive relief. We rely on our marketing partners to provide limited customer information to us for certain marketing purposes and to approve our marketing materials. If our marketing partners make significant changes to the materials that decrease results or if they limit the information that they provide to us, our ability to generate new customers may be adversely affected. Certain of our marketing efforts depend in part on certain limited customer information being made available to us by our marketing partners. There can be no assurance that our marketing partners will, or will be able to, continue to provide us with the use of such customer information. Our marketing efforts are largely dependent on obtaining approval of the solicitation materials from our marketing partners. We market our programs and services based on tested marketing materials, and any significant changes to those materials that are required by our marketing partners could negatively affect our results. The material terms of each marketing campaign must be mutually agreed upon by the parties. There can be no assurance that we will obtain approvals of our marketing materials from our marketing partners, and the failure to do so could impede our ability to market our programs and services, result in a loss of members and end-customers, and reduce our revenues and profitability. A significant portion of our business is conducted with financial institution marketing partners. A prolonged downturn or continuing consolidation in the financial institution industry may have an adverse impact on our business. Our future success is dependent in large part on continued demand for our programs and services within our marketing partners' industries. In particular, the customers of our financial institution marketing partners accounted for a significant amount of our members and end-customers and revenues in 2010. In recent years, a number of our existing financial institution marketing partners have been acquired by or merged with other financial institutions. In the event one of our marketing partners undergoes a consolidation and the consolidated financial institution does not have an agreement with us or does not wish to continue marketing with us, we could experience an adverse impact on our revenue. In addition, the consolidation of financial institutions may result in increased leverage to pressure us to lower our prices. If consolidated marketing partners pressure us to lower our prices, we may experience an adverse impact on our revenue. Consolidation may also lead to fewer potential customers of marketing partners to whom we can sell our programs and services. Therefore, a significant and prolonged downturn in the industry, a trend in that industry to reduce or eliminate its use of our programs, products and services, or further consolidation in the industry leading customers to use fewer credit cards could result in a loss of members and end-customers and reduce our revenues and profitability. In addition, some of our financial institution marketing partners are in the mortgage business. Although the customers of our marketing partners in the mortgage business accounted for approximately 1% of our revenues in 2010, a continuing and prolonged downturn in the mortgage industry could reduce our revenues and profitability. In addition, the "Credit CARD Act of 2009" prohibits, among other things, certain fees and increases in interest rates that may be charged by credit card issuers. While the long-term impact of this legislation remains uncertain, the law has resulted in some credit card issuers lowering available credit limits and raising annual credit card fees and interest rates, which could in turn reduce the willingness of customers to use their credit cards. The current macroeconomic environment could exacerbate these effects, leading to increased charge-offs by credit card issuers. All of these potential effects could adversely affect our ability to attract new customers and maintain existing customers. We may lose members or end-customers and significant revenue if we reduce our planned expenditures to grow our business, our existing services become obsolete, or if we fail to introduce new services with broad consumer appeal or fail to do so in a timely or cost-effective manner. Our growth depends upon investing in our business. Although revenue from our existing customer base has historically generated over 80% of our next twelve months net revenue, we cannot assure you that this will continue. Accordingly, our growth will depend on our developing and successfully introducing new products and services that generate member and end-customer interest. Our failure to invest in our business, introduce these products or services or to develop new products or services, or the introduction or announcement of new products or services by competitors, could render our existing offerings noncompetitive or obsolete. There can be no assurance that we will be successful in developing or introducing new products and services. Our failure to develop, introduce or expand our products and services or to make other investments in our business, such as marketing or capital expenditures, could result in a loss of members and end-customers and reduce our revenues and profitability. 28

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Our failure to protect private data could damage our reputation and cause us to expend capital and other resources to protect against future security breaches. Certain of our services are based upon the collection, distribution and protection of sensitive private data. Unauthorized users might access that data, and human error or technological failures might cause the wrongful dissemination of that data. If we experience a security breach, the integrity of certain of our services may be affected and such a breach could violate certain of our marketing partner agreements. We have incurred, and may incur in the future, significant costs to protect against the threat of a security breach. We may also incur significant costs to alleviate problems that may be caused by future breaches. Any breach or perceived breach could subject us to legal claims from marketing partners or customers under laws (such as California's SB 1386 and regulations promulgated by the FSA and European data protection regimes) that govern breaches of electronic data systems containing non-public personal information. There is no assurance that we would prevail in such litigation. Moreover, any public perception that we have engaged in the unauthorized release of, or have failed to adequately protect, private information could adversely affect our ability to attract and retain marketing partners, members and endcustomers. In addition, unauthorized third parties might alter information in our databases, which would adversely affect both our ability to market our services and the credibility of our information. Our success and growth depends to a significant degree upon intellectual property rights. We have a significant intellectual property portfolio and have allocated considerable resources toward intellectual property maintenance, prosecution and enforcement. We may be unable to deter infringement or misappropriation of our data and other proprietary information, detect unauthorized use or take appropriate steps to enforce our intellectual property rights. Any unauthorized use of our intellectual property could make it more expensive for us to do business and consequently harm our business. Failure to protect our existing intellectual property rights may result in the loss of valuable technologies or having to pay other companies for infringing on their intellectual property rights. We rely on patent, trade secret, trademark and copyright law as well as judicial enforcement to protect such technologies. Some of our technologies are not covered by any patent or patent application. In addition, our patents could be successfully challenged, invalidated, circumvented or rendered unenforceable. Furthermore, pending patent applications may not result in an issued patent, or if patents are issued to us, such patents may not provide meaningful protection against competitors or against competitive technologies. We also license patent rights from third parties. To the extent that such third parties cannot protect and enforce the patents underlying such licenses or, to the extent such licenses are cancelled or not renewed, our competitive position and business prospects may be harmed. We could face patent infringement claims from our competitors or others alleging that our processes or programs infringe on their proprietary technology. If we were subject to an infringement suit, we may be required to (1) incur significant costs to license the use of proprietary technology, (2) change our processes or programs or (3) stop using certain technologies or offering the infringing program entirely. Even if we ultimately prevail in an infringement suit, the existence of the suit could cause our customers to seek other programs that are not subject to infringement suits. Any infringement suit could result in significant legal costs and damages, impede our ability to market or provide existing programs or create new programs, reduce our revenues and profitability and damage our reputation. In addition, effective patent, trademark, copyright and trade secret protection may be unavailable or limited in some foreign countries. In some countries we do not apply for patent, trademark, or copyright protection. We also rely upon unpatented proprietary expertise, continuing technological innovation and other trade secrets to develop and maintain our competitive position. While we generally enter into confidentiality agreements with our employees and third parties to protect our intellectual property, such confidentiality agreements could be breached and may not provide meaningful protection for our trade secrets or proprietary expertise. Adequate remedies may not be available in the event of an unauthorized use or disclosure of our trade secrets and expertise. In addition, others may obtain knowledge of our trade secrets through independent development or other access by legal means. The failure of our patents or confidentiality agreements to protect our processes, apparatuses, technology, trade secrets and proprietary expertise and methods could jeopardize our critical intellectual property which could give our competitors an advantage in the marketplace, reduce our revenues and profitability and damage our reputation. Our business is highly dependent on our existing computer, billing, communications and other technological systems. Any temporary or permanent loss of any of our systems could have a negative effect on our business, financial condition and results of operations. Our business depends upon ongoing investments in advanced computer database and telecommunications technology as well as our ability to protect our telecommunications and information technology systems against damage or system interruptions from natural disasters, technical failures and other events beyond our control. In order to compete effectively and to meet our marketing partners' and customers' needs, we must maintain our systems as well as invest in 29

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improved technology. A temporary or permanent loss of any of our systems or networks could cause significant damage to our reputation and could result in a loss of revenue. In addition, we receive credit data electronically, and this delivery method is susceptible to damage, delay or inaccuracy. A significant portion of our business involves telephonic customer service as well as mailings, both of which depend upon the data generated from our computer systems. Unanticipated problems with our telecommunications and information technology systems may result in a significant system outage or data loss, which could interrupt our operations. Our infrastructure may also be vulnerable to computer viruses, hackers or other disruptions entering our systems from the credit reporting agencies, our marketing partners and members and end-customers or other authorized or unauthorized sources. Any damage to our telecommunications and information technology systems, failure of communication links or other loss that causes interruption in, or damage to, our operations could impede our ability to market our programs and services, result in a loss of members and end-customers and reduce our revenues and profitability. If we are unable to meet the rapid changes in technology, our services and proprietary technology and systems may become obsolete. Due to the cost and management time required to introduce new services and enhancements, we may not be able to respond in a timely manner to avoid becoming uncompetitive. To remain competitive, we must meet the challenges of the introduction by our competitors of new services using new technologies or the introduction of new industry standards and practices. Additionally, the vendors we use to support our technology may not provide the level of service we expect or may not be able to provide their product or service on commercially reasonable terms or at all. We depend, in part, on the postal and telephone services we utilize to market and service our programs. An interruption of, or an increase in the billing rate for, such services could adversely affect our business. We depend, in part, on the postal and telephone services we utilize to market and service our programs. An interruption of, or an increase in the billing rate for, such services could increase our costs and expenses and reduce our profitability. We market and service our programs by various means, including through mail and via telephone. Accordingly, our business is dependent on the postal and telephone services provided by the U.S. Postal Service and international postal service, and various local and long distance telephone companies. Any significant interruption of such services or any limitations in their ability to provide us with increased capacity could impede our ability to market our programs and services, result in a loss of members and end-customers and reduce our revenues and profitability. In addition, the U.S. Postal Service and international postal service increase rates periodically and significant increases in rates could adversely impact our business. We may not realize anticipated benefits from recent or future acquisitions or have the ability to complete future acquisitions. From time to time, we pursue acquisitions as a means of enhancing our scale and market share, such as our recent acquisitions of Connexions in July 2010 and Webloyalty in January 2011. In general, the success of our acquisition strategy will depend upon our ability to find suitable acquisition candidates on favorable terms and to finance and complete these transactions. In addition, upon completion of an acquisition, such as the Connexions and Webloyalty acquisitions, we may encounter a variety of difficulties, including trouble integrating the acquired business into our operations, the possible defection of key employees or of a significant number of employees, the loss in value of acquired intangibles, the diversion of management's attention and unanticipated problems or liabilities. These difficulties may adversely affect our ability to realize anticipated cost savings and revenue growth from our acquisitions. In addition, acquisitions may not be as accretive to our earnings as we expect or at all, and may negatively impact our results of operations through, among other things, the incurrence of debt to finance any acquisition, non-cash write-offs of goodwill or intangibles and increased amortization expenses in connection with intangible assets. Acquisition integration activities can also put further demands on management, which could negatively impact operating results. Our international operations are subject to additional risks not encountered when doing business in the U.S., and our exposure to these risks will increase as we expand our international operations. We have a limited history of conducting certain of our international operations, which involve risks that may not exist when doing business in the U.S. In order to achieve widespread acceptance in each country we enter, we must tailor our services to the unique customs and cultures of that country. Learning the customs and cultures of various countries, 30

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particularly with respect to consumer preferences, is a difficult task and our failure to do so could slow our growth in international markets. In addition, we are subject to certain risks as a result of having international operations, and from having operations in multiple countries generally, including: fluctuations in foreign currency exchange rates; delays in the development of the Internet as a broadcast, advertising and commerce medium in overseas markets; difficulties in staffing and managing operations due to distance, time zones, language and cultural differences, including issues associated with establishing management systems infrastructure in various countries; differences and unexpected changes in regulatory requirements and exposure to local economic conditions; preference of local populations for local providers; restrictions on the withdrawal of non-U.S. investment and earnings, including potentially substantial tax liabilities if we repatriate any of the cash generated by our international operations back to the U.S.; diminished ability to legally enforce our contractual rights; currency exchange restrictions; and withholding and other taxes on remittances and other payments by subsidiaries.

We cannot assure you that one or more of these factors will not have a material adverse effect on our international operations and consequently on our business, financial condition and results of operations. Our future success depends on our ability to retain our key employees. We are dependent on the services of Nathaniel J. Lipman, our Chairman and Chief Executive Officer, and other members of our senior management team to remain competitive in our industry. The loss of Mr. Lipman or any other member of our senior management team could have an adverse effect on us. There is a risk that we will not be able to retain or replace these key employees. All of our current executive officers are subject to employment conditions or arrangements that contain post-employment non-competition provisions. However, these arrangements permit the employees to terminate their employment. We are controlled by Apollo who will be able to make important decisions about our business and capital structure. Approximately 69% of the common stock of Holdings is beneficially owned by investment funds affiliated with Apollo. As a result, Apollo controls us and has the power to elect a majority of the members of our board of directors, appoint new management and approve any action requiring the approval of the holders of Holdings' stock, including approving acquisitions or sales of all or substantially all of our assets, subject to the terms of the Holdings Stockholder Agreement (as defined in "Item 13. Certain Relationships and Related Transactions, and Director IndependenceWebloyalty Acquisition"). Under the Holdings Stockholder Agreement, investment funds affiliated with Apollo and General Atlantic currently have the right to nominate seven and three, respectively, of our eleven directors. In addition, the Holdings Stockholder Agreement provides for the nomination of Mr. Nathaniel J. Lipman as a director in his capacity as our Chief Executive Officer. The directors elected by Apollo have the ability to control decisions affecting our capital structure, including the issuance of additional capital stock, the implementation of stock repurchase programs, the declaration of dividends and the purchase of our indebtedness or Holdings' indebtedness, in each case, subject to the terms of our senior secured credit facility and the indentures governing the existing 7.875% senior notes 1 and 11 /2% senior subordinated notes. Additionally, Apollo is in the business of investing in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Apollo may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. Item 1B. Unresolved Staff Comments

Not applicable. 31

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Item 2.

Properties

We are currently headquartered in Stamford, Connecticut in a 140,000 square foot facility that houses management offices as well as the marketing and sales operations for our largest customers. Our corporate data center is in Trumbull, Connecticut, with disaster recovery operations provided by a backup site in Westerville, Ohio. Some applications are also housed in Centennial, Colorado, Slough, U.K., and Oslo, Norway. The table below lists all of our facilities as of March 1, 2011, all of which are leased.
Location Function

U.S. Facilities Stamford, CT San Carlos, CA Norwalk, CT (2 sites) Shelton, CT Trumbull, CT Boise, ID Eden Prairie, MN St. Louis, MO Dublin, OH Westerville, OH Richmond, VA Franklin, TN (3 sites) International Facilities Slough, United Kingdom Brussels, Belgium Copenhagen, Denmark Ennis, Ireland Hamburg, Germany Johannesburg, South Africa Kent, United Kingdom Kettering, United Kingdom London, United Kingdom Madrid, Spain Milan, Italy Oslo, Norway Paris, France Portsmouth, United Kingdom (2 sites) Stockholm, Sweden Villepinte, France

Global Headquarters Sales and Support Global Headquarters of Webloyalty and former Global Headquarters of the Company Call Center Call Center/ Data Ops Center Call Center Connexions Headquarters Call Center Software Development Call Center Loyalty Products Operations Insurance and Package Sales, Marketing and Administration, Print Fulfillment Center International Headquarters Sales and Marketing Sales and Marketing Administration, Sales, Marketing and Call Center Sales, Marketing and Call Center Sales and Marketing Call Center Call Center Sales and Marketing Sales and Marketing Sales, Marketing and Call Center Sales, Marketing and Call Center Sales and Marketing Administration and Call Center Sales and Marketing Administration and Call Center

We have non-cancelable operating leases covering various facilities and equipment. Our rent expense for the years ended December 31, 2010, 2009 and 2008 was $16.4 million, $13.4 million (net of sublease rental income of $0.1 million) and $13.1 million (net of sublease rental income of $0.4 million), respectively. Item 3. Legal Proceedings

In the ordinary course of business, we are involved in claims, legal proceedings and governmental inquiries related to employment matters, contract disputes, business practices, trademark and copyright infringement claims and other commercial matters. We, including Webloyalty, are also a party to lawsuits which were brought against us and our affiliates and which purport to be a class action in nature and allege that we violated certain federal or state consumer protection statutes (as described below). We intend to vigorously defend ourselves against such lawsuits. On November 12, 2002, a class action complaint (the "November 2002 Class Action") was filed against Sears, Roebuck & Co., Sears National Bank, Cendant Membership Services, Inc. and Allstate Insurance Company in the Circuit Court of Alabama for Greene County alleging, among other things, breach of contract, unjust enrichment, breach of duty of good faith and fair dealing and violations of the Illinois consumer fraud and deceptive practices act. The case was removed to the U.S. District Court for the Northern District of Alabama but was remanded to the Circuit Court of Alabama for Greene County. We filed a motion to compel arbitration, which was granted by the court on January 31, 2008. In granting our motion, 32

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the court further ordered that any arbitration with respect to this matter take place on an individual (and not class) basis. On February 28, 2008, plaintiffs filed a motion for reconsideration of the court's order. On April 9, 2010, the court denied plaintiffs' motion for reconsideration. The time for plaintiffs to file an appeal has expired and, to date, no arbitration claim has been filed by plaintiffs. On June 17, 2010, a class action complaint was filed against the Company and Trilegiant Corporation ("Trilegiant") in the United States District Court for the District of Connecticut. The complaint asserts various causes of action on behalf of a putative nationwide class and a California-only subclass in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, Connecticut Unfair Trade Practices Act, California Consumers Legal Remedies Act, and California False Advertising Law. On September 29, 2010, the Company filed a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 24, 2011, the court denied the Company's motion. The case is currently pending before the court. There has been limited discovery and motion practice to date. On November 10, 2010, a class action complaint was filed against the Company, Trilegiant, 1-800-Flowers.com, and Chase Bank USA, N.A. in the United States District Court for the Eastern District of New York. The complaint asserts various causes of action on behalf of several putative nationwide classes that largely overlap with one another. The claims asserted are in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, Connecticut Unfair Trade Practices Act, and New York's General Business Law. On January 28, 2011, pursuant to the court's motion procedures, the Company filed a letter seeking permission to file a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 16, 2011, the court entered a briefing schedule on the Company's proposed motion, which requires that all briefings be concluded by June 8, 2011. The court did not indicate when it would rule on such motion. On June 25, 2010, a class action lawsuit was filed against Webloyalty and one of its clients in the United States District Court for the Southern District of California alleging, among other things, violations of the Electronic Fund Transfer Act and Electronic Communications Privacy Act, unjust enrichment, fraud, civil theft, negligent misrepresentation, fraud, California Consumers Legal Remedies Act violations, false advertising and California Consumer Business Practice violations. This lawsuit relates to Webloyalty's alleged conduct occurring on and after October 1, 2008. On February 17, 2011, Webloyalty filed a motion to dismiss the amended complaint in this lawsuit. A hearing has been scheduled on the motion to dismiss for April 11, 2011. On August 27, 2010, another substantially similar class action lawsuit was filed against Webloyalty, one of its former clients and one of the credit card associations in the United States District Court for the District of Connecticut alleging, among other things, violations of the Electronic Fund Transfer Act, Electronic Communications Privacy Act, unjust enrichment, civil theft, negligent misrepresentation, fraud and Connecticut Unfair Trade Practices Act violations. This lawsuit relates to Webloyalty's alleged conduct occurring on and after October 1, 2008. On December 23, 2010, Webloyalty filed a motion to dismiss this lawsuit. The court has not yet ruled on Webloyalty's motion. On February 18, 2011, a class action complaint was filed against Webloyalty and one of its clients in the District Court for the Western District of Virginia. The complaint asserts various causes of action on behalf of a putative nationwide class, including unfair and deceptive acts and practices, unjust enrichment, invasion of privacy, money had and received, larceny, obtaining money by false pretense, trover, conversion, detinue, trespass, fraud, misrepresentation and computer fraud and violations under the Electronic Communications Privacy Act in connection with the sale by Webloyalty of its membership programs. The complaint was served on us on March 3, 2011. We have not yet responded to the complaint, but we intend to vigorously defend ourselves against this lawsuit. On May 27, 2009, the U.S. Senate Committee on Commerce, Science, and Transportation (the "Senate Committee") initiated an investigation into Webloyalty and Vertrue Inc., a competitor of the Company, in connection with their e-commerce marketing practices, including those relating to consumers' account number acquisition. On July 10, 2009, the Senate Committee expanded the scope of its investigation to include the Company. In the course of such investigation, the Senate Committee requested that the Company and Webloyalty provide certain information about their domestic online marketing practices, including those relating to the acquisition of consumers' credit or debit card account numbers automatically from their partners when a consumer enrolls in one of their programs immediately after making a purchase through one of their partners' web sites ("Online Data-pass Marketing"). On January 6, 2010, the Company sent a letter to the Senate Committee informing them of its decision, after careful consideration of the fluid and iterative nature of the internet, to cease Online Data-pass Marketing for its membership programs and make certain additional changes to the disclosures in its online marketing and fulfillment. Webloyalty sent a similar letter to the Senate Committee on January 11, 2010. Specifically, the Company and Webloyalty, when marketing their membership programs online, now require consumers to provide all 16 digits of their credit or debit card when enrolling in the Company's or Webloyalty's membership programs in the online post-transaction environment. On December 29, 2010, legislation entitled the "Restore Online Shoppers' Confidence Act" was enacted. The legislation prohibits Online Data-pass Marketing and requires additional 33

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disclosure relating to the online marketing of, and billing for, membership programs in the online post-transaction environment. Since the Company and Webloyalty had ceased Online Data-pass Marketing more than eleven months prior to the enactment of such legislation, we do not expect such legislation to have a material adverse effect on our business. In addition, between December 2008 and December 2010, the Company and Webloyalty received inquiries from numerous state attorneys general relating to the marketing of their membership programs and their compliance with consumer protection statutes. The Company and Webloyalty have responded to the states' request for documents and information and are in active discussions with such states regarding their investigations and the resolution of these matters. Settlement of such matters may include payment by the Company and Webloyalty of the costs of the states' investigation, restitution to consumers and injunctive relief. In that regard, in August 2010, the Company entered into a voluntary Assurance of Discontinuance with the New York Attorney General's Office. Pursuant to that settlement, the Company agreed to cease in New York its online marketing practices relating to the acquisition of consumers' credit or debit card account numbers automatically from its retailer or merchant marketing partners when a consumer enrolls in one of the Company's programs after making a purchase through one of such partners' web sites as previously agreed to with the Senate Committee on January 6, 2010. Additionally, the Company agreed, among other things, with the New York Attorney General's Office to cease in New York "live check" marketing whereby a consumer enrolls in a program or service by endorsing and cashing a check. As part of such settlement, the Company paid $3 million in fees, costs, and penalties and approximately $1.6 million as restitution to New York consumers in addition to refund claims. The Company will pay the remaining restitution owed to New York consumers, which amount is not expected to be material, in fiscal year 2011. As of September 13, 2010, Webloyalty also entered into a similar settlement agreement with the New York Attorney General's Office. Pursuant to that settlement, Webloyalty agreed to pay $5.2 million in costs, fines and penalties, establish a restitution program for certain New York residents that joined a Webloyalty membership program between October 1, 2008 and January 13, 2010 and submitted a valid claim form, and implement changes to Webloyalty's marketing of its membership programs. All costs, fines and penalties relating to the settlement were paid by Webloyalty in October 2010. All restitution to New York consumers and the remaining costs relating to the administration of the settlement will be paid by Webloyalty in fiscal year 2011. The Company and Trilegiant are also a party to lawsuits arising out of the inquiries made by the state attorneys general. On October 14, 2010, the Company and Trilegiant filed a declaratory relief action against the State of South Carolina, in the Court of Common Pleas of South Carolina for the County of Richland, Fifth Judicial Circuit, seeking a declaratory judgment that their marketing practices comply with South Carolina law. The Company and Trilegiant also seek a declaratory judgment that the State may not appoint private counsel to bring an action against the Company and Trilegiant on the State's behalf. The State has filed a motion to dismiss both requests for declaratory judgment. The court has not yet ruled on the State's motion. In response to the action commenced by the Company and Trilegiant, on December 17, 2010, the State of South Carolina appointed private counsel and filed a civil action against the Company and Trilegiant, in the Court of Common Pleas of South Carolina for the County of Spartanburg, Seventh Judicial Circuit, under the South Carolina Unfair Trade Practices Act, seeking civil penalties, restitution and an injunction. On December 31, 2010, the State filed its First Amended Complaint naming the Company, Trilegiant, and certain current and former officers as defendants. Also on December 31, 2010, the State filed its Notice of Motion and Motion for a Temporary Injunction. The parties have agreed to informally "stay" all of the above proceedings to attempt to resolve the matters through settlement. On November 24, 2010, the State of Iowa filed an action against the Company, Trilegiant, and our Chief Executive Officer, in the Iowa District Court for Polk County. The State alleges violations of Iowa's Buying Club Law and Consumer Fraud Act, and seeks injunctive relief as well as monetary relief. The State has not yet formally served its complaint on defendants because the parties are discussing possible steps toward resolution. Based on the representations made by the State, we expect our Chief Executive Officer to be removed as a defendant in the complaint. We believe that the amount accrued for the above matters is adequate, and the reasonably possible loss beyond the amounts accrued will not have a material adverse effect on our financial condition, results of operations, or cash flows based on information currently available. However, litigation is inherently unpredictable and, although we believe that accruals are adequate and we intend to vigorously defend ourselves against such matters, unfavorable resolution could occur, which could have a material adverse effect on our financial condition, results of operations or cash flows. Item 4. (Removed and Reserved) 34

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PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

We are a wholly-owned subsidiary of Holdings, and there is no established trading market for our common stock. As of March 1, 2011, approximately 69% of the common stock of Holdings was beneficially owned by investment funds affiliated with our principal equity sponsor, Apollo. During 2009 and 2010, we paid cash dividends to Holdings aggregating $25.1 million and $119.8 million, respectively. In addition, in the first quarter of 2011, we paid dividends to Holdings aggregating approximately $323.4 million. Our amended and restated senior secured credit facility and the indentures 1 governing our 7.875% senior notes and 11 /2% senior subordinated notes contain covenants that limit our ability to pay dividends. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition, Liquidity and Capital Resources." Item 6. Selected Financial Data

The following table presents our selected historical consolidated and combined financial data for the periods indicated. The following information should be read in conjunction with, and is qualified by reference to, the section entitled "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," and our audited consolidated financial statements and the notes thereto included elsewhere herein. The consolidated balance sheet data of Affinion as of December 31, 2010 and 2009 and the related consolidated statements of operations data and cash flows data of Affinion for each of the three years in the period ended December 31, 2010, are derived from our audited consolidated financial statements and the notes thereto included elsewhere herein. The consolidated balance sheet data of Affinion as of December 31, 2008, 2007 and 2006 has been derived from the audited balance sheet of Affinion as of December 31, 2008, 2007 and 2006, respectively, and the related consolidated statements of operations data and cash flow data of Affinion for the years ended December 31, 2007 and 2006 has been derived from the audited consolidated financial statements of Affinion for the years ended December 31, 2007 and 2006, respectively, none of which is included herein.
For the Years Ended December 31, 2010 2009 2008 2007 2006

Consolidated Statement of Operations Data: Net revenues Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions Operating costs General and administrative Facility exit costs Goodwill impairment Depreciation and amortization Total expenses Income (loss) from operations Interest income Interest expense Loss on extinguishment of debt Other income (expense), net Loss before income taxes and non-controlling interest Income tax expense Net loss Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. Consolidated Balance Sheet Data (at period end): Cash and cash equivalents (excludes restricted cash) Working capital deficit Total assets Total debt Total Affinion Group Inc. deficit 35

$ 1,376.3 $ 1,376.9 $ 1,409.9 $ 1,321.0 $ 1,137.7

583.3 618.2 646.9 375.8 356.4 360.0 157.6 105.1 98.4 8.0 195.2 201.0 260.2 1,319.9 1,280.7 1,365.5 56.4 96.2 44.4 11.6 8.1 1.7 (158.0) (129.7) (142.9) (37.0) (1.8) (12.0) 16.3 (128.8) (37.4) (80.5) (12.8) (11.7) (7.5) (141.6) (49.1) (88.0) (1.0) (0.9) (0.7) $ (142.6) $ (50.0) $ (88.7) $ $

608.4 334.3 113.2 310.8 1,366.7 (45.7) 4.9 (145.2) (0.1) (186.1) (4.7) (190.8) (0.3) (191.1) $

580.9 326.1 106.9 15.5 396.8 1,426.2 (288.5) 5.7 (148.8) (431.6) (6.3) (437.9) (0.3) (438.2)

121.1 $ 69.8 $ 36.3 $ 14.2 $ 84.3 (76.9) (102.3) (147.8) (245.9) (251.3) 1,515.2 1,469.4 1,460.6 1,601.2 1,889.5 1,694.3 1,443.4 1,367.3 1,347.5 1,408.4 (866.2) (608.0) (547.2) (405.5) (186.9)

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For the Years Ended December 31, 2010 2009 2008 2007 2006

Consolidated Cash Flows Data: Net cash provided by (used in): Operating activities Investing activities Financing activities Other Financial Data: Capital expenditures Ratio of earnings to fixed charges(1) (1)

121.8 (131.3) 63.4 39.9

102.8 (111.5) 41.4 39.9

103.1 (59.1) (19.2) 36.7

101.8 (77.4) (94.2) 26.9

98.3 (44.4) (85.4) 29.1

For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before income taxes and noncontrolling interests plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs and a portion of rental expense that management believes is representative of the interest component of rental expense. Our earnings were insufficient to cover fixed charges by $128.8 million, $37.4 million, $80.5 million, $186.1 million and $431.6 million for the years ended December 31, 2010, 2009, 2008, 2007 and 2006, respectively. (see Exhibit 12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges). Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7.

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our audited consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data." This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in "Item 1A. Risk Factors." Actual results may differ materially from those contained in any forward-looking statements. See " Cautionary Statements for Forward-Looking Information." Introduction Management's discussion and analysis of results of operations and financial condition ("MD&A") is provided as a supplement to and should be read in conjunction with our audited consolidated financial statements and the related notes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations. The MD&A is organized as follows: Overview. This section provides a general description of our business and operating segments, as well as recent developments that we believe are important in understanding our results of operations and financial condition and in anticipating future trends. Results of operations. This section provides an analysis of our results of operations comparing the years ended December 31, 2010 to 2009 and December 31, 2009 to 2008. This analysis is presented on both a consolidated basis and on an operating segment basis. Financial condition, liquidity and capital resources. This section provides an analysis of our cash flows for the years ended December 31, 2010, 2009 and 2008 and our financial condition as of December 31, 2010, as well as a discussion of our liquidity and capital resources. Critical accounting policies. This section discusses certain significant accounting policies considered to be important to our financial condition and results of operations and which require significant judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 2 to our audited consolidated financial statements included elsewhere herein.

Overview Description of Business We are a global leader in providing comprehensive customer engagement solutions that enhance or extend the relationship of millions of consumers with many of the largest and most respected companies in the world. We partner with these leading companies to develop and market programs that provide valuable services to their end-customers using our expertise in customer engagement, creative design and product development. These programs and services enable the companies we partner with to strengthen their customer relationships, as well as generate significant incremental revenue, generally in the form of commission payments paid by us, as well as strengthen their relationship with their end-customers, which can lead to increased acquisition of new customers, longer retention of existing customers, improved customer satisfaction rates and the increased use of other services provided by such companies. We refer to the leading companies that we work with to provide customer engagement and loyalty solutions as our marketing partners. We refer to subscribers as 36

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those customers to whom we provide services directly and have a contractual relationship with. We refer to as end-customers those consumers we service on behalf of a third party, such as our marketing partners with whom we have a contractual relationship. We have substantial expertise in deploying various forms of customer engagement communications, such as direct mail, inbound and outbound telephony and the Internet; and in bundling unique benefits to offer valuable products and services to the customers of our marketing partners on a highly targeted basis. We design customer engagement and loyalty solutions with an attractive suite of benefits that we believe are likely to interest and engage consumers based on their needs and interests, with a particular focus on programs offering lifestyle and protection benefits and programs which offer considerable savings. For instance, we provide credit monitoring and identity-theft resolution, accidental death and dismemberment insurance ("AD&D"), discount travel services, loyalty points programs, various checking account and credit card enhancement services as well as other products and services. We believe we are a market leader in each of our product areas and that our portfolio of the products and services which are embedded in our engagement solutions is the broadest in the industry. Our scale, combined with more than 35 years of experience, unique proprietary database, proven marketing techniques and strong marketing partner relationships, position us to perform well and grow in a variety of market conditions. As of December 31, 2010, we had approximately 69 million subscribers and end-customers enrolled in our membership, insurance and package programs worldwide and approximately 111 million customers who received credit or debit card enhancement services or loyalty points-based management services. We organize our business into two operating units: Affinion North America. Affinion North America comprises our Membership, Insurance and Package, and Loyalty customer engagement businesses in North America. Membership Products. We design, implement and market subscription programs that provide members with personal protection benefits and value-added services including credit monitoring and identity-theft resolution services as well as access to a variety of discounts and shop-at-home conveniences in such areas as retail merchandise, gift cards, travel, automotive and home improvement. Insurance and Package Products. We market AD&D and other insurance programs and design and provide checking account enhancement programs to financial institutions. Loyalty Products. We design, implement and administer points-based loyalty programs and, as of December 31, 2010, managed approximately 497 billion points with an estimated redemption value of approximately $4.9 billion for financial, travel, auto and other companies. We also provide enhancement benefits to major financial institutions in connection with their credit and debit card programs. In addition, we provide and manage travel reward products for loyalty programs.

Affinion International. Affinion International comprises our Membership, Package and Loyalty customer engagement businesses outside North America. We expect to leverage our current international operational platform to expand our range of products and services, develop new marketing partner relationships in various industries and grow our geographical footprint.

We offer all of our products and services through both retail and wholesale arrangements, although on a wholesale basis, currently we primarily provide services and benefits derived from our credit card registration, credit monitoring and identity-theft resolution products. In the majority of our retail arrangements, we incur marketing expenses to acquire new customers for our subscription-based membership, insurance and package enhancement products with the objective of building highly profitable and predictable recurring future revenue streams and cash flows. For our membership, insurance and package enhancement products, these marketing costs are expensed when the costs are incurred as the campaign is launched. Our membership programs are offered under a variety of terms and conditions. Members are usually offered incentives (e.g. free credit reports or other premiums) and one to three month risk-free trial periods to encourage them to use the benefits of membership before they are billed. We do not recognize any revenue during the trial period and expense the cost of all incentives and program benefits and servicing costs as incurred. Customers of our membership programs typically pay their membership fees either annually or monthly. Our membership products may have significant timing differences between the receipt of membership fees for annual members and revenue recognition. Historically, memberships were offered primarily under full money back terms whereby a member could receive a full refund upon cancellation at any time during the current membership term. These revenues were 37

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recognized upon completion of the membership term when they were no longer refundable. Depending on the length of the trial period, this revenue may not have been recognized for up to 16 months after the related marketing spend is incurred and expensed. Currently, annual memberships are primarily offered under pro-rata arrangements in which the member is entitled to a prorated refund for the unused portion of their membership term. This allows us to recognize revenue ratably over the annual membership term. In 2009 and 2010, approximately 79% and 96%, respectively, of our domestic new member and endcustomer enrollments were in monthly payment programs. Revenue is recognized monthly under both annual pro rata and monthly memberships, allowing for a better matching of revenues and related servicing and benefit costs when compared to annual full money back memberships. Memberships generally remain under the billing terms in which they were originated. We generally utilize the brand names and customer contacts of our marketing partners in our marketing campaigns. We usually compensate our marketing partners either through commissions based on revenues we receive from members (which we expense in proportion to the revenue we recognize) or up-front marketing payments, commonly referred to as "bounties" (which we expense when incurred). In addition, during 2009, as we saw subscriber paythrough rates in our North American Membership products line begin to drop below historical averages, we began to enter into arrangements with certain marketing partners which we believe offer better utilization of our marketing spend. Under these arrangements, we pay our marketing partners advance commissions which provide the potential for recovery from the marketing partners if certain targets are not achieved. These payments are capitalized and amortized over the expected life of the acquired members. The commission rates which we pay to our marketing partners differ depending on the arrangement we have with the particular marketing partner and the type of media we utilize for a given marketing campaign. For example, marketing campaigns utilizing direct mail and online channels generally have lower commission rates than other marketing channels which we use. As a result of recent changes in marketing partner arrangements and a higher percentage of our new customers being acquired through the direct mail and online media, our membership commission rates for the past five years have consistently decreased as a percentage of revenue. We serve as an agent and third-party administrator for the marketing of AD&D and our other insurance products. Free trial periods and incentives are generally not offered with our insurance programs. Insurance program participants typically pay their insurance premiums either monthly or quarterly. Insurance revenues are recognized ratably over the insurance period and there are no significant differences between cash flows and related revenue recognition. We earn revenue in the form of commissions collected on behalf of the insurance carriers and participate in profit-sharing relationships with the carriers that underwrite the insurance policies that we market. Our estimated share of profits from these arrangements is reflected as profit-sharing receivables from insurance carriers on the accompanying audited consolidated balance sheets and any changes in estimated profit sharing are periodically recorded as an adjustment to net revenue. Revenue from insurance programs is reported net of insurance costs in the accompanying audited consolidated statements of operations. In our wholesale arrangements, we provide products and services as well as customer service and fulfillment related to such products and services supporting our marketing partners' programs that they offer to their customers. Our marketing partners are typically responsible for customer acquisition, retention and collection and generally pay us one-time implementation fees and on-going monthly service fees based on the number of members enrolled in their programs. Implementation fees are recognized ratably over the contract period while monthly service fees are recognized in the month earned. Wholesale revenues also include revenues from transactional activities associated with our programs such as the sales of additional credit reports and discount shopping and travel purchases by members. The revenues from such transactional activities are recognized in the month earned. We have made significant progress in increasing the flexibility of our business model by transitioning our operations from a highly fixed-cost structure to a more variable-cost structure by combining similar functions and processes, consolidating facilities and outsourcing a significant portion of our call center and other back-office processing. This added flexibility better enables us to redeploy our marketing expenditures globally across our operations to maximize returns. Factors Affecting Results of Operations and Financial Condition Competitive Environment As a leader in the affinity direct marketing industry, we compete with many other organizations, including certain of our marketing partners, to obtain a share of the customers' business. As affinity direct marketers, we derive our leads from customer contacts, which our competitors seek access to, and we must generate sufficient earnings per lead for our marketing partners to compete effectively for access to their customer contacts. 38

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We compete with companies of varying size, financial strength and availability of resources. Our competitors include marketing solutions providers, financial institutions, insurance companies, consumer goods companies, internet companies and others, as well as direct marketers offering similar programs. Some of our competitors are larger than we are, with more resources, financial and otherwise. We expect this competitive environment to continue in the foreseeable future. Financial Industry Trends Historically, financial institutions have represented a significant majority of our marketing partner base. In the past few years, a number of our existing financial institution marketing partners have been acquired by, or merged with, other financial institutions. Several relatively recent examples include Bank of America Corporation and Countrywide Financial Corp., JPMorgan Chase & Co. and Washington Mutual, Inc. and Wells Fargo & Co. and Wachovia Corporation. As we generally have relationships with either the acquirer, the target or, as in most cases, both the acquirer and the target, this industry consolidation has not, to date, had a material long-term impact on either our marketing opportunities or our margins, but has created delays in new program launches while the merging institutions focus on consolidating their internal operations. In certain circumstances, our financial marketing partners have sought to source and market their own in-house programs, most notably programs that are analogous to our credit card registration, credit monitoring and identity-theft resolution services. As we have sought to maintain our market share and to continue these programs with our marketing partners, in some circumstances, we have shifted from a retail marketing arrangement to a wholesale arrangement which has lower net revenue, but unlike our retail arrangement, has no related commission expense. Partially as a result of this trend, we have experienced a revenue reduction in our membership business. Internationally, package products similar to ours are offered by some of the largest financial institutions in Europe. As these banks attempt to increase their own net revenues and margins by offering such programs in-house, we have been required to significantly reduce our prices when our agreements with these financial institutions come up for renewal in order to remain competitive. This pricing pressure on our international package offerings may continue in the future, thereby lowering the contribution to our operating results from such programs in the future. Regulatory Environment We are subject to federal and state regulation as well as regulation by foreign authorities in other jurisdictions. Certain laws and regulations that govern our operations include: federal, state and foreign marketing and consumer protection laws and regulations; federal, state and foreign privacy and data protection laws and regulations; and federal, state and foreign insurance and insurance mediation laws and regulations. Federal regulations are primarily enforced by the FTC and the FCC. State regulations are primarily enforced by individual state attorneys general. Foreign regulations are enforced by a number of regulatory bodies in the relevant jurisdictions. These regulations primarily impact the means we use to market our programs, which can reduce the acceptance rates of our solicitation efforts, and impact our ability to obtain information from our members and end-customers. In our insurance products, these regulations limit our ability to implement pricing changes. We incur significant costs to ensure compliance with these regulations; however, we are party to lawsuits, including class action lawsuits, and state attorney general investigations involving our business practices which also increase our costs of doing business. See "Item 3. Legal Proceedings." Seasonality Historically, seasonality has not had a significant impact on our business. Our revenues are more affected by the timing of marketing programs which can change from year to year depending on the opportunities available and pursued. Business History General. Our business started with our North American membership products in 1973. Over a decade later, we expanded our business to include North American insurance and package products. In 1988, we acquired a loyalty and enhancement programs business and in the early 1990s, we expanded our membership and package products internationally. 39

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During these periods, the various products operated independently and were subject to certain non-compete agreements between them which limited their access to new channels, marketing partners, products and markets. In 2004, we terminated the non-compete agreements described above and streamlined our organizational structure to integrate these historically separately managed products lines. Accordingly, our North American membership, insurance, package and loyalty products came under common management beginning in the first quarter of 2004 and the North American management team assumed responsibility for our international products in late 2004 and oversight of the travel agency in the first quarter of 2005. Integration and the 2005 Reorganization. In February 2004, we began integrating the North American membership, insurance and package product operations. The organizational structures supporting these product lines were realigned to combine departments and eliminate redundant functions. We reorganized the sales forces to be more aligned with the needs of our marketing partners and have a unified and comprehensive approach to the North American market. We also combined our marketing and procurement functions to take advantage of the larger scale of the combined businesses. In 2005, we developed reorganization plans for our international and North American travel agency operations based on our successful earlier integration efforts, including facility consolidation, outsourcing of our call centers and other back office functions, as well as eliminating redundant functions and centralizing oversight for common processes. The Transactions On October 17, 2005, Cendant Corporation ("Cendant") completed the sale of the Cendant Marketing Services Division (the "Predecessor") to Affinion Group, Inc. (the "Company" or "Affinion"), an affiliate of Apollo Global Management, LLC ("Apollo"), pursuant to a purchase agreement dated July 26, 2005 for approximately $1.8 billion. The purchase price consisted of approximately $1.7 billion of cash, net of estimated closing adjustments, plus $125 million face value of 125,000 shares of newly issued preferred stock (with a fair value at issuance of $80.4 million) of Affinion Group Holdings, Inc. ("Holdings"), our parent company, and a warrant (with a fair value at issuance of $16.7 million) that is exercisable for 4,437,170 shares of Holdings' common stock, subject to customary anti-dilution adjustments, and $38.1 million of transaction related costs (collectively, the "Transactions"). Initially, the warrant was exercisable on or after October 17, 2009 (or earlier, if Apollo achieved certain returns on its investment or if a dividend or distribution was paid on our common stock). As a result of a special dividend on its common stock distributed by Holdings in January 2007, the warrant became exercisable at an exercise price of $10.38 per share. The warrant will expire 30 days after notice is received by the warrantholders from us that Apollo and its affiliates have received certain specified investment returns. On February 11, 2011, the warrants were amended such that they will now expire on the earlier of April 30, 2011 or the date that is 30 days after the date on which Holdings' board of directors determines the fair value of its common stock. The preferred stock entitles its holder to receive dividends of 8.5% per annum (payable, at Holdings' option, either in cash or in kind) and ranks senior to shares of all other classes or series of stock with respect to rights upon a liquidation or sale of Holdings at a price of the then-current face amount, plus any accrued and unpaid dividends. The preferred stock is redeemable at Holdings' option at any time, subject to the applicable terms of our debt instruments and applicable laws. In conjunction with a special dividend on its common stock distributed by Holdings in January 2007, Holdings also redeemed 95,107 shares of its preferred stock at its initial face amount plus accrued and unpaid dividends. Immediately following the redemption, 29,893 shares of preferred stock with a face amount of $33.3 million, representing an initial face amount of $29.9 million plus accrued and unpaid dividends of $3.4 million, were outstanding. In conjunction with special dividends on its common stock distributed by Holdings in January and February 2011, Holdings redeemed approximately 28,554 shares of preferred stock at its initial face amount plus accrued and unpaid dividends for an aggregate redemption value of $44.5 million. Holdings expects to redeem the remaining 1,339 shares of preferred stock in March 2011. As part of the Transactions, we made a special tax election referred to as a "338(h)(10) election" with respect to the Predecessor. Under the 338(h)(10) election, the companies constituting the Predecessor were deemed to have sold and repurchased their assets at fair market value. By adjusting the tax basis in such assets to fair market value for U.S. federal income tax purposes, the aggregate amount of our tax deductions for depreciation and amortization have increased, which has reduced our cash taxes and further enhanced our free cash flow generation. We expect these tax deductions for U.S. federal income tax purposes to continue until 2020. 40

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Webloyalty Transaction On January 14, 2011, the Company and Holdings entered into, and consummated, an Agreement and Plan of Merger that resulted in the acquisition of Webloyalty Holdings, Inc. ("Webloyalty"). Webloyalty is a leading online marketing services company. Webloyalty provides, designs, and administers online subscription loyalty solutions that offer valuable discounts, services and benefits for its subscribers and provides its clients with programs that enhance their relationship with their customers. In addition to its domestic services, Webloyalty operates in several countries in Europe. The Webloyalty acquisition is consistent with our long-standing business strategy in several respects: the acquisition enhances our operations in attractive international markets, including France and the U.K.; it provides us with a technology platform that expands the range of its marketing media, particularly in online channels; and it provides additional economies of scale in the management of our combined product portfolio. Results of Operations Supplemental Data The following table provides data for selected business segments (member and insured amounts in thousands except per average member amounts and percentages):
Three Months Ended December 31, 2010 2009

Years Ended December 31, 2010 2009 2008

Global Membership Products: Retail Average Members(1)(2) Annualized Net Revenue Per Average Member (3) Average Retail Members including wholesale formerly retail and other (2)(4) Affinion North America: Membership Products Retail Average Members (1) % Monthly Members % Annual Members Annualized Net Revenue Per Average Member (3) Wholesale Average Members (1) Portion for service formerly retail and other (4) Average Retail Members including wholesale formerly retail and other (4) Insurance and Package Products Insurance Average Basic Insured (1) Average Supplemental Insured Annualized Net Revenue per Supplemental Insured (3) Package Average Members (1) Annualized Net Revenue Per Average Member (3) Affinion International: International Products Package Average Members (1) Annualized Net Revenue Per Average Package Member (3) Other Retail Membership Average Members (1) Annualized Net Revenue Per Average Member (3) New Retail Membership Average Members (1) Annualized Net Revenue Per Average Member (3) Fee for service formerly retail (4) 41

6,601 $ 95.21 8,800

7,542 $ 87.87 9,471

6,957 $ 91.57 8,994

7,836 $ 82.26 9,801

8,304 $ 79.46 10,503

6,196 6,961 6,499 7,239 7,833 65.8% 56.4% 62.8% 51.9% 44.5% 34.2% 43.6% 37.2% 48.1% 55.5% $ 94.80 $ 86.93 $ 91.18 $ 81.49 $ 78.41 8,844 2,048 8,244 5,781 1,887 8,848 6,602 1,916 8,415 5,638 1,954 9,193 2,953 2,199 10,032

22,479 4,346 $ 58.66 8,026 7.70

23,528 4,495 $ 54.30 7,076 9.49

22,645 4,403 $ 60.21 7,928 8.03

23,461 4,547 $ 55.44 6,394 $ 10.92

23,338 4,797 $ 57.71 5,555 $ 13.68

16,514 7.81

16,643 8.17

16,521 7.29

16,318 7.59

16,226 8.75

1,231 $ 41.90 405 $ 101.49 151

1,322 $ 42.68 581 $ 99.14 42

1,267 $ 38.97 458 $ 97.14 121

1,443 $ 36.34 597 $ 91.62 11

1,728 $ 36.98 471 $ 96.87

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Three Months Ended December 31, 2010 2009 2010

Years Ended December 31, 2009 2008

New retail including formerly retail (4) (1)

556

623

579

608

471

Average Members and Average Basic Insured for the period are each calculated by determining the average members or insureds, as applicable, for each month (adding the number of members or insureds, as applicable, at the beginning of the month with the number of members or insureds, as applicable, at the end of the month and dividing that total by two) for each of the months in the period and then averaging that result for the period (i.e. quarter or year-to-date). A member's or insured's, as applicable, account is added or removed in the period in which the member or insured, as applicable, has joined or cancelled. Includes International Products New Retail Average Members. Annualized Net Revenue Per Average Member and Annualized Net Revenue Per Supplemental Insured are each calculated by taking the revenues as reported for the period (i.e. quarter or year-to-date) and dividing it by the average members or insureds, as applicable, for the period. Quarterly periods are then multiplied by four to annualize this amount for comparative purposes. Upon cancellation of a member or an insured, as applicable, the member's or insured's, as applicable, revenues are no longer recognized in the calculation. Certain programs historically offered as retail arrangements are currently offered as wholesale arrangements where the Company receives lower annualized price points and pays no related commission expense. Additionally, more recently, the Company has entered into other relationships with new and existing affinity partners, including arrangements where the affinity partner offers the Company's membership programs at certain point of sale retail locations to their customers.

(2) (3)

(4)

We manage our business using a portfolio approach, meaning that we allocate and reallocate our marketing investments in the ongoing pursuit of the highest and best available returns, allocating our resources to whichever products, geographies and programs offer the best opportunities. With the globalization of our clients, the continued evolution of our programs and services and the ongoing refinement and execution of our marketing allocation strategy, we have concluded that the legacy presentation of our business metrics no longer adequately presents the necessary insight into our businesses. As a result, we have developed the following table that we believe more closely captures the way we look at the businesses when we allocate capital.
Three Months Ended December 31, 2010 2009 Years Ended December 31, 2010 2009

Global Average Subscribers, excluding Basic Insureds Annualized Revenue per Global Average Subscriber, excluding Basic Insureds (1) Global Membership Subscribers (2) Average Global Retail Subscribers (3) Annualized Net Revenue Per Average Subscriber (1) Global Package Subscribers and Wholesale (4) Average Global Package Subscribers and Wholesale (3) Annualized Revenue per Average Global Package Subscriber (1) Global Insureds (3) Average Supplemental Insureds Annualized Net Revenue Per Supplemental Insured (1) Global Average Subscribers, including Basic Insureds (1)

45,713 $ 27.08 10,032 75.61 31,335 7.17 4,346 58.66 68,192

42,901 $ 29.65 10,793 73.50 27,613 8.50 4,495 54.30 66,429

43,800 $ 28.42 10,261 74.08 29,136 7.54 4,403 60.21 66,444

42,186 29.69 11,244 68.69 26,395 8.63 4,547 55.44 65,647

Annualized Net Revenue Per Average Subscriber and Annualized Net Revenue Per Supplemental Insured are each calculated by taking the revenues as reported for the period and dividing it by the average subscribers or insureds, as applicable, for the period. Quarterly periods are then multiplied by four to annualize this amount for comparative purposes. Upon cancellation of a subscriber or an insured, as applicable, the subscriber's or insured's, as applicable, revenues are no longer recognized in the calculation. Global Membership Subscribers is comprised of the former "Global Membership Products: Average Retail Members including wholesale formerly retail and other" as well as "Affinion International: Other Retail Membership" (See the table in the preceding paragraph for reference; note that numbers may not add due to rounding). Average Subscribers and Average Insureds for the period are each calculated by determining the average subscribers or insureds, as applicable, for each month (adding the number of subscribers or insureds, as applicable, at the beginning of the month with the number of subscribers or insureds, as applicable, at the end of the month and dividing that total by two) for each of the months in the period and then averaging that result for the period. A subscriber's or insured's, as applicable, account is added or removed in the period in which the subscriber or insured, as applicable, has joined or cancelled. 42

(2)

(3)

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(4)

Global Package Subscribers and Wholesale is comprised of the former "Affinion North America: Package", "Affinion North America: Membership Products Wholesale (excluding the portion for service formerly retail and other)" and "Affinion International: Package" (See the table in the preceding paragraph for reference; note that numbers may not add due to rounding).

In late 2002, our membership operations changed its strategic focus to overall profitability and generating higher revenue from each member rather than the size of our member base. This has resulted in lower average members partially offset by higher average revenues per member at lower commission rates and lower variable cost and higher contribution per member. Following a competitive analysis of the marketplace, we recognized that our products were priced below similar products. Additionally, we recognized that there were opportunities to further optimize marketing campaigns that had the effect of acquiring less members but nonetheless such members were more profitable in the aggregate. Accordingly, by increasing the prices for our programs and engaging in marketing campaigns that are designed to achieve a greater return on marketing investment, we may be able to increase our revenues even though the aggregate number of members in our base declines. Wholesale members include members where we typically receive a monthly service fee to support programs offered by our marketing partners. Certain programs historically offered as retail arrangements have switched to wholesale arrangements with lower annualized price points and no commission expense. Basic insureds typically receive $1,000 of AD&D coverage at no cost to the consumer since the marketing partner pays the cost of this coverage. Supplemental insureds are customers who have elected to pay premiums for higher levels of coverage. In 2008, we were successful in increasing the average revenue per supplemental insured due in part to our marketing efforts to increase coverage levels from our existing base of insureds and by offering higher coverage levels to new insureds which has more than offset the decline in the total number of supplemental insureds. Our customer base continues to migrate to higher insurance coverage limits. Domestic package member counts have stabilized and begun to return to growth in 2009, with the majority of the growth due to a new wholesale relationship we began in early 2009. Segment EBITDA Segment EBITDA consists of income from operations before depreciation and amortization. Segment EBITDA is the measure management uses to evaluate segment performance and we present Segment EBITDA to enhance your understanding of our operating performance. We use Segment EBITDA as one criterion for evaluating our performance relative to that of our peers. We believe that Segment EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. However, Segment EBITDA is not a measurement of financial performance under U.S. GAAP (as defined in Note 2 to our audited consolidated financial statements included elsewhere herein), and Segment EBITDA may not be comparable to similarly titled measures of other companies. You should not consider Segment EBITDA as an alternative to operating or net income determined in accordance with U.S. GAAP, as an indicator of operating performance or as an alternative to cash flows from operating activities determined in accordance with U.S. GAAP, or as an indicator of cash flows, or as a measure of liquidity. Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 The following table summarizes our historical consolidated results of operations for the years ended December 31, 2010 and 2009:
Year Ended December 31, 2010 Year Ended December 31, 2009 (in millions)

Increase (Decrease)

Net revenues Expenses: Cost of revenues, excluding depreciation and amortization shown separately below: Marketing and commissions Operating costs General and administrative Facility exit costs Depreciation and amortization Total expenses 43

1,376.3

1,376.9

(0.6)

583.3 375.8 157.6 8.0 195.2 1,319.9

618.2 356.4 105.1 201.0 1,280.7

(34.9) 19.4 52.5 8.0 (5.8) 39.2

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Year Ended December 31, 2010 Year Ended December 31, 2009 (in millions)

Increase (Decrease)

Income from operations Interest income Interest expense Loss on extinguishment of debt Other income (expense), net Loss before income taxes and non-controlling interest Income tax expense Net loss Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. Summary of Operating Results for the Year Ended December 31, 2010

56.4 11.6 (158.0) (37.0) (1.8) (128.8) (12.8) (141.6) (1.0) (142.6) $

96.2 8.1 (129.7) (12.0) (37.4) (11.7) (49.1) (0.9) (50.0) $

(39.8) 3.5 (28.3) (37.0) 10.2 (91.4) (1.1) (92.5) (0.1) (92.6)

The following is a summary of changes affecting our operating results for the year ended December 31, 2010 as compared to the year ended December 31, 2009: Net revenues decreased $0.6 million, for the year ended December 31, 2010 as compared to the prior year. Net revenues in our North American units increased $11.0 million as higher net revenues from Insurance and Package products, primarily the result of lower cost of insurance from lower claims experience, along with higher revenues in our Loyalty business, primarily due to the Connexions acquisition, more than offset lower net revenues in our Membership business. Net revenues decreased by $11.6 million in our International segment primarily from lower package revenue, principally due to contract renegotiations with existing clients and the impact of the stronger U.S. dollar. Segment EBITDA decreased $45.6 million, as higher operating costs and increased general and administrative expenses more than offset lower marketing and commissions. The higher general and administrative costs were primarily the result of costs associated with certain legal matters and acquisition costs and higher employee compensation costs. In addition, we recorded a charge for facility exit costs associated with our former corporate headquarters in the amount of $8.0 million. Historical 2010 Results Compared to 2009 Results The following section provides an overview of our consolidated results of operations for the year ended December 31, 2010 compared to our consolidated results of operations for the year ended December 31, 2009. Calculated percentages are based on amounts as reported which, for the years ended December 31, 2010 and 2009, reflect the impact of purchase accounting relating to the Transactions and subsequent acquisitions. Net Revenues. During the year ended December 31, 2010, we reported net revenues of $1,376.3 million, a decrease of $0.6 million, as compared to net revenues of $1,376.9 million for the year ended December 31, 2009. Loyalty products net revenues increased $25.2 million primarily from the July 1, 2010 acquisition of the Connexions business and new client programs. Net revenues from our Insurance and Package products increased $6.4 million primarily due to lower cost of insurance as a result of lower claims experience. Package revenues decreased as increased net revenues from higher Package members were more than offset by lower annualized revenue per average Package member. International products net revenues decreased $11.6 million as net revenue from a business acquired in the fourth quarter of 2009 were more than offset by the impact of the stronger U.S. dollar, lower package revenue primarily the result of contract renewal renegotiations with existing clients, and a change in deal structure with a key client. Net revenues of Membership products decreased $20.9 million primarily due to the absence of revenue recognized in 2009 related to a contract termination settlement and a marketing partner's penalty payment for failing to meet contractually obligated volume commitments. The negative effect of lower retail member volumes, however, was partially offset by higher net revenue from higher average revenue per retail member. Marketing and Commissions Expense. Marketing and commissions expense decreased by $34.9 million, or 5.6%, to $583.3 million for the year ended December 31, 2010 from $618.2 million for the year ended December 31, 2009. Marketing and commissions expense decreased primarily from delayed launches of certain marketing campaigns in our Membership business which were partially offset by increased marketing spend in our Insurance and Package business as we continue to redeploy dollars across our businesses to achieve the maximum return. Commission expense was up slightly on a global basis 44

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in 2010 as compared to 2009 as an increase in Membership commission expense was substantially offset by a decrease in International commission expense primarily from changes in deal structures in both businesses. Operating Costs. Operating costs increased by $19.4 million, or 5.4%, to $375.8 million for the year ended December 31, 2010 from $356.4 million for the year ended December 31, 2009. Operating costs were higher primarily due to higher costs in our Loyalty business, principally the result of the Connexions acquisition and new client launches and higher fulfillment costs in our Membership business for our PrivacyGuard product. General and Administrative Expense. General and administrative expense increased by $52.5 million, or 50.0%, to $157.6 million for the year ended December 31, 2010 from $105.1 million for the year ended December 31, 2009, principally due to higher costs associated with certain legal matters, higher compensation expense related to a retention award program, higher employee plan incentive costs, increased costs from prior acquisitions, higher professional fees and the Connexions acquisition. Facility Exit Costs. We recorded facility exit costs in the amount of $8.0 million for the year ended December 31, 2010. These costs relate to expenses associated with the lease on our former corporate headquarters which expires in April 2014. These costs represent the present value of future lease payments and other expenses related to the facility through the expiration of the lease, net of estimated sublease income. Depreciation and Amortization Expense. Depreciation and amortization expense decreased by $5.8 million for the year ended December 31, 2010 to $195.2 million from $201.0 million for the year ended December 31, 2009, primarily from recording $24.5 million more amortization expense in 2009 as compared to 2010 on the fair value of intangible assets resulting from the Transactions as the majority of the intangibles are amortized on an accelerated basis. This amortization expense is based upon an allocation of values to intangible assets and is being amortized over lives ranging from 3 years to 15 years. This decrease was partially offset by $18.7 million more depreciation and amortization primarily amortization associated with businesses and assets acquired in 2009 and 2010, principally acquired member and affinity relationship intangible assets. Interest Income. Interest income increased $3.5 million for the year ended December 31, 2010 to $11.6 million from accretion on held-to-maturity debt securities issued by Holdings that were purchased by the Company during 2009. Interest Expense. Interest expense increased by $28.3 million, or 21.8%, to $158.0 million for the year ended December 31, 2010 from $129.7 million for the year ended December 31, 2009, primarily due to higher interest expense on our term loan of approximately $17.7 million primarily due to increased 1 borrowings, a less favorable impact of interest rate swaps in 2010 as compared to 2009 of $3.8 million and higher interest accrued on the 10 /8% senior notes 1 issued in June 2009 of $5.1 million. Our 10 /8% senior notes were refinanced with $475 million 7.875% senior notes on November 19, 2010. Loss on Extinguishment of Debt. We recorded a loss on extinguishment of debt of $37.0 million in 2010 related to the refinancing of our 10 /8% senior notes in November of 2010 and our term loan in April 2010. Of the total loss on extinguishment of debt, $23.3 million represents the unamortized amount of deferred financing costs and discounts associated with the original debt issuance. These costs and discounts were being amortized over the life of the loans. In 1 addition, $13.4 million represents early tender and consent payments for the 10 /8% senior notes refinancing. Other Income (Expense), net. During the year ended December 31, 2010, we recorded unrealized foreign exchange losses of $1.8 million related to intercompany borrowings as compared to $12.0 million of unrealized foreign exchange losses during the year ended December 31, 2009. Income Tax Expense. Income tax expense increased by $1.1 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009, primarily due to decreases in the current state and foreign tax liabilities and deferred state taxes offset by an increase in deferred federal and foreign tax liabilities. The Company's effective income tax rates for the year ended December 31, 2010 and 2009 were (9.9)% and (31.2)%, respectively. The difference in the effective tax rates for the year ended December 31, 2010 and 2009 is primarily a result of the increase in loss before income taxes and non-controlling interest from $37.4 million for the year ended December 31, 2009 to $128.8 million for the year ended December 31, 2010 and an increase in income tax expense from $11.7 million for the year ended December 31, 2009 to $12.8 million for the year ended December 31, 2010. The Company's tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income it earns in those jurisdictions. It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In addition to state and foreign income taxes and related foreign tax credits, the requirement to maintain valuation 45
1

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allowances had the most significant impact on the difference between the Company's effective tax rate and the statutory U.S. federal income tax rate of 35%. Operating Segment Results The following section provides an overview of our consolidated results of operations for the year ended December 31, 2010 compared to our consolidated results of operations for the year ended December 31, 2009. Net revenues and Segment EBITDA by operating segment are as follows:
Years Ended December 31, Net Revenues 2010 2009 Increase (Decrease) (in millions) 2010 Segment EBITDA (1) 2009 Increase (Decrease)

Affinion North America Membership products Insurance and package products Loyalty products Eliminations Total North America Affinion International International products Total products Corporate Total Depreciation and amortization Income from operations (1)

689.9 $ 345.6 102.5 (3.4) 1,134.6 241.7 1,376.3 1,376.3

710.8 $ 339.2 77.3 (3.7) 1,123.6 253.3 1,376.9 1,376.9

(20.9) $ 6.4 25.2 0.3 11.0 (11.6) (0.6) (0.6) $

109.6 94.1 32.0 235.7 29.8 265.5 (13.9) 251.6

149.2 98.1 28.0 275.3 30.2 305.5 (8.3) 297.2

(39.6) (4.0) 4.0 (39.6) (0.4) (40.0) (5.6) (45.6) 5.8 (39.8)

(195.2) 56.4 $

(201.0) 96.2 $

See " Covenant Compliance Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures" below and Note 16 to our audited consolidated financial statements included elsewhere herein for a discussion on Segment EBITDA.

Affinion North America Membership Products. Membership products net revenues decreased by $20.9 million, or 2.9%, to $689.9 million for the year ended December 31, 2010 as compared to $710.8 million for the year ended December 31, 2009. Net revenues decreased primarily due to the absence of revenue recognized in 2009 related to a contract termination settlement and a marketing partner's penalty payment for failing to meet contractually obligated volume commitments. The negative effect of lower retail member volumes, however, was partially offset by higher net revenue from higher average revenue per retail member. Segment EBITDA decreased by $39.6 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 as lower marketing and commissions of $30.7 million only partially offset the effect of lower net revenues, facility exit costs of $8.0 million related to the lease on our former corporate headquarters, higher general and administrative costs of $38.6 million and higher product and servicing costs of $2.8 million. Marketing and commissions expense was lower primarily due to the delayed launches of certain marketing campaigns and were partially offset by higher commissions due to changes in deal structures. The higher general and administrative costs were primarily due to costs associated with certain legal matters, higher employee incentive plan costs and higher professional fees. The higher product and servicing costs were from higher fulfillment costs for our PrivacyGuard product. Insurance and Package Products. Insurance and package products reported net revenues of $345.6 million for the year ended December 31, 2010, an increase of $6.4 million, or 1.9%, as compared to the year ended December 31, 2009. Insurance revenue increased approximately $12.2 million, principally due to lower cost of insurance as a result of lower claims experience. Package revenue decreased approximately $5.8 million as increased net revenues from higher package members were more than offset by lower average annualized revenue per average Package member. Segment EBITDA decreased by $4.0 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009, primarily due to higher marketing and commissions expense and higher general and administrative costs from higher employee incentive plan costs, which more than offset the impact of the higher net revenues. 46

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Loyalty Products. Revenues from Loyalty products increased by $25.2 million, or 32.6%, for the year ended December 31, 2010 to $102.5 million as compared to $77.3 million for the year ended December 31, 2009. Net revenues increased primarily as a result of the Connexions acquisition on July 1, 2010, which increased net revenue by $21.5 million, and from new client programs which partially offset decreases from program losses and renegotiations. Segment EBITDA increased by $4.0 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009, as the impact of the Connexions acquisition and the higher net revenues were partially offset by higher product and servicing costs associated with new clients. Affinion International International Products. International products net revenues decreased by $11.6 million, or 4.6%, to $241.7 million for the year ended December 31, 2010 as compared to $253.3 million for the year ended December 31, 2009. Net revenues decreased $4.4 million as a result of the stronger U.S. dollar. Net revenues in our Package business decreased approximately $3.2 million as revenues generated from a business acquired in the fourth quarter of 2009 were more than offset by a decline in revenue as a result of contract renewal renegotiations with existing clients. Revenues from our new retail business declined $4.3 million as higher net revenues from higher price points were more than offset by a change in deal structure with a key client which moved new joins from a retail arrangement to a wholesale arrangement. Segment EBITDA decreased by $0.4 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 as the lower net revenues and higher general and administrative costs from acquisition related expenses were substantially offset by lower commissions. Corporate Corporate costs increased by $5.6 million to $13.9 million for the year ended December 31, 2010 primarily from higher compensation expense relating to a retention award program in the form of restricted stock units recorded in 2010 and higher unrealized foreign exchange losses on intercompany balances in 2010 as compared to 2009. Year Ended December 31, 2009 Compared to Year Ended December 31, 2008 The following table summarizes our historical consolidated results of operations for the years ended December 31, 2009 and 2008:
Year Ended December 31, 2009 Year Ended December 31, 2008 (in millions)

Increase (Decrease)

Net revenues Expenses: Cost of revenues, excluding depreciation and amortization shown separately below: Marketing and commissions Operating costs General and administrative Depreciation and amortization Total expenses Income from operations Interest income Interest expense Other income (expense), net Loss before income taxes and non-controlling interest Income tax expense Net loss Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. 47

1,376.9 $

1,409.9 $

(33.0)

618.2 356.4 105.1 201.0 1,280.7 96.2 8.1 (129.7) (12.0) (37.4) (11.7) (49.1) (0.9) (50.0) $

646.9 360.0 98.4 260.2 1,365.5 44.4 1.7 (142.9) 16.3 (80.5) (7.5) (88.0) (0.7) (88.7) $

(28.7) (3.6) 6.7 (59.2) (84.8) 51.8 6.4 13.2 (28.3) 43.1 (4.2) 38.9 (0.2) 38.7

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Summary of Operating Results for the Year Ended December 31, 2009 The following is a summary of changes affecting our operating results for the year ended December 31, 2009 as compared to the year ended December 31, 2008: Net revenues for the year ended December 31, 2009 were $1,376.9 million compared to $1,409.9 million for the year ended December 31, 2008, reflecting a decline of $33.0 million, or 2.3%. The decrease in net revenues was primarily due to a decline in North America, principally in our Insurance and Package business from a higher cost of insurance as a result of higher claims experience. In our International business, the impact of the stronger U.S. dollar more than offset higher revenue from new retail business and new businesses acquired in the fourth quarter of 2008. The reduction in net revenue of $32.1 million attributable to the stronger U.S. dollar was calculated by holding the foreign currency rates constant from the comparable 2008 periods. Segment EBITDA decreased $7.4 million, as lower global marketing and commissions expense and lower operating costs were more than offset by the impact of the lower net revenues and higher general and administrative expenses. Purchase accounting adjustments made in connection with the purchase of the Cendant Marketing Services Division by the Company and its parent, Holdings for approximately $1.8 billion in October 2005 had a less significant impact on our results of operations for the year ended December 31, 2009 as compared to the year ended December 31, 2008. These entries, which are non-cash in nature, increased net revenues by $16.7 million and income from operations by $63.8 million for 2009 as compared to 2008. The effect of purchase accounting adjustments, which are primarily related to deferred revenue and the related prepaid commissions and service liability, for the year ended December 31, 2009 as compared to the year ended December 31, 2008, increased net revenues by $16.7 million, marketing and commissions expense by $7.4 million and operating costs by $1.3 million. In addition, as a result of purchase accounting, we recorded $55.8 million less depreciation and amortization expense for the year ended December 31, 2009, which positively affected results of operations. Historical 2009 Results Compared to 2008 Results The following section provides an overview of our consolidated results of operations for the year ended December 31, 2009 compared to our consolidated results of operations for the year ended December 31, 2008. Calculated percentages are based on amounts as reported which, for the years ended December 31, 2009 and 2008, reflect the impact of purchase accounting. Net Revenues. During the year ended December 31, 2009, we reported net revenues of $1,376.9 million, a decrease of $33.0 million, or 2.3%, as compared to net revenues of $1,409.9 million in the comparable 2008 period. Net revenues excluding the impact of purchase accounting decreased by $49.7 million, or 3.5%. Insurance and Package products net revenues decreased by $36.0 million, Membership products net revenues decreased by $16.2 million and International products net revenues decreased by $2.9 million, while Loyalty products net revenues increased by $4.9 million. Insurance and Package products decreased primarily due to higher cost of insurance as a result of higher claims experience along with lower Package revenues, primarily from lower annualized revenue per average Package member, partially offset by increased revenues from higher numbers of Package members. Net revenues of our Membership products decreased due to lower retail member volumes, partially offset by other revenues related to a contract termination settlement and contractually obligated volume commitments along with higher net revenue from higher average revenue per retail member. International products net revenues decreased primarily due to the impact of the stronger U.S. dollar along with lower Package revenues as a result of contract renewal renegotiations with existing clients, and lower revenue from other retail products and other businesses, primarily from lower members. These decreases were partially offset by increased revenues from businesses acquired in the fourth quarter of 2008 and growth in new retail products. Loyalty products net revenues increased primarily from higher fee-based revenue related to a points redemption program acquired on June 30, 2008 and a new program launch in the third quarter of 2009, partially offset by lower revenues from contract renewal renegotiations with existing clients. Partially offsetting the $49.7 million decrease was an increase of approximately $16.7 million, or 1.2%, primarily due to an adjustment to deferred revenue related to the Transactions in 2005. Deferred revenue was originally written down as part of purchase accounting. The majority of the negative impact of this adjustment was recognized in 2005 through 2007 and was concluded in 2008. Marketing and Commissions Expense. Marketing and commissions expense decreased by $28.7 million, or 4.4%, to $618.2 million for the year ended December 31, 2009, from $646.9 million for the year ended December 31, 2008. Excluding the $7.4 million increase from purchase accounting, marketing and commissions expense was $36.1 million lower, or 5.6%, primarily due to changes in deal structure in our Membership business where, in 2009, we began to enter into relationships with certain marketing partners where up-front payments are made to these partners which provide us with the potential for recovery if certain subscriber retention targets are not achieved. These advance payments are capitalized and amortized over 48

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the expected life of the acquired members. Membership commissions were lower than the previous years, primarily due to the continuing shift to lower commission media. In our International business, costs were reduced as a result of the stronger U.S. dollar and in our Insurance and Package business, marketing expenditures were reduced for our NetGain product. Operating Costs. Operating costs decreased by $3.6 million, or 1.0%, to $356.4 million for the year ended December 31, 2009 from $360.0 million for the year ended December 31, 2008. Excluding the $1.3 million increase as a result of purchase accounting, operating costs were $4.9 million, or 1.4%, lower than in 2008, primarily due to the effect of the stronger U.S. dollar, partially offset by higher overall product, servicing and employee-related costs. Costs increased in our International business primarily from businesses acquired in the fourth quarter of 2008 and in our Loyalty business from new program launches, while costs decreased in our Membership business primarily due to the lower net revenues. General and Administrative Expense. General and administrative expense increased by $6.7 million, or 6.8%, to $105.1 million for the year ended December 31, 2009 from $98.4 million for the year ended December 31, 2008, principally due to higher employee-related costs in our International business, the majority of which relates to businesses acquired in the fourth quarter of 2008, partially offset by lower costs due to effect of the stronger U.S. dollar. Our Membership business incurred higher legal costs, primarily related to a U.S. Senate Committee on Commerce, Science and Technology investigation initiated in the third quarter of 2009, and was substantially offset by lower compensation expense from lower incentive plan expense in North America for the year ended December 31, 2009 as compared to the year ended December 31, 2008. Depreciation and Amortization Expense. Depreciation and amortization expense decreased by $59.2 million for the year ended December 31, 2009 to $201.0 million from $260.2 million for the year ended December 31, 2008, primarily due to recording higher amortization expense in 2008 on the fair value of intangible assets resulting from the Transactions as the majority of the intangibles are amortized on an accelerated basis. This amortization expense is based upon an allocation of values to intangible assets and is being amortized over lives ranging from 3 years to 15 years. Depreciation and amortization expense further decreased due to lower amortization of previously acquired contract rights due to their accelerated amortization. Interest Income. Interest income increased by $6.4 million for the year ended December 31, 2009 to $8.1 million as compared to $1.7 million for the year ended December 31, 2008, primarily due to the accretion on held-to-maturity debt securities issued by Holdings that were purchased by the Company in 2009. Interest Expense. Interest expense decreased by $13.2 million, or 9.2%, to $129.7 million for the year ended December 31, 2009 from $142.9 million for the year ended December 31, 2008, primarily due to a more favorable impact of interest rate swaps in 2009 as compared to 2008 of approximately $16.8 million along with $5.1 million of lower net interest accrued on our term loan and revolving credit facility as a result of lower interest rates and lower 1 utilization. These decreases were partially offset by an increase in additional interest accrued on the 10 /8% senior notes issued in June 2009 of $8.7 million. Other Income (Expense), net. In 2009, the Company recorded unrealized foreign exchange losses of $13.6 million related to intercompany borrowings as compared to unrealized foreign exchange gains of $16.3 million recorded in 2008. Income Tax Expense. Income tax expense increased by $4.2 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008, primarily due to an increase in the current state tax liabilities partially offset by a decrease in deferred state tax liabilities and increases in the current and deferred foreign tax liabilities. The effective tax rate for fiscal years 2009 and 2008 was (31.2%) and (9.3%), respectively. The difference in the effective tax rates for 2008 and 2009 is primarily as a result of the reduction in loss before income taxes and non-controlling interest from $80.5 million for the year ended December 31, 2008 to $37.4 million for the year ended December 31, 2009. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In addition to state and foreign income taxes and related foreign tax credits, the requirement to maintain valuation allowances had the most significant impact on the difference between our statutory U.S. federal income tax rate of 35%. Operating Segment Results The following section provides an overview of our consolidated results of operations for the year ended December 31, 2009 compared to our consolidated results of operations for the year ended December 31, 2008. Net revenues and Segment EBITDA by operating segment are as follows: 49

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Years Ended December 31, Net Revenues 2009 2008 Increase (Decrease) (in millions) 2009 Segment EBITDA (1) 2008 Increase (Decrease)

Affinion North America Membership products Insurance and package products Loyalty products Eliminations Total North America Affinion International International products Total products Corporate Total Depreciation and amortization Income from operations (1)

710.8 $ 339.2 77.3 (3.7) 1,123.6 253.3 1,376.9 1,376.9

712.6 $ 375.1 72.2 (4.2) 1,155.7 254.2 1,409.9 1,409.9

(1.8) $ (35.9) 5.1 0.5 (32.1) (0.9) (33.0) (33.0) $

149.2 98.1 28.0 275.3 30.2 305.5 (8.3) 297.2

129.8 127.9 22.4 280.1 31.2 311.3 (6.7) 304.6

19.4 (29.8) 5.6 (4.8) (1.0) (5.8) (1.6) (7.4) 59.2 51.8

(201.0) 96.2 $

(260.2) 44.4 $

See " Covenant Compliance Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures" below and Note 16 to our audited consolidated financial statements included elsewhere herein for a discussion on Segment EBITDA.

Affinion North America Membership Products. Membership products net revenues decreased by $1.8 million, or 0.3%, to $710.8 million for the year ended December 31, 2009 as compared to $712.6 million for the year ended December 31, 2008. Excluding the $14.4 million benefit of purchase accounting, net revenues decreased by $16.2 million, or 2.3%, as higher other revenues related to a contract termination settlement of $11.9 million and contractually obligated volume commitments along with higher net revenue from higher average revenue per retail member was more than offset by the impact of lower retail member volumes. Segment EBITDA increased by $19.4 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008. Excluding the $7.4 million benefit of purchase accounting, Segment EBITDA increased $12.0 million, as lower marketing and commissions expense of $25.8 million and lower operating costs of $3.4 million more than offset the effect of lower net revenues of $16.2 million and higher general and administrative costs of $1.0 million. The lower marketing and commissions were primarily due to changes in deal structure for programs with certain marketing partners and lower commissions from the continuing shift in marketing to lower commission media, while the lower operating costs were primarily due to the lower product, servicing and employee-related costs associated with the lower net revenues. General and administrative expenses included higher legal costs principally due to a U.S. Senate Committee on Commerce, Science and Technology investigation initiated in the third quarter of 2009, which were substantially offset by lower compensation expense from lower incentive plan expense in 2009. Insurance and Package Products. Insurance and package products reported net revenues of $339.2 million for the year ended December 31, 2009, a decrease of $35.9 million, or 9.6%, as compared to the year ended December 31 2008. Insurance revenue decreased approximately $25.1 million, principally due to higher cost of insurance as a result of higher claims experience. Package revenue decreased approximately $11.0 million, primarily from lower annualized revenue per average Package member and lower fee-based net revenues from our NetGain product, partially offset by increased revenue from higher numbers of Package members. Segment EBITDA decreased by $29.8 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008, primarily due to the lower net revenues, partially offset by lower marketing and commissions expense, primarily due to lower marketing for NetGain and lower general and administrative costs primarily due to lower compensation expense from lower incentive plan expense in 2009. Loyalty Products. Revenues from Loyalty products increased by $5.1 million, or 7.1%, for the year ended December 31, 2009 to $77.3 million as compared to $72.2 million for the year ended December 31, 2008. Net revenues increased $11.1 million from higher fee-based revenue related to a points redemption program acquired at the end of the second quarter of 2008 and a new program launch in the third quarter, partially offset by a decrease of $6.2 million primarily from contract renewal renegotiations with existing clients. 50

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Segment EBITDA increased by $5.6 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008, primarily due to higher fee-based revenue and the new program launch. The impact of the lower revenue from contract renewal renegotiations was offset by lower servicing costs. Lower compensation expense from lower incentive plan expense in 2009 further benefited Segment EBITDA. Affinion International International Products. International products net revenues decreased by $0.9 million, or 0.4%, to $253.3 million for the year ended December 31, 2009 as compared to $254.2 million for the year ended December 31, 2008. Net revenues excluding the $2.0 million benefit from purchase accounting decreased by $2.9 million, or 1.1%, primarily due to the $32.1 million impact of the stronger U.S. dollar and lower net revenues in our Package business of approximately $6.5 million, primarily as a result of changes in contract renewal renegotiations with existing clients. Additionally, net revenues from other retail products and other businesses declined $5.9 million, primarily due to a reduction in members. These decreases were partially offset by increases totaling $41.9 million from growth in new retail products and businesses acquired in the fourth quarter of 2008. Segment EBITDA decreased by $1.0 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008. Increases from growth in new retail and the net effect of acquired businesses were more than offset by the net negative impact of the stronger U.S. dollar, decreases in Package and other business net revenues and an increase in general and administrative expenses, primarily from higher employee-related costs. Financial Condition, Liquidity and Capital Resources Financial Condition December 31, 2010 and December 31, 2009
December 31, 2010 December 31, 2009 (in millions) Increase (Decrease)

Total assets Total liabilities Total deficit

1,515.2 2,380.1 (864.9)

1,469.4 2,076.2 (606.8)

45.8 303.9 (258.1)

Total assets at December 31, 2010 as compared to December 31, 2009 increased by $45.8 million due to (i) an increase in cash of $51.3 million (see " Liquidity and Capital Resources Cash Flows"), (ii) an increase in goodwill of $83.9 million, principally related to the Connexions acquisition, and (iii) an increase in property and equipment of $14.5 million, as property and equipment additions, including $4.7 million obtained in connection with the Connexions acquisition, exceeded depreciation and amortization expense of $35.4 million. These increases were partially offset by (i) a decrease in other intangibles, net of $63.8 million, principally due to amortization expense of $149.7 million and the impact of changes in foreign exchange rates, which were partially offset by acquired intangibles, principally member relationships and affinity relationships, of $90.1 million principally related to current year acquisitions and (ii) a decrease in other non-current assets of $40.7 million, principally due to the redemption of held-to-maturity debt securities of Holdings that had a carrying value as of December 31, 2009 of $54.9 million, partially offset by an increase in deferred financing costs of $14.7 million, representing the costs incurred in connection with our amended and restated credit facility and new 7.875% senior notes of $35.5 million, partially offset by amortization of the deferred financing costs and the write-off of the unamortized balances of the deferred financing costs associated with the prior credit facility and senior notes. Total liabilities at December 31, 2010 as compared to December 31, 2009 increased by $303.9 million due to (i) an increase in long-term debt of $250.9 million, principally as a result of the refinancing of our senior secured credit facility partially offset by the payoff of the prior term loan, the issuance of new 1 7.875% senior notes and the redemption of the then-outstanding 10 /8% senior notes and payments of the current term loan and (ii) an increase in accounts payable and accrued expenses of $85.9 million due to the timing of cash payments, increases in legal accruals and the impact of the acquisition of Connexions on July 1, 2010. These increases were partially offset by a decrease in deferred revenue of $35.2 million, primarily as a result of the continuing shift of retail members in our membership business from annual to monthly memberships. Total stockholder's deficit increased by $258.1 million, principally due to a net loss attributable to the Company of $142.6 million, a return of capital to the Company's parent of $119.8 million partially offset by a capital contribution from the Company's parent of $11.2 million. 51

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Liquidity and Capital Resources Our primary sources of liquidity on both a short-term and long-term basis are cash on hand and cash generated through operating and financing activities. Our primary cash needs are for working capital, capital expenditures and general corporate purposes, and to service the indebtedness incurred in connection with the Transactions, the subsequent refinancing and Holdings' issuance of the Holdings senior notes (see " Affinion Group Holdings, Inc.'s Dependence on Us to Service its Obligations"). Many of the Company's significant costs are variable in nature, including marketing and commissions. The Company has a great degree of flexibility in the amount and timing of marketing expenditures and focuses its marketing expenditures on its most profitable marketing opportunities. Commissions correspond directly with revenue generated and have been decreasing as a percentage of revenue over the last several years. We believe that, based on our current operations and anticipated growth, our cash on hand, cash flows from operating activities and borrowing availability under our revolving credit facility will be sufficient to meet our liquidity needs for the next twelve months and in the foreseeable future, including quarterly amortization payments on our term loan facility under our $1.0 billion amended and restated senior secured credit facility. The term loan facility also requires mandatory prepayments based on excess cash flows as defined in our amended and restated senior secured credit facility. However, under the amended and restated senior secured credit facility, the Company has a one year "holiday" on mandatory term loan prepayments based upon excess cash flows, therefore, the first mandatory prepayment based on excess cash flows, if applicable, will not be required until March 2012. Although we historically have a working capital deficit, a major factor included in this deficit is deferred revenue resulting from the cash collected from annual memberships which is deferred until the appropriate refund period has concluded. In spite of our historical working capital deficit, we have been able to operate effectively primarily due to our substantial cash flows from operations and our available revolving credit facility. However, as the membership base continues to shift away from memberships billed annually to memberships billed monthly, it had a negative effect on our operating cash flow. We anticipate that our working capital deficit will continue for the foreseeable future. On January 18, 2011, utilizing available cash on hand and borrowings under the revolving credit facility, the Company paid a dividend of approximately $123.4 million to Holdings. Holdings utilized the proceeds of the dividend and available cash on hand to (i) redeem approximately $41.2 million liquidation preference of Holdings' outstanding preferred stock, (ii) pay a dividend to Holdings' stockholders (including holders of restricted stock units) of $1.35 per share (approximately $115.4 million in the aggregate), (iii) pay a one-time cash bonus to Holdings' option holders of approximately $9.6 million and (iv) pay additional amounts for transaction fees and expenses. On February 11, 2011, utilizing borrowings under the term loan facility, the Company paid a dividend of approximately $200.0 million to Holdings, and expects to use the balance of the proceeds for working capital and other corporate purposes and to fund future strategic initiatives. Holdings utilized the proceeds of the dividend to (i) redeem approximately $5.4 million liquidation preference of Holdings' outstanding preferred stock, (ii) pay a dividend to Holdings' stockholders (including holders of restricted stock units) of $1.50 per share (approximately $128.2 million in the aggregate), (iii) pay a one-time cash bonus to certain of Holdings' option holders of approximately $5.2 million and (iv) pay additional amounts for transaction fees and expenses. Cash Flows Year Ended December 31, 2010 and 2009 At December 31, 2010, we had $121.1 million of cash and cash equivalents on hand, an increase of $51.3 million from $69.8 million at December 31, 2009. The following table summarizes our cash flows and compares changes in our cash and cash equivalents on hand to the same period in the prior year.
Year Ended December 31, 2010 2009 (in millions) Change

Cash provided by (used in): Operating activities Investing activities Financing activities Effect of exchange rate changes Net change in cash and cash equivalents Operating Activities

121.8 (131.3) 63.4 (2.6) 51.3

102.8 (111.5) 41.4 0.8 33.5

19.0 (19.8) 22.0 (3.4) 17.8

During the year ended December 31, 2010, we generated $19.0 million more cash from operating activities than during the year ended December 31, 2009. Segment EBITDA decreased by $45.6 million for the year ended December 31, 2010 as compared to the year ended December 31, 2009 (see " Results of Operations"). However, accounts payable and 52

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accrued expenses, which generated cash flows that were $50.9 million more favorable in 2010 than in 2009 and accounts receivable, which generated cash flows that were $42.5 million more favorable than in 2009, were positively impacted by the timing of receipts and payments, as well as the acquisition of Connexions on July 1, 2010. Partially offsetting this favorability in 2010 cash flows as compared to 2009 was decrease in cash flows related to the profitsharing receivables from insurance carriers as a result of the timing of periodic settlements with the insurance carriers. Investing Activities We used $19.8 million more cash in investing activities during the year ended December 31, 2010 as compared to the year ended December 31, 2009. During the year ended December 31, 2010, we used $171.8 million for acquisition-related payments, primarily for the July 1, 2010 acquisition of Connexions and the acquisition of a credit card registration membership business, consisting of membership contracts, in the first quarter of 2010 and $39.9 million for capital expenditures. Partially offsetting these uses of cash for the year ended December 31, 2010 was the receipt of $78.9 million as a result of the redemption of held-to-maturity debt securities of Holdings. During the year ended December 31, 2009, we used $49.2 million for the purchase of held-tomaturity debt securities of our parent, $22.5 million for acquisition-related payments and $39.9 million for capital expenditures. Financing Activities We generated $22.0 million more cash from financing activities during the year ended December 31, 2010 as compared to the year ended December 31, 2009. During the year ended December 31, 2010, we amended and restated our senior secured credit facility, resulting in new borrowings of $875.0 million and repayments of $648.6 million under the old term loan and an additional $6.7 million under the new term loan. We also issued $475.0 million aggregating principal amount of new 7.875% senior notes and received proceeds of $471.5 million and utilized the proceeds to redeem the then-outstanding $454.0 1 million aggregate principal amount of 10 /8% senior notes for $467.6 million. During the year ended December 31, 2010, we also incurred $35.5 million of deferred financing costs in connection with the amended and restated senior secured credit facility and new 7.875% senior notes and paid a dividend of $119.8 1 million to our parent company. During the year ended December 31, 2009, we realized proceeds of $136.5 million from the issuance of 10 /8% senior notes and incurred financing costs of $4.3 million. In addition, we made repayments under our term loan and revolving credit facility of $6.4 million and $57.0 million, respectively, and paid dividends of $26.2 million to our parent company. Cash Flows Years Ended December 31, 2009 and 2008 At December 31, 2009, we had $69.8 million of cash and cash equivalents on hand, an increase of $33.5 million from $36.3 million at December 31, 2008. The following table summarizes our cash flows and compares changes in our cash and cash equivalents on hand to the same period in the prior year.
Years Ended December 31, 2009 2008 (in millions) Change

Cash provided by (used in): Operating activities Investing activities Financing activities Effects of exchange rate changes Net change in cash and cash equivalents

102.8 (111.5) 41.4 0.8 33.5

103.1 (59.1) (19.2) (2.7) 22.1

(0.3) (52.4) 60.6 3.5 11.4

Operating Activities. During the year ended December 31, 2009, we generated $0.3 million less cash from operating activities in comparison to the same period in 2008. Segment EBITDA decreased $7.4 million for the year ended December 31, 2009 as compared to the year ended December 31, 2008 (see " Results of Operations"). The timing of realization of profit-sharing receivables due from insurance carriers resulted in $66.2 million more cash during the year ended December 31, 2009 compared to the year ended December 31, 2008. The additional cash generated was partially offset by the impact of timing of collection of receivables which resulted in a decrease in operating cash flows for the year ended December 31, 2009 of $20.5 million compared to the prior year and $15.5 million less cash generated from other non-current assets during the year ended December 31, 2009 compared to 2008, principally due to an increase in long-term receivables. The additional cash generated was also partially offset by the change in deferred revenue resulting in $17.0 million less cash from operations during the year ended December 31, 2009 compared to the comparable period of 2008. The operating cash flow impact of receivables reflects the impact of seasonality on the businesses acquired in the fourth quarter of 2008. 53

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Investing Activities. We used $52.4 million more cash in investing activities during the year ended December 31, 2009 as compared to the year ended December 31, 2008 principally due to the purchase of held-to-maturity debt securities for $49.2 million. In addition, during the year ended December 31, 2009 we made acquisition-related payments, net of cash acquired, totaling $22.5 million and had capital expenditures of $39.9 million, compared to acquisition-related payments, net of cash acquired of $13.7 million and capital expenditures of $36.7 million during the prior year. Restricted cash requirements in international operations were $8.8 million less in 2009 as compared to 2008, principally as a result of the acquisition in 2008 of a European travel company. As previously noted, the Company has historically funded its capital expenditures and acquisitions from its cash on hand, operating cash flows and, as needed, from its available capacity under the revolving credit facility. Financing Activities. We generated $60.6 million more cash from financing activities during the year ended December 31, 2009 as compared to the year 1 ended December 31, 2008. During the year ended December 31, 2009, we issued $150.0 million face amount of 10 /8% senior notes for proceeds net of discount of $136.5 million and incurred financing costs of $4.5 million. We also utilized $57.0 million to fully pay down our revolving credit facility and had principal payments on borrowings of $6.7 million during the year ended December 31, 2009. During the year ended December 31, 2008, we borrowed $18.5 million on our line of credit and paid down $0.3 million on our long-term debt. In addition, we paid dividends to Holdings during the years ended December 31, 2009 and 2008 of $26.2 million and $37.0 million, respectively. At December 31, 2009, the Company had available borrowing capacity of $93.2 million under its revolving credit facility. In January 2007, Holdings incurred debt of $350 million in the form of a five-year senior unsecured term loan facility. In 2008 and 2009, we made dividend distribution to Holdings to enable it to service its debt and we expect that Holdings will continue to require us to pay dividends (to the extent we are permitted legally and contractually) to enable it to service its debt. On January 23, 2008 and January 25, 2008, Holdings entered into interest rate swaps with the same counterparty, effective March 1, 2008. The swaps, with notional amounts of $200.0 million and $100.0 million, respectively, require Holdings to pay a fixed rate of interest of 2.79% and 3.19%, respectively, beginning on March 1, 2008 through March 1, 2010, in exchange for receiving floating payments based on a six-month LIBOR rate on the same $200.0 million and $100.0 million notional amounts for the same period. On September 15, 2008, Holdings entered into a two-year interest rate swap agreement with the same counterparty. This swap, with a notional amount of $50.0 million, requires Holdings to pay a fixed rate of interest of 3.17% beginning on September 2, 2008 through September 1, 2010, in exchange for receiving floating payments based on a sixmonth LIBOR rate on the same $50.0 million notional amount for the same period. The effect of these three swaps is to convert all of Holdings' variable rate debt to a fixed rate obligation. If Holdings had continued to elect to pay cash interest on its term loan facility, the cash required to service the debt in 2009, net of the impact of the three interest rate swaps, would have been approximately $33.9 million (including interest on debt securities held by us). However, Holdings has made a payment-in-kind election for the interest period ending September 1, 2009 so the cash required to service its debt in 2009, including its interest rate swaps, was approximately $19.2 million. Credit Facilities and Long-Term Debt Following the completion of the Transactions, we became a highly leveraged company, having incurred substantial debt. As of December 31, 2010, we had approximately $1.7 billion in indebtedness (which does not give effect to the subsequent incurrence of $250.0 million of Incremental Term Loans). Payments required to service this indebtedness have substantially increased our liquidity requirements as compared to prior years. As part of the Transactions, we (a) issued $270.0 million principal amount of 10 /8% senior notes due October 15, 2013 (the "initial 2005 senior notes") ($266.4 million net of discount), (b) entered into our senior secured credit facility, or the Affinion Credit Facility, consisting of a term loan facility in the principal amount of $860.0 million (which amount does not reflect the $231.0 million in principal prepayments that we made prior to amendment and restatement of the senior secured credit facility in April, 2010) and a revolving credit facility in an aggregate amount of up to $100.0 million and (c) entered into a senior subordinated bridge loan facility in the principal amount of $383.6 million. On October 17, 2005, we issued $270.0 million aggregate principal amount of the initial 2005 senior notes and applied the gross proceeds of $266.4 million to finance a portion of the Transactions. On May 3, 2006, we issued an additional $34.0 million aggregate principal amount of follow-on senior notes (the "follow on 2005 senior notes" and together with the initial 2005 senior notes, the "2005 senior notes") and applied the gross proceeds, together with cash on hand, to repay the then remaining outstanding borrowings under our bridge loan facility. On June 5, 2009, we issued $150.0 million aggregate principal amount of 2009 senior notes for net proceeds of $136.5 million in a private placement transaction. As described below, the 2005 senior notes and the 2009 senior notes were repaid in the fourth quarter of 2010 and are no longer outstanding. Before the 2005 senior notes and the 2009 senior notes were repaid, the interest on such notes was payable semi-annually. The 2005 senior notes and the 2009 senior notes were guaranteed by the same subsidiaries that guarantee our senior secured credit facility (see below) and our senior subordinated notes (as defined below). The 2005 senior 54
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notes and the 2009 senior notes contained restrictive covenants related primarily to our ability to distribute dividends to Holdings, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. Our senior subordinated bridge loan facility has been refinanced with the proceeds from the offering of senior subordinated notes and additional senior 1 notes. On April 26, 2006, we issued $355.5 million aggregate principal amount of 11 /2% senior subordinated notes due October 15, 2015 (the "senior subordinated notes") and applied the gross proceeds of $350.5 million to repay $349.5 million of outstanding borrowings under our senior subordinated loan facility, plus accrued interest, and used cash on hand to pay fees and expenses associated with such issuance. The interest on our senior subordinated notes is payable semi-annually. We may redeem some or all of the senior subordinated notes at the redemption prices (generally at a premium) set forth in the indenture governing the senior subordinated notes. The senior subordinated notes are unsecured obligations. The senior subordinated notes are guaranteed by the same subsidiaries that guarantee our amended and restated senior secured credit facility and our senior notes. The senior subordinated notes contain restrictive covenants related primarily to our ability to distribute dividends to our parent, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. On April 9, 2010, the Company, as borrower, and Holdings entered into a $1.0 billion amended and restated senior secured credit facility with its lenders, amending our senior secured credit facility. We refer to the amended and restated senior secured credit facility, as amended from time to time, including by the Incremental Assumption Agreements (as defined below) as "our senior secured credit facility. Our senior secured credit facility initially consisted of a five-year $125.0 million revolving credit facility and an $875.0 million term loan facility. On December 13, 2010, the Company, as borrower, Holdings and certain of the Company's subsidiaries entered into an Incremental Assumption Agreement with two of its lenders (the "Revolver Incremental Assumption Agreement," and together with the Term Loan Incremental Assumption Agreement, the "Incremental Assumption Agreements") which resulted in an increase in the revolving credit facility from $125.0 million to $160.0 million, with a further increase to $165.0 million upon the satisfaction of certain conditions. These conditions were satisfied in January 2011 and the revolving credit facility was increased to $165.0 million. On February 11, 2011, the Company, as borrower, and Holdings, and certain of the Company's subsidiaries entered into, and simultaneously closed under, the Term Loan Incremental Assumption Agreement, which resulted in an increase in the term loan facility from $875.0 million to $1.125 billion. The revolving credit facility includes a letter of credit subfacility and a swingline loan subfacility. The term loan facility matures in October 2016. However, the term loan facility will mature on the date that is 91 days prior to the maturity of the senior subordinated notes unless, prior to that date, (a) the maturity for our senior subordinated notes is extended to a date that is at least 91 days after the maturity of the term loan facility or (b) the obligations under our senior subordinated notes are (i) repaid in full or (ii) refinanced, replaced or defeased in full with new loans and/or debt securities with maturity dates occurring after the maturity date of the term loan. The term loan facility provides for quarterly amortization payments totaling 1% per annum, with the balance payable upon the final maturity date. The term loan facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. The interest rates with respect to the term loan facility and the revolving credit facility are based on, at our option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 3.50%, or (b) the highest of (i) Bank of America, N.A.'s prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50%, in each case plus 2.50%. The effective interest rate on the term loan for the period from April 9, 2010 to December 31, 2010 was 5% per annum. Our obligations under our senior secured credit facility are, and our obligations under any interest rate protection or other hedging arrangements entered into with a lender or any of its affiliates will be, guaranteed by Holdings and by each of our existing and subsequently acquired or organized domestic subsidiaries, subject to certain exceptions. Our senior secured credit facility is secured to the extent legally permissible by substantially all the assets of (i) Holdings, which consists of a pledge of all our capital stock and (ii) us and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by us or any subsidiary guarantor and (b) security interests in substantially all tangible and intangible assets of us and each subsidiary guarantor, subject to certain exceptions. Our senior secured credit facility also contains financial, affirmative and negative covenants. The negative covenants in our senior secured credit facility include, among other things, limitations (all of which are subject to certain exceptions) on our (and in certain cases, Holdings') ability to: declare dividends and make other distributions, redeem or repurchase our capital stock; prepay, redeem or repurchase certain of our subordinated indebtedness; make loans or investments (including acquisitions); incur additional indebtedness (subject to certain exceptions); enter into agreements that would restrict the ability of our subsidiaries to pay dividends; merge or enter into acquisitions; sell our assets; and enter into transactions with our affiliates. The credit facility also requires us to comply with financial maintenance covenants with a maximum ratio of total debt to EBITDA (as defined in our senior secured credit facility) and a minimum ratio of EBITDA to cash interest expense. The April 2010 proceeds of the term loan under our senior secured credit facility were utilized to repay the outstanding balance of the then existing senior secured term loan, including accrued interest, of $629.7 million and pay fees and expenses of approximately $27.0 million. The remaining proceeds are available for working capital and other general corporate purposes, including permitted acquisitions and investments. In 55

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connection with the refinancing, the Company recorded a loss on extinguishment of debt of $7.4 million during the year ended December 31, 2010. In January 2011, utilizing available cash on hand, the Company paid a dividend of approximately $123.4 million to Holdings. Holdings utilized the proceeds of the dividend and available cash on hand to (i) redeem Holdings' outstanding preferred stock with a liquidation preference of approximately $41.2 million, (ii) pay a dividend to Holdings' stockholders (including holders of restricted stock units) of $1.35 per share (approximately $115.4 million in the aggregate), (iii) pay a one-time cash bonus to Holdings' option holders of approximately $9.6 million and (iv) pay additional amounts for transaction fees and expenses. In February 2011, the Company used a portion of the Incremental Term Loans to pay a dividend of approximately $200.0 million to Holdings, and expects to use the balance of the proceeds for working capital and other corporate purposes and to fund future strategic initiatives. Holdings used the proceeds of the dividend to (i) redeem Holdings' outstanding preferred stock with a liquidation preference of approximately $5.4 million, (ii) pay a dividend to Holdings' stockholders (including holders of restricted stock units) of $1.50 per share (approximately $128.2 million in the aggregate), (iii) pay a one-time cash bonus to certain of Holdings' option holders of approximately $5.2 million and (iv) pay additional amounts for transaction fees and expenses. Any borrowings under the revolving credit facility are available to fund our working capital requirements, capital expenditures and for other general corporate purposes. On November 19, 2010, the Company completed a private offering of $475.0 million aggregate principal amount of 7.875% senior notes due 2018 (the "7.875% senior notes") providing net proceeds of $471.5 million. The 7.875% senior notes bear interest at 7.875% per annum payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2011. The 7.875% senior notes will mature on December 15, 2018. The 7.875% senior notes are redeemable at the Company's option prior to maturity. The indenture governing the 7.875% senior notes contains negative covenants which restrict the ability of the Company and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. The Company's obligations under the 7.875% senior notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by each of the Company's existing and future domestic subsidiaries that guarantee the Company's indebtedness under our senior secured credit facility. The 7.875% senior notes and guarantees thereof are senior unsecured obligations of the Company and rank equally with all of the Company's and the guarantors existing and future senior indebtedness and senior to the Company's and the guarantors existing and future subordinated indebtedness. The 7.875% senior notes are effectively subordinated to the Company's and the guarantors' existing and future secured indebtedness, including the Company's obligations under our senior secured credit facility, to the extent of the value of the collateral securing such indebtedness. The 7.875% senior notes are structurally subordinated to all indebtedness and other obligations of each of the Company's existing and future subsidiaries that are not guarantors. In connection with the issuance of the 7.875% senior notes, the Company entered into a registration rights agreement, pursuant to which the Company has agreed, among other things, to offer to exchange the 7.875% senior notes for a new issue of substantially identical notes that have been registered under the Securities Act of 1933, as amended. In the event that the Company does not comply with its obligations under the registration rights agreement, the Company will be required to pay liquidated damages to holders of the 7.875% senior notes in an amount equal to 0.25% per annum of the principal amount of the 7.875% senior notes, which amount will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all defaults under the registration rights agreement have been cured up to a maximum of 1.00% per annum. The Company used substantially all of the net proceeds of the offering of the 7.875% senior notes to repay all of the 2005 senior notes and the 2009 senior notes. At December 31, 2010, we had $868.4 million outstanding under the term loan facility, $475.0 million ($471.5 million net of premiums and discounts) outstanding under the 7.875% senior notes and $355.5 million ($353.0 million net of discounts) outstanding under the senior subordinated notes. At December 31, 2010, there were no outstanding borrowings under the revolving credit facility and the Company had $153.2 million available under the revolving credit facility after giving effect to the issuance of $6.8 million of letters of credit. Covenant Compliance Our amended and restated senior secured credit facility, which we refer to in this section as our credit facility, and the indentures that govern our 7.875% senior notes and our senior subordinated notes contain various restrictive covenants. They prohibit us from prepaying indebtedness that is junior to such debt (subject to certain exceptions). Our credit facility requires us to maintain a specified minimum interest coverage ratio and a maximum consolidated leverage ratio. The interest coverage ratio as defined in our credit facility (Adjusted EBITDA, as defined, to interest expense, as defined) must be greater than 1.75 to 1.0 at December 31, 2010. The consolidated leverage ratio as defined in our credit facility (total debt, as defined, to Adjusted EBITDA, as defined) must be less than 6.75 to 1.0 at December 31, 2010. In addition, our credit facility, among other things, restricts our ability to incur indebtedness or liens, make investments or declare or pay any dividends to our 56

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parent. The indentures governing the 7.875% senior notes and the indenture governing the senior subordinated notes, among other things: (a) limit our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) limit our ability to enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) place restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. However, all of these covenants are subject to significant exceptions. As of December 31, 2010, the Company was in compliance with the restrictive covenants under its debt agreements and expects to be in compliance over the next twelve months. We have the ability to incur additional debt, subject to limitations imposed by our credit facility and the indentures governing our 7.875% senior notes and senior subordinated notes. Under our indentures governing the 7.875% senior notes and the senior subordinated notes, in addition to specified permitted indebtedness, we will be able to incur additional indebtedness as long as on a pro forma basis our fixed charge coverage ratio (the ratio of Adjusted EBITDA to consolidated fixed charges) is at least 2.0 to 1.0. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures Adjusted EBITDA consists of income from operations before depreciation and amortization further adjusted to exclude certain non-cash, unusual and other adjustments permitted in our debt agreements to test the permissibility of certain types of transactions, including debt incurrence. We believe that the inclusion of Adjusted EBITDA is appropriate as a liquidity measure. Adjusted EBITDA is not a measurement of liquidity or financial performance under U.S. GAAP and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. You should not consider Adjusted EBITDA as an alternative to cash flows from operating activities determined in accordance with U.S. GAAP, as an indicator of cash flows, as a measure of liquidity, as an alternative to operating or net income determined in accordance with U.S. GAAP or as an indicator of operating performance. Set forth below is a reconciliation of our consolidated net cash provided by operating activities for the twelve months ended December 31, 2010 to Adjusted EBITDA.
Twelve Months Ended December 31, 2010 (in millions)

Net cash provided by operating activities Interest expense, net Income tax expense Amortization of favorable and unfavorable contracts Amortization of debt discount and financing costs Unrealized loss on interest rate swaps Deferred income taxes Interest accretion on held-to-maturity debt securities Payment received for assumption of loyalty points program liability Changes in assets and liabilities (a) Effect of the Transactions, reorganizations, certain legal costs and net cost savings (b) Other, net (c) Adjusted EBITDA, excluding Connexions (d) Effect of the Connexions acquisition (e) Adjusted EBITDA, including Connexions (a) (b) (c) Eliminates the effect of the Transactions, legal costs for certain legal matters and costs associated with severance incurred.

121.8 146.4 12.8 2.2 (10.6) (2.9) (7.0) 6.0 (6.5) 8.6 28.5 19.2 318.5 9.0 327.5

Eliminates (i) net changes in certain reserves, (ii) foreign currency gains and losses related to unusual, non-recurring intercompany transactions, (iii) the loss from an investment accounted for under the equity method, (iv) costs related to acquisitions and (v) consulting fees paid to Apollo. Adjusted EBITDA, excluding Connexions, does not give pro forma effect to our acquisition of (i) Connexions that was completed in the third quarter of 2010 and (ii) Webloyalty that was completed in the first quarter of 2011. However, we do make such accretive pro forma adjustments for (i) Connexions as if such acquisitions had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the amended and restated senior secured credit facility and the indentures governing our 7.875% senior notes and senior subordinated notes and (ii) Webloyalty as if such acquisition had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the indentures governing our 7.875% senior notes and senior subordinated notes. Gives effect to the completion of the Connexions acquisition as if it had occurred on January 1, 2010. Adjusted EBITDA, including Connexions, does not give pro forma effect to our acquisition of Webloyalty that was completed in the first quarter of 2011. However, we do make such accretive pro forma adjustment as if such acquisition had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the indentures governing our 7.875% senior notes and senior subordinated notes. 57

(d) (e)

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Set forth below is a reconciliation of our consolidated net loss for the twelve months ended December 31, 2010 to Adjusted EBITDA.
Twelve Months Ended December 31, 2010 (in millions)

Net loss attributable to Affinion Group, Inc. Interest expense, net Income tax expense Non-controlling interest Other expense, net Loss on extinguishment of debt Depreciation and amortization Effect of the Transactions, reorganizations and non-recurring revenues and gains (a) Certain legal costs (b) Net cost savings (c) Other, net (d) Adjusted EBITDA, excluding Connexions (e) Effect of the Connexions acquisition (f) Adjusted EBITDA, including Connexions (g) Interest coverage ratio (h) Consolidated leverage ratio (i) Fixed charge coverage ratio (j) (a) (b) (c) (d) Effect of the Transactions, reorganizations and non-recurring revenues and gains eliminates the effects of the Transactions. Certain legal costs represents the elimination of legal costs for certain legal matters. Net cost savings represents the elimination of costs associated with severance incurred.

(142.6) 146.4 12.8 1.0 1.8 37.0 195.2 (5.9) 26.8 7.6 38.4 318.5 9.0 327.5 2.32 5.04 2.15

Other, net represents the elimination of: (i) net changes in certain reserves, (ii) share-based compensation expense, (iii) foreign currency gains and losses related to unusual, non-recurring intercompany transactions, (iv) the loss from an investment accounted for under the equity method, (v) costs related to acquisitions, (vi) consulting fees paid to Apollo and (vii) facility exit costs. Adjusted EBITDA, excluding Connexions, does not give pro forma effect to our acquisition of (i) Connexions that was completed in the third quarter of 2010 and (ii) Webloyalty that was completed in the first quarter of 2011. However, we do make such accretive pro forma adjustments for (i) Connexions as if such acquisition had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the amended and restated senior secured credit facility and the indentures governing our 7.875% senior notes and senior subordinated notes and (ii) Webloyalty as if such acquisition had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the indentures governing our 7.875% senior notes and senior subordinated notes. Gives effect to the completion of the Connexions acquisition as if it had occurred on January 1, 2010. Adjusted EBITDA, including Connexions, does not give pro forma effect to our acquisition of Webloyalty that was completed in the first quarter of 2011. However, we do make such accretive pro forma adjustment as if such acquisition had occurred on January 1, 2010 in calculating the Adjusted EBITDA under the indentures governing our 7.875% senior notes and senior subordinated notes. The interest coverage ratio is defined in our amended and restated senior secured credit facility (Adjusted EBITDA, as defined, to interest expense, as defined). The interest coverage ratio must be greater than 1.75 to 1.0 at December 31, 2010. The consolidated leverage ratio is defined in our amended and restated senior secured credit facility (total debt, as defined, to Adjusted EBITDA, as defined). The consolidated leverage ratio must be less than 6.75 to 1.0 at December 31, 2010. The fixed charge coverage ratio is defined in the indentures governing our 7.875% senior notes and the senior subordinated notes (consolidated cash flows, as defined, which is equivalent to Adjusted EBITDA (as defined in our amended and restated senior secured credit facility), to fixed charges, as defined). The calculation of fixed charges excludes the amortization of deferred financing costs associated with the amendment and restatement of our credit facility on April 9, 2010.

(e)

(f) (g)

(h) (i) (j)

Contractual Obligations and Commitments The following table summarizes our aggregate contractual obligations at December 31, 2010, and the estimated timing and effect that such obligations are expected to have on our liquidity and cash flow in future periods. We expect to fund the contractual obligations and commitments with operating cash flow generated in the normal course of business and availability under the revolving credit facility. 58

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2016 and thereafter

2011

2012

2013

2014

2015

Total

(dollars in millions)

Term loan due 2016 7.875% senior notes due 2018 (1) 1 11 /2% senior subordinated notes due 2015 (1) Interest payments (2) Other purchase commitments (3) Operating lease commitments Capital lease obligations Consulting agreements (4) Employment agreements (5) Total firm commitments and outstanding debt (1) (2) (3) (4) (5)

8.7 121.7 15.5 16.5 0.4 2.6 5.1 170.5

8.7 121.7 5.2 15.9 0.4 2.6 1.6 156.1

8.7 121.7 1.0 15.7 0.4 2.6 0.9 151.0

8.8 121.7 13.4 0.2 2.6 146.7

8.8 355.5 113.5 12.5 2.6 492.9

824.7 475.0 144.5 71.1 5.2 1,520.5

868.4 475.0 355.5 744.8 21.7 145.1 1.4 18.2 7.6 2,637.7

Long-term debt (which does not reflect the $250.0 million increase in the term loan incurred in February 2011) reflected at face amount. Interest on variable rate debt is based on December 31, 2010 interest rates adjusted for the Company's interest rate swaps. Represents commitments under purchase agreements for marketing and membership program support services. Represents annual management fee payable under the consulting agreement with Apollo. See "Item 13. Certain Relationships and Related Transactions, and Director Independence Ancillary Agreements to the Purchase Agreement Consulting Agreement" below. Represents salary and target bonus amounts attributable to those employment agreements described under "Item 11. Executive Compensation." Amounts are based on the assumption that no agreements are renewed beyond their initial terms and all performance metrics for bonus payouts are achieved. Amounts exclude severance and other payouts due upon termination of employment.

The above table does not give effect to contingent obligations, such as litigation claims, standard guarantees and indemnities, deferred purchase price related to acquisitions, surety bonds and letters of credit, due to the fact that at this time we cannot determine either the amount or timing of payments related to these contingent obligations. See Note 11 to our audited consolidated financial statements included elsewhere herein for a discussion of these contingent obligations. The above table also does not include obligations in connection with our liabilities for uncertain tax positions as we have significant federal and state net operating loss carryforwards that we believe will be available to offset any liabilities for uncertain tax positions incurred. In addition, we refer you to our audited consolidated financial statements as of and for the years ended December 31, 2010, 2009 and 2008. Affinion Group Holdings, Inc.'s Dependence on Us to Service its Obligations On October 5, 2010, Holdings issued $325.0 million aggregate principal amount of 11.625% senior notes due November 15, 2015, or the Holdings senior notes, and applied the gross proceeds, together with cash distributions from the Company, to repay the Holdings Loan Agreement in full, to pay the related fees and expenses and for general corporate purposes. The interest on the Holdings senior notes is payable semi-annually. Holdings may redeem some or all of its senior notes at the redemption prices (generally at a premium) set forth in the indenture governing the Holdings senior notes. The Holdings senior notes are unsecured obligations and are not guaranteed by the Company or any of its subsidiaries. The Holdings senior notes contain restrictive covenants related primarily to Holdings' ability to distribute dividends to Holdings' stockholders, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. As a holding company with no significant assets other than the ownership of 100% of our common stock, Holdings will depend on our cash flows to make any cash interest payments on the Holdings senior notes. As described above, we expect that Holdings will rely on distributions from us in order to pay cash amounts due in respect of the Holdings senior notes. However, our ability to make distributions to Holdings is restricted by covenants contained in our amended and restated senior secured credit facility and the indentures governing our 7.875% senior notes and our senior subordinated notes and by Delaware law. To the extent we make distributions to Holdings, the amount of cash available to us to pay principal of, and interest on, our outstanding debt, including our amended and restated senior secured credit facility, our 7.875% senior notes and our senior subordinated notes, will be reduced, and we would have less cash available for other purposes, which could negatively impact our financial condition, our results of operations and our ability to maintain or expand our business. A failure to pay principal of, or interest on, our debt, including our senior secured credit facility, our 7.875% senior notes and our senior subordinated notes, would constitute an event of default under the applicable debt agreements, giving the holders of that debt the right to accelerate its maturity. In addition, to the extent we are not able to make distributions to Holdings because of the restrictions in our debt agreements or otherwise, then Holdings may not have sufficient cash on hand to service its obligations under the Holdings senior notes. Any failure by Holdings to pay principal of, or interest on, the Holdings senior notes would constitute an event of default under our amended and restated senior secured credit facility, giving the lenders thereunder the right to accelerate the repayment of all borrowings thereunder, which acceleration would also give rise to an event of default under our 7.875% senior notes and senior subordinated notes. If 59

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any of our debt is accelerated, we may not have sufficient cash available to repay it in full and we may be unable to refinance such debt on satisfactory terms or at all. Debt Repurchases During the first quarter of 2009, we purchased $2.6 million of Holdings' indebtedness under the unsecured senior term loan facility of Holdings (the "Holdings Loan Agreement") for $1.2 million and made a payment-in-kind dividend to Holdings. During the second quarter of 2009, utilizing cash on hand and available funds under the Affinion Credit Facility, we purchased $64.0 million face amount of Holdings' outstanding indebtedness under the Holdings Loan Agreement from an affiliate of Apollo for $44.8 million. During the fourth quarter of 2009, utilizing cash on hand, we purchased an additional $5.0 million face amount of Holdings' outstanding indebtedness under the Holdings Loan Agreement for $4.4 million. The purchases during the second and fourth quarters of 2009 were effected through a newly-formed non-guarantor subsidiary, Affinion Investments, LLC. In October 2010, utilizing a cash dividend in the amount of $115.3 million paid by us and a portion of the proceeds from the Holdings senior notes described above, Holdings repaid the Holdings Loan Agreement, including the portion we held through Affinion Investments, LLC. We or our affiliates may, from time to time, purchase any of our or Holdings' indebtedness. Any such future purchases may be made through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices as we or any such affiliates may determine. Off-Balance Sheet Arrangements We do not have any significant off-balance sheet arrangements that have not been disclosed in "Contractual Obligations and Commitments." Critical Accounting Policies In presenting our audited consolidated financial statements in conformity with accounting principles generally accepted in the U.S., or U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported therein. We believe that the estimates, assumptions and judgments involved in the accounting policies related to revenue recognition, accounting for marketing costs, valuation of goodwill and intangible assets, and valuation of tax assets and liabilities could potentially affect our reported results and as such, we consider these to be our critical accounting policies. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain, as they pertain to future events. However, certain events outside our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. We believe that the estimates and assumptions used when preparing our audited consolidated financial statements were the most appropriate at the time. Significant estimates include accounting for profit-sharing receivables from insurance carriers, accruals and income tax valuation allowances, the estimated fair value of stock-based compensation, estimated fair values of assets and liabilities acquired in business combinations and estimated fair values of financial instruments. For a summary of all of our significant accounting policies, see Note 2 to our audited consolidated financial statements. Purchase Accounting On October 17, 2005, Cendant completed the sale of the Predecessor to Affinion, an affiliate of Apollo. The sale was accounted for in accordance with the purchase method of accounting, which requires judgment regarding the allocation of the purchase price based on the fair values of the assets acquired (including intangible assets) and the liabilities assumed. The purchase accounting adjustments reflected in the Company's records primarily consist of: (1) revaluation of certain property and equipment, including internally developed software; (2) valuing intangibles assets consisting of affinity and member relationships, patents, trademarks and tradenames and proprietary databases and systems; (3) recognizing deferred revenues and prepaid commissions; and (4) recognizing the liability to service certain of our members during the period in which no revenue will be received. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was recognized as goodwill, which will be reviewed for impairment at least annually. We recorded goodwill of approximately $315.3 million related to the Transactions described above. In addition, the Company has made several other acquisitions that were accounted for in accordance with the purchase method of accounting. Substantially all of the cost of these acquisitions has been allocated to intangible assets. 60

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Revenue Recognition Our critical accounting policies in the area of revenue recognition pertain to our insurance profit-sharing arrangements. For our membership, package and loyalty programs, we operate in a business environment where we are paid a fee for a service performed and we do not recognize revenue until these services have been performed and such revenues are no longer subject to refund. Accordingly, revenue recognition for these programs is not particularly subjective or complex. We recognize insurance program commission revenue based on premiums earned by the insurance carriers that underwrite the policies we market. Premiums are typically paid either monthly or quarterly and revenue is recognized ratably over the underlying policy coverage period. We engage in revenue and profit-sharing arrangements with the insurance carriers that issue the underlying insurance policies. Commission revenue from insurance programs is reported net of insurance costs in our consolidated financial statements. On a semi-annual or annual basis, a profit-sharing settlement is made based on an analysis of the premiums paid to the insurance carriers less claims experience incurred to date, estimated claims incurred but not reported, reinsurance costs and carrier administrative fees. We accrue monthly revenue and related profit sharing receivables from insurance carriers resulting from our expected share of this excess based on the claims experience to date, including an estimate for claims incurred but not reported. Adjustments to the estimates recorded are made upon settlement with the insurance carriers. Historically, our claims experience has not resulted in a shortfall. The estimate of the periodic amount of claims incurred but not reported to the insurance company is based on models we have developed and maintain in consultation with the insurance carriers. The models are updated periodically for the most recent loss rates that we receive from the insurance companies and current market conditions. Any change to the estimates, based on actual experience, is reported in earnings in the period the change becomes known. The impact on 2010 net revenue subject to profit sharing arrangements of a 1% change in the claims incurred but not reported estimate as of December 31, 2010 would be approximately $0.3 million. Goodwill and Intangible Assets Under current accounting guidance, there is a requirement to assess goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company assesses goodwill for such impairment by comparing the carrying value of the reporting units to their fair values. Fair values of the reporting units are determined utilizing discounted cash flows and incorporate assumptions that we believe marketplace participants would utilize. Key assumptions used in the goodwill impairment test were long-term growth rates ranging from 1.5% to 2.5% and discount rates ranging from 11.0% to 15.0%. In 2010, the fair value of each of the reporting units that have goodwill exceeded its respective carrying amount by more than 25% of the carrying amount. Indefinite-lived intangible assets are tested for impairment and written down to fair value, as required by current accounting guidance. The Company performs reviews annually, or more frequently if circumstances indicate that an impairment may have occurred. There were no impairments identified during the years ended December 31, 2010, 2009 and 2008. The Company's intangible assets as of December 31, 2010 consist primarily of intangible assets with finite useful lives acquired by the Company in the Transactions and subsequent acquisitions and are recorded at their respective fair values in accordance with current accounting guidance. Income Taxes The Company is included as a member of Holdings' consolidated federal income tax return and as a member of certain of Holdings' unitary or combined state income tax returns. Income taxes are presented in the Company's consolidated financial statements using the asset and liability approach based on the separate return method for the consolidated group. Under this method, current and deferred tax expense or benefit for the period is determined for the Company and its subsidiaries as a separate group on a standalone basis. Deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statements and income tax bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the income tax provision, while increases to the valuation allowance result in additional income tax provision. The realization of deferred tax assets is primarily dependent on estimated future taxable income. As of December 31, 2010 and 2009, the Company has recorded a full valuation allowance for its U.S. federal net deferred tax assets. The Company has also recorded valuation allowances against the deferred tax assets of certain state and foreign taxing jurisdictions as of December 31, 2010 and 2009. 61

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The tax effects of an uncertain tax position ("UTP") taken or expected to be taken in income tax returns are recognized only if it is "more likely-thannot" to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes estimated accrued interest and penalties related to UTPs in income tax expense. The Company recognizes the benefit of a UTP in the period when it is effectively settled. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the tax position would be sustained upon examination. Cautionary Statements for Forward-Looking Information This Report contains "forward-looking statements" that involve risks and uncertainties. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information and, in particular, appear under headings "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." When used in this Report, the words "estimates," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," and variations of these words or similar expressions (or the negative versions of any such words) are intended to identify forward-looking statements. All forward-looking statements, including without limitation, management's examination of historical operating trends, are based on our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, management's expectations, beliefs and projections may not result or be achieved. We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Examples of forward-looking statements include: business strategy; financial strategy; projections of revenue, earnings, capital structure and other financial items; statements of our plans and objectives; statements of expected future economic performance; and assumptions underlying statements regarding us or our business.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the results referred to in the forward-looking statements contained in this Report. Important factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements we make in this Report are set forth elsewhere in this Report, including under the heading "Item 1A. Risk Factors." As stated elsewhere in this Report, these risks, uncertainties and other important factors include, among others: general economic and business conditions and international and geopolitical events; a downturn in the credit card industry or changes in the marketing techniques of credit card issuers; the effects of a decline in travel due to political instability, adverse economic conditions or otherwise, on our travel fulfillment business; termination or expiration of one or more agreements with our marketing partners, or reduction of the marketing of our services by one or more of our marketing partners; changes in, or the failure or inability to comply with, laws and governmental regulations, including changes in global distribution service rules, telemarketing regulations and privacy laws and regulations; the outcome of numerous legal actions; our substantial leverage and restrictions in our debt agreements; dependence on third-party vendors to supply certain products or services that we market; ability to execute our business strategy, development plans or cost savings plans; 62

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changes in accounting principles and/or business practices; availability, terms, and deployment of capital; and failure to protect private data, which would cause us to expend capital and resources to protect against future security breaches.

These risks and other uncertainties are discussed in more detail in "Item 1A. Risk Factors." There may be other factors, including those discussed elsewhere in this Report that may cause our actual results to differ materially from the results referred to in the forward-looking statements. All forwardlooking statements attributable to us or persons acting on our behalf apply only as of the date of this Report and are expressly qualified in their entirety by the cautionary statements included in this Report. We undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Following is a description of our risk management policies. Foreign Currency Risk During 2010, the Company entered into a foreign currency forward contract under which we agreed to sell GBP 3.5 million to mitigate a specific foreign currency exposure. However, we generally do not utilize foreign currency forward contracts as we do not consider our foreign currency risk to be material, although the Company continues to evaluate its foreign currency exposures in light of the current volatility in the foreign currency markets. Interest Rate Swaps We entered into an interest swap as of December 14, 2005. This swap converted a notional amount of the Company's floating rate credit facility into a fixed rate obligation. The notional amount of the swap decreased to $50.0 million on December 31, 2009 and terminates on December 31, 2010. In January 2008, the Company entered into a second interest rate swap effective February 21, 2008, which interest rate swap terminated February 21, 2011. The notional amount of the swap is $498.6 million at December 31, 2009 and increased to $598.6 million on February 22, 2010. Under the second swap, the Company has agreed to pay a fixed rate of interest of 2.86% in exchange for receiving floating payments based on a three-month LIBOR on the notional amount for each applicable period. The effect of this swap, in conjunction with the Company's existing interest rate swap, was to convert substantially all of the variable rate debt to a fixed rate obligation. In January 2009, the Company entered into an interest rate swap effective February 21, 2011. This swap has a notional amount of $500.0 million and terminates on October 17, 2012. Under this swap, the Company has agreed to pay a fixed rate of interest of 2.985% in exchange for receiving floating payments based on a three-month LIBOR on the notional amount for each applicable period. This swap is intended to reduce a portion of the variability of the future interest payments on the Company's term loan facility for the period after the Company's previously existing swaps expired. The interest rate swaps are recorded at fair value either as an asset or liability. The swaps are not designated as hedging instruments and therefore the changes in the fair value of the interest rate swaps is recognized currently in earnings in the accompanying consolidated statements of operations. The following table provides information about the Company's financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company's long-term debt as of December 31, 2010 (dollars are in millions unless otherwise indicated).
2016 and Thereafter Fair Value At December 31, 2010

2011

2012

2013

2014

2015

Total

Fixed rate debt Average interest rate Variable rate debt Average interest rate (a) Variable to fixed - interest rate swap (b) Average pay rate Average receive rate (a)

0.4 $ 0.4 $ 0.4 $ 0.2 $ 355.5 $ 9.43% 9.43% 9.43% 9.43% 9.43% $ 8.7 $ 8.7 $ 8.7 $ 8.8 $ 8.8 $ 5.00% 5.00% 5.00% 5.00% 5.00% 2.55% 0.40% 2.98% 1.00%

475.0 $ 831.9 7.88% 824.7 $ 868.4 5.00%

$ $ $

835.2 867.9 (22.1)

Average interest rate is based on rates in effect at December 31, 2010. 63

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(b)

The fair value of the interest rate swaps is included in accounts payable and accrued expense ($3.9 million) and other long-term liabilities ($18.2 million) at December 31, 2010. The fair value has been determined after consideration of interest rate yield curves, and the creditworthiness of the parties to the interest rate swaps.

As disclosed in Note 2 to our audited consolidated financial statements, as a matter of policy, we do not use derivatives for trading or speculative purposes. Foreign Currency Forward Contract At December 31, 2010, the Company's estimated fair value of its foreign currency forward contract is based upon available market information. The fair value of the foreign currency forward contract is based on significant other observable inputs, adjusted for contract restrictions and other terms specific to the foreign currency forward contract. The fair value has been determined after consideration of foreign currency exchange rates and the creditworthiness of the party to the foreign currency forward contract. The counterparty to the foreign currency forward contract is a major financial institution with a long-term rating of Aa1 by Moody's, A+ by Standard & Poor's and AA- by Fitch Ratings as of February 24, 2011. The Company does not expect any losses from nonperformance by this counterparty. Credit Risk and Exposure Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of receivables, profit-sharing receivables from insurance carriers and prepaid commissions. We manage such risk by evaluating the financial position and creditworthiness of such counterparties. As of December 31, 2009 and 2010, approximately $68.6 million and $73.7 million, respectively, of the profit-sharing receivables from insurance carriers were due from one insurance carrier. Receivables and profit share receivables from insurance carriers are from various marketing, insurance and business partners and we maintain an allowance for losses, based upon expected collectibility. Commission advances are evaluated at least quarterly as to recovery. 64

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Item 8.

Financial Statements and Supplementary Data AFFINION GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2010 and 2009 Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Changes in Deficit for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 Notes to Consolidated Financial Statements 65

F-2 F-3 F-4 F-5 F-6 F-7

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Item 9. None. Item 9A.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Controls and Procedures

Evaluation of Disclosure Control and Procedures. The Company, under the direction of the Chief Executive Officer and the Chief Financial Officer, has established disclosure controls and procedures ("Disclosure Controls") that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Disclosure Controls are also intended to ensure that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our Disclosure Controls or our "internal controls over financial reporting" ("Internal Controls") will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Notwithstanding the foregoing, our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. As of December 31, 2010, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2010, the Company's disclosure controls and procedures are effective at the reasonable assurance level. Changes in Internal Control over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting. Management's Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in a reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 66

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal Control-Integrated Framework. Based on this assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2010. The effectiveness of the Company's internal control over financial reporting has been audited by Deloitte and Touche LLP, an independent registered public accounting firm, as stated in their report, which is included below. 67

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Affinion Group, Inc: We have audited the internal control over financial reporting of Affinion Group, Inc. and subsidiaries (the "Company") as of December 31, 2010, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2010 of the Company and our report dated March 3, 2011 expressed an unqualified opinion on those financial statements. /s/ Deloitte & Touche LLP Stamford, CT March 3, 2011 68

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Item 9B. None.

Other Information

PART III Item 10. Directors, Executive Officers and Corporate Governance

Set forth below is certain information concerning the individuals that are currently serving as our executive officers and/or members of our Board of Directors. Each of Messrs. Becker, Parker, Press, Nord, Srednicki, Ellenthal and Kelly was nominated by Apollo to serve as a director pursuant to the Holdings Stockholder Agreement, and each of Messrs. Fernandes, Miller and Levy was nominated by General Atlantic to serve as a director pursuant to the Holdings Stockholder Agreement and Mr. Lipman, in his capacity as Chief Executive Officer, was nominated to serve as a director pursuant to the Holdings Stockholder Agreement.
Name Age Position

Nathaniel J. Lipman Todd H. Siegel Steven E. Upshaw

46 Chief Executive Officer and Chairman of the Board of Directors 40 Executive Vice President and Chief Financial Officer 40 President Global Operations, President of Affinion until January 14, 2011 and Chief Executive Officer of Affinion International Limited until January 14, 2011 Richard J. Fernandes 52 President and Director of Affinion and Chief Executive Officer of Affinion International Limited Lloyd M. Wirshba 52 President and Chief Executive Officer, North America Sloane Levy 46 Executive Vice President and General Counsel Brian J. Dick 54 Senior Vice President and Chief Accounting Officer Marc E. Becker 38 Director Stan Parker 35 Director Eric L. Press 45 Director Matthew H. Nord 31 Director Richard J. Srednicki 63 Director Jonathan E. Ellenthal 45 Director Anton J. Levy 37 Director Alfred F. Kelly 52 Director Scott D. Miller 58 Director Nathaniel J. Lipman has served as our Chief Executive Officer and a director of Affinion since October 17, 2005. He was formerly the President of Affinion from October 17, 2005 to January 13, 2010, the President and Chief Executive Officer of Trilegiant starting in August 2002 and President and Chief Executive Officer of Cendant Marketing Group starting in January 2004. From September 2001 until August 2002, he was Senior Executive Vice President of Business Development and Marketing of Trilegiant. He served as Executive Vice President of Business Development for Cendant Membership Services from March 2000 to August 2001. He joined the Alliance Marketing Division of Cendant in June 1999 as Senior Vice President, Business Development and Strategic Planning. Mr. Lipman was previously Senior Executive Vice President, Corporate Development and Strategic Planning, for Planet Hollywood International, Inc., from 1996 until April 1999. Prior to his tenure at Planet Hollywood, Mr. Lipman was Senior Vice President and General Counsel of House of Blues Entertainment, Inc., Senior Corporate Counsel at The Walt Disney Company and a corporate associate at Skadden, Arps, Slate, Meagher and Flom. Mr. Lipman serves on the board of directors of EVERTEC, Inc. Mr. Lipman has significant experience in our business. He has served as Affinion's Chief Executive Officer since the Acquisition and as the Chief Executive Officer of several of Affinion's predecessor companies prior to the Acquisition. His fundamental understanding of our business, his demonstrated leadership and his current responsibilities as Affinion's Chief Executive Officer make him highly qualified as the Chairman of Affinion's Board of Directors. 69

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Steven E. Upshaw was appointed President Global Operations on January 14, 2011. Mr. Upshaw was formerly the President of Affinion from January 13, 2010 until January 14, 2011, the Chief Executive Officer of Affinion International from June 1, 2007 until January 14, 2011, and the President of Affinion International from June 1, 2007 until January 14, 2011. From October 17, 2005 to May 31, 2007, Mr. Upshaw served as an Executive Vice President and Chief Executive Officer, Affinion International. Prior to this role, Mr. Upshaw held the position of Executive Vice President and Managing Director for Cims UK, Ireland. Mr. Upshaw joined us in August 1995 and has served in numerous positions, including Senior Vice President for Protection Products in North America for Trilegiant. Todd H. Siegel was appointed Chief Financial Officer in November 2008 and has served as an Executive Vice President since October 17, 2005. Mr. Siegel also served as our General Counsel from October 17, 2005 to February 16, 2009. Mr. Siegel joined us in November 1999 as a member of the Legal Department of the Membership Division of Cendant and most recently served as General Counsel of Trilegiant starting in July 2003 and Cendant Marketing Group starting in January 2004. From 1997 to 1999, Mr. Siegel was employed as a corporate associate at Skadden, Arps, Slate, Meagher and Flom, LLP. From 1992 until 1994, he was employed as a certified public accountant with Ernst & Young. Richard J. Fernandes was appointed President and a director of Affinion and the Chief Executive Officer of Affinion International in connection with the acquisition of Webloyalty on January 14, 2011. From January 1999 until January 2011, Mr. Fernandes was the founder, Chief Executive Officer and Chairman of the Board of Directors of Webloyalty. Prior to 1999, Mr. Fernandes served as an Executive Vice President at CUC International. Mr. Fernandes brings to Affinion's Board of Directors his significant experience and leadership with Webloyalty, a company offering similar services to those offered by Affinion. Lloyd M. Wirshba was appointed President and Chief Executive Officer of Affinion Group, North America on December 1, 2010. Prior to joining Affinion, Mr. Wirshba worked at Barclays Plc as Chief Executive Officer and Chief Development Officer of Barclaycard US from May 2007 to November 2010. From July 2005 to May 2007, Mr. Wirshba served as Chief Marketing and Administrative Officer at ICT Group (now Sykes Enterprises, Inc.) and from May 2003 to February 2005 he served as Senior Vice President, Member Services at AOL. From May 1982 to April 2003, Mr. Wirshba held an increasing level of senior positions at American Express Company on both the card and merchant sides of the business. From 1979 to 1982, he was employed as a certified public accountant with Coopers & Lybrand (now PricewaterhouseCoopers). Sloane Levy was appointed Executive Vice President and General Counsel on January 14, 2011. From October 2006 to January 2011, Ms. Levy served as Senior Vice President and General Counsel of Webloyalty. From June 2005 to October 2006, Ms. Levy was Vice President and General Counsel for HarteHanks, Inc., a direct marketing company. From May 1999 to January 2005, Ms. Levy served as a Senior Vice President, General Counsel and directed the Human Resources department at Modem Media, Inc., an internet marketing and advertising company which was acquired by Digitas, Inc. in October 2004. From May 1994 to May 1999, Ms. Levy worked as a staff attorney at Witco Corporation and served as its Director of Investor Relations during the last year of her tenure. Previously, she was employed as a corporate associate at Weil, Gotshal & Manges LLP and at Arent Fox LLP. Brian J. Dick has served as our Senior Vice President and Chief Accounting Officer since December 1, 2005. Prior to joining Affinion, he was most recently an independent contractor from February 2005 through November 2005. He served as the Vice President and Controller for Modem Media, Inc., an internet marketing and advertising company which was acquired by Digitas, Inc. in October 2004, from October 2002 through January 2005, where he oversaw the global accounting, financial reporting, tax and treasury functions. From 1999 to 2001, he was the Vice President of Finance for Crompton Corporation, where he managed the Controllers, Information Systems and e-Business functions. From 1995 to 1999, he held various senior financial positions at Witco Corporation until it was acquired by Crompton Corporation. He also served as the Controller of Formica Corporation from 1989 to 1995. From 1978 to 1989, he held various positions with Price Waterhouse LLP (now PricewaterhouseCoopers). Marc E. Becker has been a director of Affinion since October 17, 2005. From October 17, 2005 to December 20, 2006, he served as the Chairman of the Board of Directors of Affinion. Mr. Becker is a partner of Apollo, where he has been employed since 1996 and has served as an officer of certain affiliates of Apollo since 1999. Prior to that time, Mr. Becker was employed by Smith Barney Inc. within its Investment Banking division. Mr. Becker serves on several boards of directors, including EVERTEC, Inc., Quality Distribution, Inc., Realogy Corporation and SOURCECORP Incorporated. During the past five years, Mr. Becker also served as a director of Countrywide plc (from May 2007 to February 2009), National Financial Partners (from May 2007 to January 2009) and Metals USA Inc. (from November 2005 to December 2007). Mr. Becker has significant experience in making and managing private equity investments on behalf of Apollo and over 15 years experience in financing, analyzing and investing in public and private companies. Mr. Becker previously co-led the diligence team for the Acquisition, and since then has worked closely with Affinion's management. 70

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Stan Parker has been a director of Affinion since October 17, 2005. Mr. Parker is a partner of Apollo, where he has been employed since 2000. From 1998 to 2000, Mr. Parker was employed by Salomon Smith Barney, Inc. in its Financial Entrepreneurs Group within the Investment Banking division. Mr. Parker serves on several boards of directors, including AMC Entertainment Inc., CEVA Logistics, Momentive Performance Materials Holdings, Inc. and Charter Communications. During the past five years, Mr. Parker also served as a director of Quality Distribution, Inc. (from May 2008 to November 2009) and United Agri Products, Inc. (from April 2004 to June 2007). Mr. Parker has significant experience in making and managing private equity investments on behalf of Apollo and over 12 years experience in financing, analyzing and investing in public and private companies. Mr. Parker previously co-led the diligence team for the Acquisition, and since then has worked closely with Affinion's management. Eric L. Press has been a director of Affinion since October 17, 2005. Mr. Press is a partner of Apollo, where he has been employed since 1998 and has served as an officer of certain affiliates of Apollo. From 1992 to 1998, Mr. Press was associated with the law firm of Wachtell, Lipton, Rosen & Katz specializing in mergers, acquisitions, restructurings and related financing transactions. From 1987 to 1989, Mr. Press was a consultant with The Boston Consulting Group. Mr. Press serves on several boards of directors, including Apollo Commercial Real Estate Finance, Inc., Athene Re, Caesars Entertainment Corporation, Metals USA, Inc., Noranda Aluminum Holding Corporation, Prestige Cruise Holdings and Verso Paper Corp. During the past five years, Mr. Press also served as a director of AEP Industries (June 2004 to February 2005), Innkeepers USA Trust (June 2007 to April 2010), Quality Distribution, Inc. (May 2004 to May 2008) and Wyndham International (May 2005 to August 2005). Mr. Press has significant experience in making and managing private equity investments on behalf of Apollo and over 20 years experience in financing, analyzing and investing in public and private companies. Mr. Press has worked closely with Affinion's management since the Acquisition. Matthew H. Nord has been a director of Affinion since October 30, 2006. Mr. Nord is a principal of Apollo, where he has been employed since 2003. Prior to that time, Mr. Nord was a member of the Investment Banking division of Salomon Smith Barney Inc. Mr. Nord serves on several boards of directors, including SOURCECORP Incorporated, Hughes Telematics, Noranda Aluminum Holding Corporation and EVERTEC, Inc. During the past five years, Mr. Nord has also served as a director of Mobile Satellite Ventures, a subsidiary of Skyterra Communications, Inc. (from September 2006 to April 2008). Mr. Nord has significant experience in making and managing private equity investments on behalf of Apollo and over nine years experience in financing, analyzing and investing in public and private companies. Mr. Nord previously co-led the diligence team for the Acquisition, and since then has worked closely with Affinion's management. Richard J. Srednicki has been a director of Affinion since September 21, 2007. From January 2000 to August 2007, Mr. Srednicki was an Executive Vice President of JPMorgan Chase and was responsible for its credit card business, Chase Cardmember Services. Mr. Srednicki was also a member of JPMorgan Chase's Executive Committee and Operating Committee. Previously, Mr. Srednicki held Chief Executive Officer positions with Sears, Roebuck and Co. and AT&T, as well as General Manager positions during his 13 years with Citibank. Mr. Srednicki brings to Affinion's Board of Directors his significant experience with companies offering financial services similar to those offered by Affinion, including companies in the credit card industry. Jonathan E. Ellenthal has been a director of Affinion since January 27, 2010. Mr. Ellenthal is the President and Chief Executive Officer of Walker Digital Management, LLC and has held this position since January 2008. From January 2005 to December 2007, Mr. Ellenthal was the Chief Executive Officer of Synapse Group, Inc., a direct marketing company with a similar marketing model and financial model to those of Affinion. Mr. Ellenthal held several senior leadership positions at Synapse Group, Inc. before becoming its Chief Executive Officer. Earlier in his career, Mr. Ellenthal served as the Executive Vice President of Cooperative Marketing Concepts, Inc. Mr. Ellenthal brings to Affinion's Board of Directors his significant experience with companies offering marketing services similar to those offered by Affinion. Anton J. Levy has been a director of Affinion since January 14, 2011. Mr. Levy currently serves as a Managing Director at General Atlantic LLC, where he has worked since 1998. Mr. Levy heads General Atlantic's Media and Consumer sector. Mr. Levy has worked closely with many of General Atlantic's portfolio companies and is currently serving on the board of directors of several General Atlantic portfolio companies, including AKQA Gilt Groupe, Mercado Libre and Network Solutions. He formerly served on the board of Dice Holdings, Inc., a provider of specialized career websites from August 2005 through July 2009 and on the board of Zantaz Corporation. Prior to joining General Atlantic in 1998, Mr. Levy was an investment banker with Morgan Stanley & Co. where he worked with the firm's technology clients. Mr. Levy brings to Affinion's Board of Directors his significant experience with Webloyalty, a company offering similar services to those offered by Affinion. Alfred F. Kelly has been a director of Affinion since February 24, 2011. From June 2007 to April 2010, Mr. Kelly was the President of American Express Company, where he had responsibility for American Express's global consumer businesses, including consumer and small business cards, customer service, global banking, prepaid products, consumer travel and risk and information management. From 2005 to 2007, he was a Group President responsible for several key 71

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businesses, including U.S. consumer and small business cards, merchant services, U.S. customer service and risk management. Mr. Kelly held positions of increasing responsibility at American Express from October 1987 to becoming President of the U.S. card business in 1998. From 1985 to 1987, Mr. Kelly served as head of information systems at the White House, where he oversaw the information processing functions for several government agencies that comprise the Executive Office of the President. Prior to that, he held various positions in information systems and strategic and financial planning at PepsiCo. Mr. Kelly serves on several boards of directors, including MetLife. Mr. Kelly brings to Affinion's Board of Directors his significant experience with companies offering financial services similar to those offered by Affinion, including companies in the credit card industry. Scott D. Miller has been a director of Affinion since February 24, 2011. Mr. Miller currently serves as the Chief Executive Officer of the SSA & Company, where he has been employed since 2004, a leading operational improvement consulting firm, and G100, a private equity forum for the chief executive officers of leading public companies and private equity firms. Mr. Miller served as Chairman of Hyatt Hotels and Resorts Corporation from 2003 to 2004, as President from 1999 to 2003 and as Executive Vice President from 1997 to 1999. From 1993 to 1997, Mr. Miller served as Chief Executive Officer of United Infrastructure Company, a company owned by Peter Kiewit and Sons and Bechtel Enterprises, dedicated to infrastructure acquisition, development, and operation. From 1981 to 1993, he was a founding partner of The John Buck Company, a Chicago based real estate brokerage, management and development company. Mr. Miller serves on several boards of directors, including AXA Financial, Inc. Additionally, Mr. Miller serves as a Special Advisor to General Atlantic. Mr. Miller brings to Affinion's Board of Directors his significant experience with public and private companies. Committees of our Board of Directors Our board of directors has a Compensation Committee, an Executive Committee, an Audit Committee and a Nominating and Corporate Governance Committee. Compensation Committee The current members of the compensation committee are Messrs. Becker, Press and Levy. The principal duties and responsibilities of the compensation committee are as follows: to review, evaluate and make recommendations to the full board of directors regarding our compensation policies and establish performancebased incentives that support our long-term goals, objectives and interests; to review and approve the compensation of our chief executive officer, the other executive officers, other officers and employees; to review and make recommendations to the board of directors with respect to our incentive compensation plans and equity-based compensation plans; to set and review the compensation of and reimbursement policies for members of the board of directors; to provide oversight concerning selection of officers, management succession planning, expense accounts, indemnification and insurance matters, and separation packages; and to prepare an annual compensation committee report, provide regular reports to the board, and take such other actions as are necessary and consistent with the governing law and our organizational documents.

Executive Committee The current members of the executive committee are Messrs. Becker, Levy and Nord. The principal duties and responsibilities of the executive committee are as follows: to advise and counsel the chairperson of the board of directors and the president regarding Company matters; to determine actions and responses to complaints regarding the conduct of directors, officers and committees, and make any findings or determinations as to the related cause; to oversee our legal and regulatory compliance program; to take such actions as are necessary due to their urgent or highly confidential nature, or where convening the board is impracticable, subject to certain limitations; and to regularly report to the board, review the charter and take such other actions as are necessary and consistent with the governing law and our organizational documents. 72

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Audit Committee The current members of the audit committee are Messrs. Nord, Srednicki and Kelly. Our board of directors has determined that Messrs. Srednicki and Kelly meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act and the NYSE listing standards, but that Mr. Nord does not meet such independence criteria. Mr. Kelly is the chairman of the audit committee. The principal duties and responsibilities of our audit committee are as follows: to monitor our financial reporting process and internal control system; to oversee the integrity of our financial statements; to appoint and replace our independent registered public accounting firm from time to time, determine their compensation and other terms of engagement, approve audit and non-audit services to be performed by such auditor and oversee their work; to oversee the performance of our internal audit function; and to oversee our compliance with legal, ethical and regulatory matters.

The audit committee has the power to investigate any matter brought to its attention within the scope of its duties. It also has the authority, at its discretion, to retain counsel and advisors to fulfill its responsibilities and duties at our expense. Although our Board of Directors has determined that each of the members of our audit committee is financially literate and has experience analyzing or evaluating financial statements, at this time we do not have an "audit committee financial expert" within the meaning of Item 407 of Regulation S-K under the Exchange Act serving on the audit committee. As a company whose stock is privately-held and given the financial sophistication and other business experience of the members of the audit committee, we do not believe that we require the services of an audit committee financial expert at this time. Nominating and Corporate Governance Committee The current members of the nominating and corporate governance committee are Messrs. Becker and Nord. The principal duties and responsibilities of the nominating and corporate governance committee are as follows: to assist the board in identifying individuals qualified to serve as members of the board and/or its committees; to develop and recommend to the board a set of corporate governance principles for the Company; and for overseeing the board's annual self-evaluation process.

Code of Ethics Although as a private company we are not obligated to adopt a formal code of ethics, the Company has adopted a core policies manual which includes a formal code of ethics and an annual re-certification. Upon request, we will provide to any person without charge a copy of the portions of our code of ethics that apply to our Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer. Item 11. Executive Compensation Compensation Discussion and Analysis Overview of Compensation Program The Compensation Committee of our board of directors, which we refer to herein as the "Committee," is responsible for establishing, implementing and continually monitoring adherence with our compensation philosophy. The Committee also serves as the compensation committee of the board of directors of Affinion Group Holdings, Inc., or Holdings. The Committee strives to ensure that the total compensation paid to our executive officers is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to our executive officers, including the named executive officers, are similar to those provided to executive officers at comparable companies in similarly situated positions. 73

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Named Executive Officers For 2010, our named executive officers and their respective titles were as follows: Nathaniel J. Lipman, President, Chief Executive Officer and Chairman of the Board Todd H. Siegel, Executive Vice President and Chief Financial Officer Robert G. Rooney, Executive Vice President and Chief Operating Officer through January 30, 2011 Steven E. Upshaw, President of Affinion (from January 13, 2010 until January 14, 2011), Chief Executive Officer of Affinion International, and President of Affinion International, from June 1, 2007 until January 14, 2011. After January 14, 2011, he serves as President Global Operations Lloyd M. Wirshba, President and Chief Executive Officer, North America, since December 1, 2010

Messrs. Lipman and Siegel were named executive officers for 2010 based on their positions with us as chief executive officer and chief financial officer, respectively. Messrs. Rooney, Upshaw and Wirshba were named executive officers based on their levels of compensation. Effective January 15, 2010, Mr. Lipman resigned as our President (but continues to serve as our Chief Executive Officer and Chairman) and Mr. Upshaw was appointed President of Affinion. Mr. Upshaw served as President of Affinion until January 14, 2011. Mr. Rooney's position was eliminated, effective January 30, 2011, as a result of the merger with Webloyalty. For fiscal year 2011, we expect that Mr. Richard J. Fernandes will be a named executive officer. Mr. Fernandes was appointed President and Director of Affinion and the Chief Executive Officer of Affinion International with the acquisition of Webloyalty.com on January 14, 2011. Mr. Fernandes is a party to an employment agreement that provides an annual base salary level of $425,000 and a target annual incentive bonus for fiscal year 2011 equal to 125% of Mr. Fernandes' annual base salary. Mr. Fernandes' target annual incentive bonus for fiscal year 2011 is consistent with the target annual bonuses for our other executive officers (other than our Chief Executive Officer) given the expectation that Mr. Fernandes will have significant duties and responsibilities at the Company following the acquisition of Webloyalty.com on January 14, 2011. Under his employment agreement, Mr. Fernandes would be entitled to 200% of the sum of his annual base salary and target bonus upon a termination of his employment by us without "cause" or by him for "good reason", and 100% of the sum of his base salary upon his termination due to death or disability. Compensation Philosophy and Objectives The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of our specific annual, long-term and strategic goals, and which aligns executives' interests with those of our stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. The Committee evaluates both performance and compensation to ensure that we maintain our ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives at companies with, among other things as discussed in greater detail below, similarly sized revenues. To that end, the Committee believes executive compensation packages provided by us to our executives, including to our named executive officers, should include both cash and share-based compensation that reward performance as measured against established goals. Role of Executive Officers in Compensation Decisions The chief executive officer annually reviews the performance of each of our named executive officers (other than the chief executive officer, whose performance is reviewed by the Committee). The conclusions reached and recommendations based on these reviews, including with respect to salary adjustments and annual incentive award target and actual payout amounts, are presented to the Committee, which has the discretion to modify any recommended adjustments or awards to executives. The Committee has final approval over all compensation decisions for our named executive officers and approves recommendations regarding cash and equity awards to all of our officers. 74

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Setting Executive Compensation Based on the foregoing objectives, the Committee has structured our annual and long-term incentive cash and share-based executive compensation programs to motivate our executives to achieve the business goals set by us and to reward the executives for achieving these goals. In evaluating executive compensation, our Compensation Committee considers a variety of factors including market demands, internal equity and external surveys which provide th insight into and guidance on the pay practices of similar companies. As a general rule, we target total cash compensation (TCC) at the 50 percentile of companies with similarly sized revenues. While survey data provides us with a helpful guideline, we do not make compensation decisions based on any single factor. We have found the Total Compensation Measurement Survey, produced by Hewitt Associates, to provide helpful insight, as it reflects input from over 350 companies representing 21,000 executives, in General Industry, Service and Retail with revenues ranging from $150 million to $214 billion. As we recruit talent from various sectors, the broad view of this survey is valuable. While the survey provides an overall list of participating companies, the data that is provided to us for comparison purposes is based on a sub-group of companies with revenues similar to ours. The identity of these companies is not provided to us. In sum, while we are familiar with the broad range of companies that participate in the survey, we are not provided with, and therefore have not listed, the names of the companies that comprise our comparison group. Executive Compensation Components The principal components of compensation for our named executive officers are: base salary; performance-based incentive compensation; long-term equity incentive compensation; retirement and other benefits; and perquisites.

Base Salary We provide our named executive officers and other employees with base salary to compensate them for services rendered during the fiscal year. Base salary ranges for named executive officers are determined for each executive based on his or her position and scope of responsibility by using comparative market data. The initial base salary for our named executive officers is established in their employment agreements. Salary levels are reviewed annually as part of our performance review process as well as upon a promotion or other material change in job responsibility. Merit based increases to salaries of the executives, including our named executive officers, are based on the Committee's assessment of the individual's performance. In reviewing base salaries of our executives, the Committee primarily considers: scope and/or changes in individual responsibility; internal analysis of the executive's compensation, both individually and relative to other officers; and individual performance of the executive.

The Committee reviews these criteria collectively but does not assign a weight to any criterion when setting base salaries. Each base salary adjustment is made by the Committee subjectively based upon the foregoing. For 2010, in light of the economic environment, the Committee elected to maintain the 2009 annual base salary levels of the following named executive officers: Mr. Siegel at $350,000; Mr. Rooney at $346,466 and Mr. Upshaw at $325,000. Based on extensive experience in the financial services sector, Mr. Wirshba's annual base salary level for 2010 was $425,000. Effective as of October 17, 2010, the Committee approved an increase in Mr. Lipman's annual base salary to $700,000. Effective as of January 1, 2011, Mr. Siegel's and Mr. Upshaw's annual base salary levels were increased to $400,000, and $375,000, respectively. The Committee determined to increase Mr. Lipman's, Mr. Siegel's and Mr. Upshaw's 75

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annual base salaries in connection with the acquisition of Webloyalty and the expansion of duties and responsibilities of the combined entities. Performance-Based Incentive Compensation Our annual incentive plan is an annual cash incentive program with payments determined based on performance against measurable annual financial goals. If the applicable performance goals are achieved, the payment of bonuses at target under our annual incentive plan, together with annual base salary, is th designed to deliver annual cash compensation to our named executive officers on average at the 50 percentile of the cash compensation of executives in similarly sized organizations. The annual incentive plan is intended to focus the entire organization on meeting or exceeding an Adjusted EBITDA performance goal that is set during the early part of each year and approved by the Committee, while also providing significant opportunity to reward individual contributions. The Committee uses Adjusted EBITDA as the performance goal because it is a critical metric used by management to direct and measure our business performance. We believe that Adjusted EBITDA measures are clearly understood by both our employees and stockholders, and that achievement of the stated goals is a key component in the creation of long-term value for our stockholders. Except as may be determined by the Committee, in its sole discretion, no bonuses are payable under the annual incentive plan if the Adjusted EBITDA performance goal established by the Committee for that year is not achieved. For 2010, the Committee established an Adjusted EBITDA performance goal of $312.5 million. Reported actual Adjusted EBITDA was $318.5 million. As of now, performance goals for 2011 have not yet been finalized. For each named executive officer, as well as for each eligible employee, the actual bonus payable for a particular year under the annual incentive plan is bifurcated into a performance-based element and a discretionary element, neither of which is payable if the performance-based element is not achieved unless approved by the Committee. The performance-based element is based on achieving and exceeding the Adjusted EBITDA performance goal (a precondition to the payment of the bonus) and the discretionary element is based on the Committee's assessment of the individual employee's performance (weighted at 100%). In assessing the individual performance of our named executive officers, the Committee, in its discretion, considers the recommendations of our chief executive officer (except in determining the chief executive officer's own bonus) and the following list of factors (the list of factors is not exclusive and no particular weight is assigned to any factor used) and makes its determinations as of the date the bonus is payable: achievement of internal financial and operating targets, including free cash flow and customer growth; improvement of performance and customer satisfaction with our services; improvement of management and organizational capabilities and implementation of long-term strategic plans. The target bonus percentage (which in the aggregate applies to the discretionary and performance-based elements of the annual incentive bonus, each of which is weighted equally) for our named executive officers is established in their employment agreements. For 2010, all of the named executive officers except for Mr. Lipman have target annual incentive bonuses equal to 100% of their respective annual base salaries, consistent with their target annual incentive bonuses for 2009. Because the Committee believes that a relatively greater proportion of the chief executive officer's annual compensation should be subject to the achievement of the performance goals, Mr. Lipman's target annual incentive bonus for fiscal year 2010 is equal to 150% of his annual base salary. The Committee retains the right to pay bonuses to the named executive officers and other employees that are in addition to, or in lieu of, the bonuses described in their employment agreements, which bonuses may be based on company or individual performance goals not reflected in our annual incentive plan or purely discretionary. For fiscal year 2011, as a result of the acquisition of Webloyalty and the expansion of duties and responsibilities of the combined entities, Mr. Lipman's, Mr. Siegel's and Mr. Upshaw's target annual incentive bonuses have been increased to 175%, 125% and 125% of their respective annual base salaries. The Committee considered a number of factors to determine if the 2010 bonus goals were achieved, including cash flow and investments in the business through marketing and commission expenditures, product and servicing costs, acquisitions and capital expenditures. After consideration of a number of factors, the Committee decided to fund a discretionary pool at a 100% level for our U.S. based business and a 65% level for Affinion International because Affinion International did not attain the divisional goals. Such pool will be allocated based solely upon individual results and the individual's impact on the business. With the exception of bonuses for Mr. Lipman and Mr. Siegel discussed below, determination of individual payments has yet to be determined, and will be based upon individual performance and contributions The discretionary element of the annual bonus is reported in column (d) of the Summary Compensation Table and the performance-based annual bonus is reported in column (g) of the Summary Compensation Table. For 2010, no amounts were reported in column (g) of the Summary Compensation Table due to the Committee decision to fund only a discretionary pool that was not based on performance. On December 17, 2010, the Committee approved the grant of annual bonuses to Mr. Lipman and Mr. Siegel equal to $1,200,000 and $500,000, respectively as a result of the acquisition of 76

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Webloyalty and the expansion of duties and responsibilities of the combined entities. Mr. Siegel also received a one-time $25,000 bonus in 2010 as a result of his services during the year above and beyond the normal scope of his duties and responsibilities. The Committee also determined in February 2011 to provide Mr. Siegel with a $100,000 bonus as a result of his services in connection with various transactions during the past several months. So as to attract Mr. Wirshba to commence employment with the Company, Mr. Wirshba was paid a one-time sign-on bonus of $650,000, which is subject to repayment if Mr. Wirshba terminates his employment with the Company without Good Reason, or is terminated for Cause, prior to December 1, 2012. In order to ensure successful integration, Mr. Upshaw is eligible to receive a one-time bonus of $325,000 on the second anniversary of the Webloyalty merger (i.e., January 14, 2013) subject to the successful integration of the businesses of Webloyalty and the Company. Long-Term Equity Incentive Compensation 2007 Stock Award Plan On November 7, 2007, the board of directors of Holdings adopted its 2007 Stock Award Plan (the "2007 Plan"), under which our employees, directors and other service providers are eligible to receive awards of Holdings common stock. The rationale for the plan was to provide a means through which Holdings and its affiliates may attract and retain key personnel and to provide a means for directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of Holdings and its affiliates to acquire and maintain an equity interest in Holdings, or be paid incentive compensation, which may (but need not) be measured by reference to Holdings' stock price. Upon adoption of the 2007 Stock Award Plan, no additional grants may be made under Holdings' 2005 Stock Incentive Plan (the "2005 Plan"). The Committee has not adopted a policy of regularly timed annual grants of equity under the 2007 Plan. Pursuant to Mr. Wirshba's employment agreement, Holdings has agreed to grant Mr. Wirshba a stock option to purchase 400,000 shares of Holdings' common stock. This grant will occur in calendar year 2011 on or about the date of Holdings' valuation of its common stock and shall have an exercise price per share equal to the fair market value per share of common stock on the date of grant. Mr. Wirshba will vest into the option ratably on each of the first four anniversaries of the date of grant, and the option will be subject to the terms of the 2007 Plan. On January 13, 2010, the Committee approved the Amended and Restated 2010 Retention Award Program, or the RAP, which provides for awards of restricted stock units ("RSUs") under the 2007 Plan. The Committee determined that it is in our company's best interests to foster retention of approximately 110 key employees by awarding RSUs under the RAP with an aggregate cash election dollar value of approximately $10 million, which RSUs are subject to time based vesting conditions that run through approximately the first quarter of 2012. Generally, the number of RSUs awarded to each participant is equal to the quotient of (i) the aggregate cash election dollar value of RSUs that will be awarded to such participant (which we refer to as the Dollar Award Value) multiplied by 1.2, divided by (ii) $12.63 (i.e., the value per share of Common Stock as of December 31, 2009). The aggregate value of RSUs awarded to each of Messrs. Lipman, Siegel, Upshaw, and Rooney (after multiplying the respective Dollar Award Values by 1.2) is: $1,080,000, $720,000, $540,000, $540,000, and $456,000, respectively, and $947,250 for Mr. Wirshba (after multiplying the respective Dollar Award Value by 1.109). With respect to our named executive officers other than Mr. Wirshba, the Committee initially intended to settle the RSUs under the RAP in shares of Common Stock, however, the amended and restated RAP provides for a feature allowing participants to elect to receive cash in lieu of shares of Common Stock upon any of the four semi-annual vesting dates for such RSUs in an amount equal to one-fourth of the Dollar Award Value. One-third of Mr. Wirshba's RSUs under the RAP are scheduled to vest on each of the first three anniversaries of the grant date. In connection with the recognition of certain dividends to our stockholders and other equity holders in February 2011, certain optionholders received a cash payment in respect of their stock options and certain optionholders had the exercise prices of their stock options reduced. The determination of who received the cash payment and who received the exercise price adjustment were based on the exercise prices of the stock options in effect prior to the dividend. Retirement Benefits Our named executive officers are eligible to participate in our Employee Savings Plan. This plan is a tax-qualified retirement savings plan pursuant to which all U.S. based employees or U.S. expatriates are able to contribute on a before-tax basis the lesser of up to 25% of their annual salary or the limit prescribed by the Internal Revenue Service. We match 100% of the first 4% of each employee's pay that is contributed to the Employee Savings Plan. All contributions to the Employee Savings Plan as well as any matching contributions are fully vested upon contribution. 77

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Nonqualified Deferred Compensation Plan We terminated our Deferred Compensation Plan as of May 1, 2009 due to limited participation by employees and the mounting costs associated with its maintenance. Final distributions from the plan were made to all participants on or about May 31, 2010. The Deferred Compensation Plan is discussed in further detail under the heading " Nonqualified Deferred Compensation." Perquisites We provide named executive officers with perquisites that we and the Committee believe are reasonable and consistent with our overall compensation program to better enable us to attract and retain superior employees for key positions. The named executive officers are entitled to a car allowance. Mr. Upshaw traditionally was entitled to relocation, tax equalization, tax preparation, expatriate premiums and other benefits afforded Mr. Upshaw in connection with his international service. Mr. Upshaw has repatriated to the United States as of December 15, 2009, and accordingly, relocation, tax equalization, tax preparation, expatriate premiums and other benefits afforded Mr. Upshaw in connection with his international service will not be provided to him prospectively, except with respect to prior years. In order to attract Mr. Wirshba, the Company agreed to reimburse Mr. Wirshba for his temporary housing (including any taxes payable thereon) through December 31, 2012, subject to his continued employment with the Company through such date. The Committee periodically reviews the levels of perquisites provided to our named executive officers. Attributed costs of the perquisites described above for the named executive officers for fiscal years 2008, 2009 and 2010 are included in column (i) of the "Summary Compensation Table." Severance Payments Employment agreements are currently in effect with Messrs. Lipman, Siegel, Upshaw, Rooney and Wirshba. These employment agreements provide for severance payments in certain circumstances. The employment agreements are designed to promote stability and continuity of senior management. As noted above, Mr. Fernandes is also a party to an employment agreement. In the event the employment of any of Messrs. Lipman, Siegel, Upshaw, Rooney or Wirshba is terminated by us without "cause" (including as a result of our nonrenewal of their respective employment agreement) or they terminate their respective employment with us for "good reason," the terminating executive will be entitled under the severance provisions of his employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as periodic payments in the aggregate equal to: (i) in the case of Mr. Lipman, 200% of the sum of his annual base salary and target bonus, and (ii) in the case of either of Messrs. Siegel, Upshaw, Rooney and Wirshba, 100% of the sum of their respective annual base salary and target bonus. If employment of any of Messrs. Lipman, Siegel, Upshaw, Rooney or Wirshba terminates due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. Definitions referenced above can be found under the subheading "Employment Agreements" following the Summary Compensation Table. Information regarding applicable payments under such agreements for the named executive officers is provided under the heading "Potential Payments upon Termination or Change of Control." Tax and Accounting Implications Deductibility of Executive Compensation/Internal Revenue Code Section 162(m) Because we do not have a class of equity securities that is required to be registered under the Securities Exchange Act of 1934, as amended, we are not subject to Internal Revenue Code Section 162(m). Accounting for Share-Based Compensation The Company accounts for share-based payments under the 2005 Plan and the 2007 Plan in accordance with and to the extent required by FASB Accounting Standards Codification Topic 718, Compensation-Stock Compensation. 78

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COMPENSATION COMMITTEE REPORT Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this Report. THE COMPENSATION COMMITTEE Marc E. Becker, Chairman Eric L. Press Anton J. Levy COMPANY RISK ASSESSMENT Based on our assessment, we believe that our compensation and benefit programs have been appropriately designed to attract and retain talent and properly incent employees. Although our programs are generally designed to pay-for-performance and to provide incentive-based compensation, the programs contain various mitigating factors to ensure our employees, including our named executive officers, are not encouraged to take unnecessary risks in managing our business. These factors include: the multiple elements of our compensation packages, including base salary, annual bonus programs and, for many of our professional level employees, equity awards that vest over multiple years and that are intended to motivate employees to take a long-term view of our business; the structure of our annual cash bonus program, which is based on the collective achievement of numerous factors including cash flow, EBITDA and individual performance against functional goals, minimizes the risk of employees placing undue emphasis on any particular performance metric at the expense of other aspects of our business; Oversight of programs by the committees of the Board, including the Compensation Committee; and A sound mixture of programs that provide focus on both short and long term goals. SUMMARY COMPENSATION TABLE The table below summarizes the total compensation paid to or earned by each of our 2010 named executive officers for the fiscal years ended December 31, 2010, 2009 and 2008, to the extent that each of the 2010 named executive officers listed below was a named executive officer for such year(s).
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)

Name and Principal Position Nathaniel J. Lipman Chief Executive Officer & Chairman of the Board Todd H. Siegel Executive Vice President and Chief Financial Officer Robert G. Rooney Executive Vice President and Chief Operating Officer (6) Steven E. Upshaw President and Chief Executive Officer, Affinion International (8) Lloyd M. Wirshba President and Chief Executive Officer, North America

Year Salary ($) 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010

Bonus ($)(1)

Stock Awards ($)(2)

Option Awards ($)(2) $0 $0 $0 $0 $944,000 $0 $0 $0 $0 $0 $1,416,000 $0 $0

Change in Pension Value and Non-Equity Nonqualified Incentive Plan Deferred All Other Compensation Compensation Compensation ($) Earnings ($) ($)(3) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $40,445 $44,992 $ 44,030 (5) $27,997 $31,606 $ 31,133 (7) $27,397 $31,606 $ 30,849 (9) $155,648 $574,066 $630,266 (12) $18,695
(4)

Total ($) $2,905,445 $ 631,723 $1,389,758 $1,622,997 $1,325,606 $ 573,651 $1,003,096 $ 378,072 $ 672,192 $1,020,106 $2,581,696 $1,062,177 $1,645,368

$585,000 $1,200,000 $1,080,000 $586,731 $0 $0 $591,529 $754,199 $0 $350,000 $525,000 $720,000 $350,000 $0 $0 $293,253 $249,265 $0 $346,466 $173,233 $456,000 $346,466 $0 $0 $346,847 $ 294,496 $0 $324,458 $0 $540,000 $319,800 $ 271,830 $0 $335,971 $ 95,940 $0 (10) (11) $29,423 $650,000 $947,250

(1)

For 2010, Mr. Lipman's target bonus was 150% of base salary. For 2010, the target bonus of each named executive officer other than Mr. Lipman was 100% of their respective annual base salary. With the exception of Mr. Wirshba's sign-on bonus of $650,000, and Mr. Siegel's and Mr. Lipman's discretionary bonuses as described below in this footnote, no amounts are reported in this column for 2010 because no annual bonuses were earned or paid in 2010. 79

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Mr. Siegel also received a one-time $25,000 bonus in 2010 as a result of his services during the year above and beyond the normal scope of his duties and responsibilities. On December 17, 2010, the Committee approved the grant of annual bonuses to Mr. Lipman and Mr. Siegel equal to $1,200,000 and $500,000, respectively in contemplation of the anticipated acquisition of Webloyalty and the expansion of duties and responsibilities of the combined entities. In connection with the execution of Mr. Rooney's severance agreement dated January 30, 2011, Mr. Rooney's 2010 bonus was determined to be paid in the amount of $173,233 (i.e., 50% of his Target amount). We have included this amount in the table to reflect that a portion of the termination payments, discussed below under the Potential Payments Upon Termination section, are in respect of his 2010 bonus. Mr. Upshaw's bonus was not determined as of the date of this report, and will be determined by the Committee in 2011. (2) (3) The amounts shown in columns (e) and (f) reflect, for each named executive officer, the aggregate grant date fair value of stock and option awards during fiscal year 2010, 2009 and 2008. The amounts shown in column (i) for 2010 reflect, for each named executive officer: 2010 matching contributions we made on behalf of the named executive officers to the Employee Savings Plan (which is more fully described under "Retirement Benefits" above) in the amount of $9,749 for Mr. Lipman, $9,692 for Mr. Siegel, $9,594 for Mr. Rooney, and $9,478 for Mr. Upshaw, and also certain annual perquisites disclosed in other footnotes to this Summary Compensation Table. Mr. Wirshba did not contribute, on a pre-tax basis, any of his salary, to the Employee Savings Plan for 2010. Also included in this column are the value of long term disability insurance premiums imputed to each named executive officer (each less than $500) and certain de minimis employee recognition awards (i.e., BRAVO awards) to Messrs. Siegel and Upshaw. Includes an automobile allowance for 2010 equal to $30,230. Includes an automobile allowance for 2010 equal to $17,340. Mr. Rooney's position was eliminated, effective January 30, 2011, as a result of the merger with Webloyalty. Includes an automobile allowance for 2010 equal to $17,340. Mr. Upshaw's served as President of Affinion and Chief Executive Officer, Affinion International Limited until January 14, 2011 after which time he serves as President Global Operations. Includes an automobile allowance for 2010 equal to $17,100. In addition to the amounts described in footnote (3) above, this amount includes (i) relocation expenses of $4,406, (ii) U.S. tax equalization payment of $1,221, (iii) payment of UK taxes of $123,699, and (iv) tax advice/preparation expenses of $500.

(4) (5) (6) (7) (8) (9)

(10) The amount reported for Mr. Wirshba reflects the base salary paid for the portion of 2010 that Mr. Wirshba worked for the Company. Mr. Wirshba's rate of annual base salary for 2010 was $425,000. (11) Mr. Wirshba was paid a one-time sign-on bonus of $650,000 pursuant to his employment agreement. The sign-on bonus is subject to repayment by Mr. Wirshba if his employment terminates without Good Reason or for Cause prior to December 1, 2012. (12) Includes an automobile allowance for 2010 equal to $1,445. Includes temporary housing expenses for 2010 of $17,250. Employment Agreements The following paragraphs summarize the material terms of the employment agreements of our named executive officers who are currently employed by us. The severance provisions of these agreements are summarized under the heading "Potential Payments upon Termination or Change of Control." Nathaniel J. Lipman. Effective as of November 9, 2007, we entered into an employment agreement with Mr. Lipman pursuant to which he serves as our Chairman of the Board, President and Chief Executive Officer. Effective January 15, 2010, Steven E. Upshaw was promoted to President of Affinion, and Mr. Lipman resigned such position; Mr. Lipman remains our Chairman and Chief Executive Officer. The initial term of the employment agreement was from November 9, 2007 through October 17, 2010. After the initial term, the agreement is subject to automatic one-year renewals unless either party provides at least 90 days' prior written notice to the other party of its intent not to renew the agreement. Effective October 1, 2007, Mr. Lipman's annual base salary was increased to $585,000, subject to annual review for potential increases. Effective October 17, 2010, Mr. Lipman's annual base salary was increased to $700,000. For 2010, Mr. Lipman was eligible for an annual target bonus of 150% of his base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. For 2011, Mr. Lipman's target annual bonus is 175% of his base salary. 80

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Todd H. Siegel. Effective as of November 9, 2007, we entered into an employment agreement with Mr. Siegel pursuant to which he served as an Executive Vice President and our General Counsel. Mr. Siegel was appointed as the Company's Chief Financial Officer as of November 24, 2008. Effective February 17, 2009, Mr. Siegel resigned as General Counsel of the Company; Mr. Siegel remains an Executive Vice President and our Chief Financial Officer. The initial term of the agreement was November 9, 2007 through June 1, 2010. After the initial term, the agreement is subject to automatic one-year renewals unless either party provides at least 90 days' prior written notice to the other party of its intent not to renew the agreement. Although the agreement reflects an annual base salary of $275,000, Mr. Siegel's annual base salary was increased to $284,000 on February 26, 2008 pursuant to a compensation committee resolution. Mr. Siegel's annual base salary was further increased to $350,000 in connection with his promotion to Chief Financial Officer. Mr. Siegel is also eligible for an annual target bonus of 100% of his base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. For 2011, Mr. Siegel's annual base salary has been increased to $400,000 and his annual target bonus was increased to 125% of his annual base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. Robert G. Rooney. Effective as of November 9, 2007, we entered into an employment agreement with Mr. Rooney pursuant to which he serves as an Executive Vice President and our Chief Operating Officer. The initial term of the agreement was from November 9, 2007 through June 15, 2010. After the initial term, the employment agreement is subject to automatic one-year renewals unless either party provides at least 90 days' prior written notice to the other party of its intent not to renew the agreement. Effective January 1, 2008, Mr. Rooney's base salary was increased to $346,466, which is subject to annual review for potential increases. Mr. Rooney is eligible to receive an annual target bonus of 100% of his base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. As indicated earlier, Mr. Rooney's position was eliminated as a result of the merger with Webloyalty during 2011. Steven E. Upshaw. On January 15, 2010, we entered into an employment agreement with Mr. Upshaw pursuant to which he served as President of Affinion and Chief Executive Officer of Affinion International Limited. This agreement superseded Mr. Upshaw's prior-existing employment agreement. The initial term of the employment agreement is from January 15, 2010 through January 15, 2013. After the initial term, the agreement is subject to automatic oneyear renewals unless either party provides at least 90 days' prior written notice to the other party of its intent not to renew the agreement. The agreement reflects Mr. Upshaw's base salary of $325,000, subject to annual review for potential increases. Mr. Upshaw is eligible to receive an annual target bonus of 100% of his base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. Mr. Upshaw served as President of Affinion (from January 13, 2010 until January 14, 2011), Chief Executive Officer of Affinion International, and President of Affinion International, from June 1, 2007 until January 14, 2011. After January 14, 2011, he serves as President Global Operations. For 2011, Mr. Upshaw's annual base salary has been increased to $375,000 and his annual target bonus was increased to 125% of his annual base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. Lloyd M. Wirshba. On December 1, 2010, we entered into an employment agreement with Mr. Wirshba pursuant to which he serves as President and Chief Executive Officer, North America. Mr. Wirshba replaced Mr. Thomas Rusin as President and Chief Executive Officer, North America. The initial term of the employment agreement is from December 1, 2010 until December 1, 2013. After the initial term, the agreement is subject to automatic one-year renewals unless either party provides at least 90 days' prior written notice to the other party of its intent not to renew the agreement. The agreement reflects an annual base salary of $425,000, subject to annual review for potential increases. Mr. Wirshba is eligible to receive an annual target bonus of 125% of his base salary, subject to the attainment of performance goals established by the Committee under our annual incentive plan. Restrictive Covenants. Each of the named executive officers is subject to restrictive covenants contained in their employment agreements, which are identical to covenants they are subject to in their capacity as shareholders under the Management Investor Rights Agreement, to the extent applicable. Each named executive officer is prohibited from soliciting our employees, customers, suppliers, and licensees for three (3) years following his or her termination of employment and prohibited from competing with us and our affiliates for two (2) years following termination of employment. Each named executive officer is also subject to post-termination nondisclosure obligations relating to confidential company information. 81

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GRANTS OF PLAN BASED AWARDS IN FISCAL YEAR 2010 The following table presents information regarding the equity awards granted to our named executive officers during fiscal year 2010.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (a) (b) (c) (d) (e) Estimated Future Payouts Under Equity Incentive Plan Awards (f) (g) (h) (i) All Other Stock Awards: Number of Shares of Stock or Units (#)(1) (j) (k) (l)

Name

Grant Date

Threshold ($)

Target ($)

Maximum ($)

Threshold (#)

Target (#)

Maximum (#)

All Other Option Awards: Number of Securities Underlying Options (#)

Exercise or Base Price of Option Awards ($/sh)

Grant Date Fair Value of Stock and Option Awards ($)

Nathaniel J. Lipman Todd H. Siegel Robert G. Rooney Steven E. Upshaw Lloyd M. Wirshba (1)

1/13/2010 1/13/2010 1/13/2010 1/13/2010 12/1/2010

85,511 57,007 36,105 42,756 75,000

$ 1,080,000 $ 720,000 $ 456,000 $ 540,000 $ 947,250

Awards discussed in column (i) are RSU awards granted in 2010 under the RAP. With respect to our named executive officers other than Mr. Wirshba, the Committee initially intended to settle the RSUs under the RAP in shares of Common Stock, however, the amended and restated RAP provides for a feature allowing participants to elect to receive cash in lieu of shares of Common Stock upon any of the four semi-annual vesting dates for such RSUs in an amount equal to one-fourth of the Dollar Award Value, with stock for Messrs. Lipman, Siegel, Rooney and Upshaw valued at a 20% premium, based on a grant date value of a share of Common Stock of $12.63. Mr. Wirshba's is valued at a 10.9% premium and is scheduled to vest with respect to one-third of the RSUs on each of the first three anniversaries of the grant date of the RAP award. 82

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OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END The following table presents information regarding the outstanding equity awards held by each named executive officer at the end of fiscal year 2010 (with each share amount and exercise price adjusted to reflect Holdings' stock split and the adjustment to the exercise price on account of the dividends paid in 2007).
Option Awards (a) (b) (c) (d) (e) (f) (g) Stock Awards (h) (i) (j) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested

Equity Incentive Plan Awards: Number Equity Incentive Plan Awards: Number Number of Securities Underlying Unexercised Options (#) Exercisable (1) 23,625 606,900 25,000 14,175 130,662 14,175 157,500 37,500 14,175 50,337 15,750 21,000 23,625 (Tranche A) Number of Securities Underlying Unexercised Options (#) Unexercisable (2) 7,875 75,000 4,725 4,725 112,500 4,750 5,250 7,875 of Securities Underlying Unexercised Unearned Options (#)(2) Number of Shares or Units of Stock That Have Not Vested (5) 64,134 42,756 27,079 32,068 75,000 of Unearned Shares, Units or Other Rights That Have Not Vested

Market Value of Shares or Units of Stock That Have Not Vested ($) 810,000 540,020 342,000 405,000 947,250

Name (4) Nathaniel J. Lipman

Option Exercise Price ($) (3) $ 13.02 $ 1.43 $ 1.43 $ 1.43 $ 15.25 $ 13.02 $ 1.43 $ 1.43 $ 1.43 $ 13.02 $ 1.43 $ 1.43 $ 1.43 $ 15.25 $ 13.02 $ 1.43 $ 1.43 $ 1.43 $ 1.43 $ 1.43 $ 1.43 $ 1.43 $ 1.43 $ 1.43

Option Expiration Date 11/30/2017 10/17/2015 10/17/2015 10/17/2015 02/06/2019 11/30/2017 10/17/2015 10/17/2015 10/17/2015 11/30/2017 10/17/2015 10/17/2015 10/17/2015 02/06/2019 11/30/2017 10/17/2015 10/17/2015 10/17/2015 11/16/2015 11/16/2015 11/16/2015 10/16/2016 10/16/2016 10/16/2016

Todd H. Siegel

(Tranche A)

Robert G. Rooney

(Tranche A)

Steven E. Upshaw

(Tranche A)

(Tranche A)

(Tranche A)

Lloyd M. Wirshba

303,450 303,450 65,331 65,331 78,750 78,750 25,169 25,168 7,875 7,875 (Tranche A) 13,125 13,125

(Tranche B) (Tranche C)

(Tranche B) (Tranche C)

(Tranche B) (Tranche C)

(Tranche B) (Tranche C) (Tranche B) (Tranche C) (Tranche B) (Tranche C)

(1)

All Tranche A, Tranche B and Tranche C options identified in this table are options to purchase shares of Holdings' common stock under Holdings' 2005 Plan. Except for the options granted to Mr. Upshaw on November 16, 2005 and October 16, 2006 all options granted to the named executive officers under Holdings' 2005 Plan were granted on October 17, 2005. Vested options will expire earlier than the date indicated in column (f) if the executive terminates his relationship with us prior to the expiration date. 83

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(2)

Twenty percent of the Tranche A options vest and become exercisable on each of the first five anniversaries of the grant date. In the event of a sale of Holdings, any unvested Tranche A options will vest on the 18-month anniversary of the sale or, if earlier (but following the sale), upon the executive's termination by us without cause, by the executive for good reason or as a result of the executive's death or disability. The Tranche B options vest on the eighth anniversary of the grant date, or, if earlier, the date on which a 20% or greater investor internal rate of return is realized. The Tranche C options vest on the eighth anniversary of the grant date or, if earlier, the date on which a 30% or greater investor internal rate of return is realized. Options not designated as either Tranche A, Tranche B or Tranche C, which were granted under the 2007 Plan, are scheduled to vest with respect to 25% of the shares subject to such option on each of the first four anniversary dates of the grant.

(3)

On January 30, 2007, the Committee reduced the exercise price of all Tranche A, Tranche B and Tranche C options from $10.00 per share to $3.00 per share as an equitable adjustment required by the 2005 Plan in connection with the extraordinary dividend on Holdings' common stock paid on January 31, 2007, which was further adjusted for Holdings' 2.1-for-1 stock split in September 2007 to $1.43 per share. Options granted after January 30, 2007 were unaffected. The exercise prices reported do not reflect reductions in the options' exercise prices to reflect calendar year 2011 distributions made to shareholders. Mr. Lipman's Tranche A options vest as described in footnote (2) but are subject to the further requirement that upon termination by us without cause, by Mr. Lipman for good reason or as a result of his death or disability, the options will vest as if he continued to be employed by us until the second anniversary of the date of such termination, but only to the extent Mr. Lipman complies with certain contractual restrictive covenants. Awards reported in column (g) reflect the RAP awards made during calendar year 2010. With respect to our named executive officers other than Mr. Wirshba, the Committee initially intended to settle the RSUs under the RAP in shares of Common Stock, however, the amended and restated RAP provides for a feature allowing participants to elect to receive cash in lieu of shares of Common Stock upon any of the four semi-annual vesting dates for such RSUs in an amount equal to one-fourth of the Dollar Award Value, with stock for Messrs. Lipman, Siegel, Rooney and Upshaw valued at a 20% premium, based on a grant date value of a share of Common Stock of $12.63. Mr. Wirshba's is valued at a 10.9% premium and is scheduled to vest with respect to one-third of the RSUs on each of the first three anniversaries of the grant date of the RAP award. The vesting dates for Messrs. Lipman, Siegel, Rooney and Upshaw are on or about (i) August 23, 2010, (ii) April 7, 2011, (iii) August 22, 2011 and (iv) April 6,th 2012; provided that the RAP award agreement provides that in respect of each such vesting date, the applicable award tranche will vest earlier on the 7 day following our applicable annual or quarterly report. Mr. Wirshba's is scheduled to vest with respect to one-third of his RSU's on each of the first three anniversaries of the grant date of the RAP award on each of (i) December 1, 2011, (ii) December 1, 2012 and (iii) December 1, 2013. 84

(4)

(5)

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On October 17, 2005, Holdings adopted its 2005 Plan. The 2005 Plan allows Holdings to grant nonqualified stock options, rights to purchase shares of Holdings common stock and awards of restricted shares of Holdings common stock to Holdings and its affiliates' directors, employees and consultants. The 2005 Plan is administered by the Committee, which has the power to grant awards under the 2005 Plan, select eligible persons to receive awards under the 2005 Plan, determine the specific terms and conditions of any award (including price and conditions of vesting), construe and interpret the provisions of the 2005 Plan, and generally make all other determinations and take other actions as may be necessary or advisable for the administration of the 2005 Plan. In the event of Holdings' change in control, Holdings may, but is not obligated to, purchase then-outstanding options for a per option amount equal to the amount per share received in respect of the shares sold in the change in control transaction less the option price multiplied by the number of shares subject to the option. Stock awards will have a purchase price as determined by Holdings' compensation committee and evidenced by an award agreement. Holdings may amend or terminate the 2005 Plan at any time, but no such action as it pertains to an existing award may materially impair the rights of an existing holder without the consent of the participant. Both time and performance-based vesting options have been awarded under the 2005 Plan. On November 7, 2007, the board of directors of Holdings adopted its 2007 Plan, under which our employees, directors and other service providers are eligible to receive awards of Holdings common stock. The rationale for the 2007 Plan was to provide a means through which Holdings and its affiliates may attract and retain key personnel and to provide a means for directors, officers, employees, consultants and advisors (and prospective directors, officers, employees, consultants and advisors) of Holdings and its affiliates to acquire and maintain an equity interest in Holdings, or be paid incentive compensation, which may (but need not) be measured by reference to Holdings' stock price. Upon adoption of the 2007 Plan, no additional grants may be made under Holdings' 2005 Plan. Holdings' board of directors authorized 10,000,000 shares of Holdings common stock for grants of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, and/or performance compensation awards under the 2007 Plan. Cash bonus awards may also be granted under the 2007 Plan. The 2007 Plan has a term of ten years and no further awards may be granted under the 2007 Plan after November 7, 2017. The Committee (or Holdings' board of directors acting as the Committee) administers the 2007 Plan and has the power to grant awards under the 2007 Plan, select eligible persons to receive awards under the 2007 Plan, determine the specific terms and conditions of any award (including price and conditions of vesting), construe and interpret the 2007 Plan, and generally make all other determinations and take other actions as may be necessary or advisable for the administration of the 2007 Plan. In the event of a change in control, the Committee may determine, in its sole discretion, that outstanding options and equity awards (other than performance compensation awards) issued under the 2007 Plan become fully vested and may vest performance compensation awards based on the level of attainment of the specified performance goals. The Committee may also cancel outstanding awards and pay the value of such awards to participants in connection with a change in control. OPTION EXERCISES AND STOCK VESTED No stock options were exercised by our named executive officers during 2010 and no named executive officer vested in shares of restricted stock during 2010. Accordingly, a corresponding table has been intentionally omitted. NONQUALIFIED DEFERRED COMPENSATION AS OF FISCAL YEAR END 2010 We terminated our Deferred Compensation Plan as of May 1, 2009. Prior to May 1, 2009, certain executives, including our named executive officers, were able to defer pursuant to our Deferred Compensation Plan up to 50% of their base salaries and/or up to 100% of their compensation earned under our annual incentive plan. Deferral elections were generally made by eligible executives in November of each year for amounts to be earned by such executives in the following year. Participating executives were permitted to select any combination of the deemed investment options offered by the plan. Participating executives' accounts are notionally credited with earnings or losses based on the earnings or losses of their selected investment vehicles. Participating executives are generally 100% vested in their elective contributions to the Deferred Compensation Plan. 85

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As of May 1, 2009, the plan was terminated due to limited participation by employees and the mounting costs associated with its maintenance. As a result of such termination, distribution of all amounts credited to accounts of plan participants as of May 1, 2009 will be accelerated and made to such participants within 90 days following May 31, 2010, unless due earlier pursuant to the existing terms of the plan. The following table summarizes the contributions, balances earnings and distributions of and with respect to non-qualified deferred compensation for each of our named executive officers for the fiscal year ended December 31, 2010.
Executive Contributions in 2010 ($) Registrant Contributions in 2010 ($) Aggregate Earnings in 2010 ($) Aggregate Withdrawals/ Distributions ($) Aggregate Balance at 12/31/10 ($)

Name

Nathaniel J. Lipman Todd H. Siegel Robert G. Rooney Steven E. Upshaw Lloyd M. Wirshba

$ $

0.00 0.00

$ $

7,148 3,429

$ $

314,344 281,287

$ $

0.00 0.00

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL The tables below reflect the amount of compensation that would be payable to each of our named executive officers in the event of the termination of such executive's employment as provided under the named executive officers' employment agreements in effect for 2010. The amount of compensation payable to each named executive officer upon termination for good reason, retirement, termination without cause, the named executive officer's disability or death or in the event of a change of control, is shown below. The amounts shown assume that such termination was effective as of December 31, 2010, and thus includes amounts earned through such time and are estimates of the amounts that would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive's separation from us. Outstanding unvested equity awards are generally not automatically accelerated upon a change of control. Payments Made Upon Termination, Generally Regardless of the manner in which a named executive officer's employment terminates, he or she is entitled to receive amounts earned during his or her term of employment. Such amounts include: non-equity incentive compensation earned during the fiscal year of termination; and amounts earned and contributed under our Employee Savings Plan and Deferred Compensation Plan.

Payments Made Upon Retirement In the event of the retirement of a named executive officer, in addition to the items identified above he or she will continue to be able to exercise vested options granted under Holdings' 2005 Plan and 2007 Plan for ninety (90) days following termination of employment (or such longer period as provided under the applicable plan documents and award agreements). Payments Made Upon Termination due to Death or Disability In the event of the death or disability of a named executive officer, in addition to the benefits listed under the headings "Payments Made Upon Termination, Generally" and "Payments Made Upon Retirement" above, the named executive officer will receive benefits under our disability plan or payments under our life insurance plan, as applicable. The tables below reflect that Messrs. Lipman, Siegel, Rooney, Upshaw, and Wirshba would have been entitled under their respective employment agreements to a lump sum payment equal to 100% of the respective executive's base salary upon the executive's termination of employment on account of his death or disability. Payments Made Upon Termination "Without Cause" or Termination for "Good Reason" Pursuant to the executives' employment agreements, if an executive's employment is terminated "without cause," or if the executive terminates his employment in certain circumstances defined in the agreement that constitute "good reason," or the executive's employment is terminated by us for cause or by reason of death or disability, the named executive officers 86

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will receive the benefits set forth under the heading "Payments Made Upon Termination, Generally" and in the following tables. "Good reason" generally means: (i) in Mr. Lipman's case, our failure to use commercially reasonable efforts to cause the executive to continue to be elected as a member of the Board; (ii) our material failure to fulfill our obligations under the executive's employment agreement, (iii) a material and adverse change to, or a material reduction of, the executive's duties and responsibilities, (iv) a reduction in the executive's annual base salary or target bonus (excluding any reduction related to a broader compensation reduction that is not limited to executive specifically and that is not more than 10% in the aggregate or any reduction to which the executive consents) or (v) the relocation of the executive's primary office to a location more than 35 miles from his current work location. We have a 30 day cure right following timely notice of any event constituting good reason from the executive. "Cause" generally means: the executive's (i) conviction of a felony or a crime of moral turpitude; (ii) conduct that constitutes fraud or embezzlement; (iii) willful misconduct or willful gross neglect; (iv) continued willful failure to substantially perform his duties; or (v) his material breach of his employment agreement. The executive has certain cure rights with respect to the acts set forth in (iv) and (v). The named executive officers are only entitled to receive severance payments so long as they comply with their restrictive covenants regarding nondisclosure of confidential information, non-solicitation of employees, non-competition, and proprietary rights, each during and for specified periods after employment. Payment of severance is conditioned on the named executive officer or his legal representative executing a separation agreement and general release of claims against us and our affiliates. Nathaniel J. Lipman In the event Mr. Lipman's employment is terminated by us without cause (including as a result of our nonrenewal of his employment agreement) or he terminates his employment with us for good reason, he will be entitled under the severance provisions of his employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as the payment in eight quarterly installments commencing on the date of termination of an amount equal to 200% of the aggregate amount of his annual base salary and target bonus. If Mr. Lipman's employment is terminated due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. In the event Mr. Lipman violates any of the restrictive covenants he will have no further right to receive any severance payments. The following table shows the potential payments upon termination of Mr. Lipman's employment on December 31, 2010 under the circumstances described above:
Termination Without Cause Termination for Good Reason

Executive Benefit and Payments Upon Separation

Voluntary Termination

Early Retirement

Normal Retirement

Disability

Death

Change of Control

Compensation: Annual Incentive Plan Cash Severance Long-Term Incentive Compensation: (1) Stock Options Benefits & Perquisites: Savings Plan Health and Welfare Benefits Life Insurance Proceeds (1)

X X X X X X

X X X X X X

X X X X X X

$ 2,100,000 $ 1,400,000 X X X X

$ 2,100,000 $ 1,400,000 X X X X

X $ 700,000 X X X X

X $ 700,000 X X X X

X X X X X X

Pursuant to the terms of his option agreement dated October 17, 2005, in the event of a sale of Holdings, all of Mr. Lipman's unvested Tranche A options will vest on the 18-month anniversary of the sale or, if earlier (but following the sale), upon his termination by us without cause, by Mr. Lipman for good reason or as a result of his death or disability. The value of the acceleration of vesting of Mr. Lipman's options in connection with such a sale is impossible to calculate. Mr. Lipman's option agreement also provides that upon his termination of employment by us without cause, by Mr. Lipman for good reason or as a result of his death or disability, his options will vest as if he continued to be employed by us until the second anniversary of his termination date, subject to his compliance with certain restrictive covenants. The value of the acceleration of vesting of Mr. Lipman's options in connection with any such termination is impossible to calculate. 87

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Todd H. Siegel In the event Mr. Siegel's employment is terminated by us without cause (including as a result of our non-renewal of the agreement) or he terminates his employment with us for good reason, he will be entitled under the severance provisions of the new employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as the payment in six quarterly installments commencing on the date of termination of an amount equal to 100% of the aggregate amount of his annual base salary and target bonus. If Mr. Siegel's employment is terminated due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. In the event Mr. Siegel violates any of the restrictive covenants he will have no further right to receive any severance payments. The following table shows the potential payments upon termination of Mr. Siegel's employment on December 31, 2010 under the circumstances described above:
Termination Without Cause Termination for Good Reason

Executive Benefit and Payments Upon Separation

Voluntary Termination

Early Retirement

Normal Retirement

Disability

Death

Change of Control

Compensation: Annual Incentive Plan Cash Severance Long-Term Incentive Compensation: (1) Stock Options Benefits & Perquisites: Savings Plan Health and Welfare Benefits Life Insurance Proceeds (1)

X X X X X X

X X X X X X

X X X X X X

$ $

350,000 350,000 X X X X

$ $

350,000 350,000 X X X X

X $ 350,000 X X X X

X $ 350,000 X X X X

X X X X X X

Pursuant to the terms of his option agreement dated October 17, 2005, in the event of a sale of Holdings, all of Mr. Siegel's unvested Tranche A options will vest on the 18-month anniversary of the sale or, if earlier (but following the sale), upon his termination by us without cause, by Mr. Siegel for good reason or as a result of his death or disability. The value of the acceleration of vesting of Mr. Siegel's options in connection with such a sale is impossible to calculate. Robert G. Rooney

In the event Mr. Rooney's employment is terminated by us without cause (including as a result of the non-renewal of his employment agreement) or he terminates his employment with us for good reason, he will be entitled under the severance provisions of the employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as the payment in six quarterly installments commencing on the date of termination of an amount equal to 100% of the aggregate amount of his annual base salary and target bonus. If Mr. Rooney's employment is terminated due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. In the event Mr. Rooney violates any of the restrictive covenants he will have no further right to receive any severance payments. Mr. Rooney's agreement was amended in January 2010 to provide Mr. Rooney eighteen (18) months (rather than sixty (60) days) following the date on which Mr. Rooney begins reporting to Mr. Upshaw in his capacity as President of Affinion to provide written notice that Mr. Rooney is terminating his employment for good reason. The following table shows the potential payments upon termination of Mr. Upshaw's employment on December 31, 2010:
Termination Without Cause Termination for Good Reason

Executive Benefit and Payments Upon Separation

Voluntary Termination

Early Retirement

Normal Retirement

Disability

Death

Change of Control

Compensation: Annual Incentive Plan Cash Severance Long-Term Incentive Compensation: (1) Stock Options Benefits & Perquisites: Savings Plan Health and Welfare Benefits Life Insurance Proceeds (1)

X X X X X X

X X X X X X

X X X X X X

$ $

346,466 346,466 X X X X

$ $

346,466 346,466 X X X X

X $ 346,466 X X X X

X $ 346,466 X X X X

X X X X X X

Pursuant to the terms of his option agreement dated October 17, 2005, in the event of a sale of Holdings, all of Mr. Rooney's unvested Tranche A options will vest on the 18-month anniversary of the sale or, if earlier (but following the sale), upon his termination by us without cause, by Mr. Rooney 88

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for good reason or as a result of his death or disability. The value of the acceleration of vesting of Mr. Rooney's options in connection with such a sale is impossible to calculate. Separation Pay: In connection with Mr. Rooney's termination, effective as of January 30, 2011, he executed a separation and release agreement, which provided that, in exchange for his release of claims against Holdings, the Company, and their affiliates, he is entitled to (i) $692,932 of severance pay (which equals the sum of the amounts reported in the chart immediately above under Termination for Good Reason), (ii) a cash payment in respect of his bonus for 2010 of $173,233 (representing 50% of his Target Annual Bonus), (iii) continued health care coverage through April 30, 2011, (iv) continuation of certain of his stock options (under the Holdings' 2005 Plan), including continuation for vesting purposes pursuant to the option grant agreement, until the tenth anniversary of the grant date, (v) a cash payment in respect of his RAP award equal to $107,186 (which represents the sum of (A) the cash value payable upon his election in respect of the second installment scheduled to vest under his RAP award on April 7, 2011, and (B) the aggregate dividend payable thereon resulting from distributions made to shareholders in 2011, and (vi) outplacement services. It was determined to provide Mr. Rooney's continued health care, continuation of stock options and the amendment to his RAP award in his separation and release agreement, as discussed above, in recognition of his years of service and contributions to the Company and its affiliates. Steven E. Upshaw In the event Mr. Upshaw's employment is terminated by us without cause (including as a result of the non-renewal of his employment agreement) or he terminates his employment with us for good reason, he will be entitled under the severance provisions of the employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as the payment in six quarterly installments commencing on the date of termination of an amount equal to 100% of the aggregate amount of his annual base salary and target bonus. If Mr. Upshaw's employment is terminated due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. In the event Mr. Upshaw violates any of the restrictive covenants he will have no further right to receive any severance payments. The following table shows the potential payments upon termination of Mr. Upshaw's employment on December 31, 2010:
Termination Without Cause $ $ 325,000 325,000 X X X X $ $ Termination for Good Reason 325,000 325,000 X X X X

Executive Benefit and Payments Upon Separation Compensation: Annual Incentive Plan Cash Severance Long-Term Incentive Compensation: Stock Options Benefits & Perquisites: Savings Plan Health and Welfare Benefits Life Insurance Proceeds
(1)

Voluntary Termination X X X X X X

Early Retirement X X X X X X

Normal Retirement X X X X X X

Disability X 325,000 X X X X

Death X 325,000 X X X X

Change of Control X X X X X X

(1)

Pursuant to the terms of his option agreement dated October 17, 2005, in the event of a sale of Holdings, all of Mr. Upshaw's unvested Tranche A options will vest on the 18-month anniversary of the sale or, if earlier (but following the sale), upon his termination by us without cause, by Mr. Upshaw for good reason or as a result of his death or disability. The value of the acceleration of vesting of Mr. Upshaw's options in connection with such a sale is impossible to calculate. Lloyd M. Wirshba

In the event Mr. Wirshba's employment is terminated by us without cause (including as a result of the non-renewal of his employment agreement) or he terminates his employment with us for good reason, he will be entitled under the severance provisions of the employment agreement to a lump sum payment of any unpaid annual base salary through the date of termination and any bonus earned but unpaid for any fiscal year ended prior to the year in which the date of termination occurs, as well as the payment in eight quarterly installments commencing on the date of termination of an amount equal to 100% of the aggregate amount of his annual base salary and target bonus. If Mr. Wirshba's employment is terminated due to death or disability, he will be entitled to a lump sum payment equal to 100% of his base salary. In the event Mr. Wirshba violates any of the restrictive covenants he will have no further right to receive any severance payments. 89

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The following table shows the potential payments upon termination of Mr. Wirshba's employment on December 31, 2010:
Termination Without Cause $ $ 531,250 $ 425,000 $ X X X X Termination for Good Reason 531,250 425,000 $ X X X X

Executive Benefit and Payments Upon Separation Compensation: Annual Incentive Plan Cash Severance Long-Term Incentive Compensation: Stock Options Benefits & Perquisites: Savings Plan Health and Welfare Benefits Life Insurance Proceeds

Voluntary Termination X X X X X X

Early Retirement X X X X X X

Normal Retirement X X X X X X

Disability X 425,000 $ X X X X

Death X 425,000 X X X X

Change of Control X X X X X X

DIRECTOR COMPENSATION We use a combination of cash and share-based incentive compensation to attract and retain qualified candidates to serve on the board of directors. In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties to us as well as the skill-level required by the members of our board of directors. The members of our board of directors also serve on the board of directors of Holdings for no additional compensation. Director Compensation Our non-employee directors receive annual compensation in the amount of $45,000 payable in equal quarterly installments, plus $2,000 for each regular or special meeting of our board of directors or board committee that they attend in person, plus an additional $1,000 for each regular or special meeting of our board of directors or board committee that they attend by teleconference. In addition, in 2010, Mr. Kenneth Vecchione received $15,000 for serving as the then chairman of the audit committee of the board of directors and Mr. Robert B. Hedges, Jr., Mr. Richard J. Srednicki and Mr. Peter W. Currie each received $7,500 for then serving on the audit committee of the board of directors. Directors who are our employees receive no compensation for their service as directors. Our directors are also eligible to participate in the 2007 Plan. We generally award non-employee directors 15,000 options when they join our board of directors. The chairperson of the audit committee receives an additional 7,500 options, and other non-employee directors who are not affiliated with Apollo and serve as members of the audit committee receive an additional 3,750 options. As previously disclosed in a current report on Form 8-K, on May 19, 2010, Mr. Hedges and Mr. Zinterhofer resigned as directors, and Mr. Hedges also resigned as a member of the audit committee. As previously disclosed in a current report on Form 8-K, on January 14, 2011, Mr. Vecchione and Mr. Currie resigned as directors. Director Compensation Table for Fiscal Year 2010 The table below summarizes the compensation paid by us and earned or accrued by non-employee directors for the fiscal year ended December 31, 2010.
(a) (b) (c) (d) (e) Change in Pension Value and Deferred Compensation Earnings ($) (f) (g)

Name (1)

Fees Earned or Paid in Cash ($)

Stock Awards ($)

Option Awards ($)(2)

All Other Compensation ($)

Total ($)

Marc E. Becker Robert B. Hedges, Jr. (3) Matthew H. Nord Stan Parker Eric L. Press Kenneth Vecchione Eric L. Zinterhofer (4) Richard J. Srednicki Peter W. Currie Jonathan E. Ellenthal

$ $ $ $ $ $ $ $ $ $

56,000 35,250 57,000 51,000 56,000 78,000 24,000 72,500 72,500 56,000

$ $ $ $ $ $ $ $ $ $

0 0 0 0 0 0 0 0 0 0

$ $ $ $ $ $ $ $ $ $ 90

0 0 0 0 0 0 0 0 0 119,100

$ $ $ $ $ $ $ $ $ $

0 0 0 0 0 0 0 0 0 0

$ $ $ $ $ $ $ $ $ $

0 0 0 0 0 0 0 0 0 0

$ $ $ $ $ $ $ $ $ $

56,000 35,250 57,000 51,000 56,000 78,000 24,000 72,500 72,500 175,100

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(1)

Mr. Lipman, our Chairman of the Board and Chief Executive Officer, is not included in this table as he is our employee and thus receives no compensation for his services as a director (except as described above). The compensation received by Mr. Lipman as our employee is shown in the Summary Compensation Table. In connection with Mr. Ellenthal's service as a director for 2010, he was awarded 15,000 fully vested options with an exercise price of $12.63. The dollar amount provided herein reflects the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2010 in accordance with FASB Accounting Standards Codification Topic 718, Compensation-Stock Compensation. As of December 31, 2010 each non-employee director had the following number of options outstanding, all of which were fully vested when granted: Marc E. Becker, 44,500; Stan Parker, 41,500; Eric L. Press, 43,000; Eric L. Zinterhofer, 41,500; Matthew H. Nord, 43,000; Kenneth Vecchione, 60,250; Robert B. Hedges, Jr., 52,375; Richard J. Srednicki, 34,000; Peter W. Currie, 34,000; and Jonathan E. Ellenthal, 15,000.

(2)

(3) (4)

Mr. Hedges' fees reflect his resignation as a director and a member of the audit committee on May 19, 2010. Mr. Zinterhofer's fees reflect his resignation as a director on May 19, 2010.

Compensation Committee Interlocks and Insider Participation During 2010, the members of our compensation committee consisted of Messrs. Becker and Press, both of whom are principals and stockholders of Apollo, our controlling stockholder. Neither director has ever been one of our officers or employees. During 2010 neither director had any relationship that requires disclosure in this Report as a transaction with a related person. During 2010, none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on such board of directors, none of our executive officers served as a director of another entity, one of whose executive officers served on such board of directors, and none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as one of such directors. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Holdings owns 100% of our common stock. The following table sets forth information regarding the beneficial ownership of Holdings' common stock as of February 15, 2011 by (i) each person known to beneficially own more than 5% of the common stock of Holdings, (ii) each of our named executive officers, (iii) each member of the Board of Directors of Holdings and (iv) all of our executive officers and members of the Board of Directors of Holdings as a group. The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. In connection with the Transactions, the Company issued to Cendant warrants that are currently exercisable into 4,437,170 shares of common stock of the Company. On March 1, 2011, the exercise price of the warrant was $10.38, which reflects an adjustment, made to the exercise price as a result of the dividends and distributions made on Holdings' common stock. The warrants are currently held by Apollo and Wyndham. In addition, Wyndham holds 1,339 shares of preferred stock of Holdings (which is after the redemption of 95,107 shares of preferred stock on January 31, 2007 for an aggregate redemption price of $106.0 million and the redemption of 28,554 shares of preferred stock in January and February 2011 for an aggregate redemption price of $44.5 million). Holdings expects to redeem the remaining 1,339 shares of preferred stock in March 2011. The preferred stock does not entitle or permit its holder to vote on any matter required or permitted to be voted upon by holders of common stock (except as required by applicable law), entitles its holder to receive dividends of 8.5% per annum (payable, at Holdings' option, either in cash or in kind) and ranks senior to shares of all other classes or series of stock with respect to rights upon a liquidation or sale of Holdings at a price of the then-current face amount, plus any accrued and unpaid dividends. The preferred stock is redeemable at Holdings' option at any time, subject to the applicable terms of our debt instruments and applicable laws. The preferred stock is redeemable at Holdings' option upon a change of control for a price equal to 101% of the then-current face amount, plus any accrued and unpaid dividends. Holdings is required to redeem the preferred stock (i) at the holder's option upon a change of control of Holdings at a price equal to the then-current face amount, plus any accrued and unpaid dividends, (ii) in part (A) upon certain dispositions of Holdings' equity securities held by Parent LLC, (B) if Parent LLC receives from Holdings, or its affiliates, cash or marketable securities in respect of the equity securities of Holdings it holds or (C) Holdings pays any cash dividends or makes other cash distributions on its equity securities, in each case at a price equal to the then91

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current face amount, plus any accrued and unpaid dividends and (iii) on the twelfth anniversary of the closing of the Transactions at a price equal to the thencurrent face amount, plus any accrued and unpaid dividends. The preferred stock is exchangeable, at the option of Holdings, for debt securities having economic terms no less favorable than the preferred stock. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
Amount and Nature of Beneficial Name of Beneficial Owner Ownership Percentage of Class

Apollo Management V, L.P. (b) General Atlantic LLC (c) Nathaniel J. Lipman (d) Robert G. Rooney (e) Todd H. Siegel (f) Steven E. Upshaw (g) Lloyd M. Wirshba (h) Richard J. Fernandes (i)(j) Marc E. Becker (i)(k) Matthew H. Nord (i)(l) Stan Parker (i)(k) Eric L. Press (m) Richard J. Srednicki (n) Jonathan Ellenthal Anton J. Levy (o) Scott D. Miller Alfred F. Kelly (p) Directors and executive officers as a group (16 persons) (*) (a) Less than one percent.

(a)

60,523,231 17,469,933 1,176,903 390,703 362,809 246,171 3,240,936 44,500 43,000 41,500 43,000 34,000 15,000 46,305 5,429,659

69.1% 20.6% 1.4% * * * 3.8% * * * * * * 6.3%

Represents 57,750,000 shares of common stock owned of record by Affinion Group Holdings, LLC ("Parent LLC"), and 2,773,231 shares of common stock issuable upon exercise of warrants owned of record by Apollo Investment Fund V, L.P. ("AIF V") and Affinion Group Holdings B, LLC ("Affinion B LLC"). Apollo Management V, L.P. ("Management V") serves as the sole manager of each of Parent LLC and Affinion B LLC, and as the manager of AIF V. AIF V Management, LLC ("AIF V LLC") is the general partner of Management V and Apollo Management, L.P. ("Apollo Management"), is the sole member and manager of AIF V LLC. Apollo Management GP, LLC ("Management GP") is the general partner of Apollo Management, Apollo Management Holdings, L.P. ("AMH") is the sole and managing member of Management GP, and Apollo Management Holdings GP, LLC ("AMH GP") is the general partner of AMH. Parent LLC and Affinion B LLC each serve as a fiduciary for Apollo German Partners V GmbH & Co. KG ("German V") with respect to German V's investments in our securities. Apollo Verwaltungs V GmbH ("Apollo German GP") is the general partner of German V and Apollo Advisors V, L.P. ("Advisors V") is the managing limited partner of German V. Advisors V also serves as the general partner of AIF V. Apollo Capital Management V, Inc. ("ACM V") is the general partner of Advisors V. Apollo Principal Holdings I, L.P. ("Apollo Principal") is the sole shareholder of ACM V, and Apollo Principal Holdings I GP, LLC ("Principal GP") is the general partner of Apollo Principal. Each of Parent LLC, Affinion B LLC, AIF V, Management V, AIF V LLC, Apollo Management, Management GP, AMH, AMH GP, German V, Apollo German GP, Advisors V, ACM V, Apollo Principal, and Principal GP (collectively, the "Apollo Entities") disclaim beneficial ownership of all shares of our common stock held of record or beneficially owned by any of the Apollo Entities, except to the extent of any pecuniary interest therein. The address of Parent LLC, Affinion B LLC, AIF V, Advisors V, ACM V, Apollo Principal and Principal GP is c/o Apollo Advisors V, L.P., One Manhattanville Road, Suite 201, Purchase, New York 10577. The address of Management V, AIF V LLC, Apollo Management, Management GP, AHM and AMH GP is c/o Apollo Management, L.P., 9 West 57th St., New York, New York 10019. The address of German V and Apollo German GP is Eschenheimer Anlage 1, 60316 Frankfurt, Germany. Leon Black, Joshua Harris and Marc Rowan are the managers and executive officers of Principal GP and AMH GP and as such effectively have the power to exercise voting and investment control with respect to the shares of our common stock held of record or beneficially owned by any of the Apollo Entities. Each of Messrs. Black, Harris and Rowan disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. The address of Messrs. Black, Harris and Rowan is c/o Apollo Management, L.P., 9 West 57th Street, New York, New York 10019.

(b)

Represents 17,469,933 shares of common stock owned of record by General Atlantic Partners 79, L.P. ("GAP 79"), GAP-W, LLC ("GAP-W"), GapStar, LLC ("GapStar"), GAPCO GmbH & Co., KG ("GAPCO KG"), GAP Coinvestment III, LLC ("GAPCO III") and GAP Coinvestment IV, LLC ("GAPCO IV"). General Atlantic LLC ("GA LLC") is the general partner of GAP 79 and General Atlantic GenPar, L.P. ("GA GenPar"). GA GenPar is the manager of GAP-W. GAPCO Management GmbH ("GAPCO Management") is the general partner of GAPCO KG. The executive officers of GapStar and the managing members of GAPCO III and GAPCO IV are certain Managing Directors of GA LLC. In addition, the Managing Directors of GA LLC control the voting and investment decisions made by GAPCO KG and GAPCO Management. Accordingly, the voting and disposition of the shares in the Company are coordinated among GAP 79, GAP-W, GapStar, GAPCO KG, GAPCO III and GAPCO IV. GAP 79, GAP-W, GapStar, GAPCO KG, GAPCO III, GAPCO IV, GA GenPar and GAPCO Management are a "group" within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as amended. Anton J. Levy is a Managing Director of GA LLC and a Managing Member of GAPCO III and GAPCO IV, and he disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.

The address of Mr. Levy and the General Atlantic group ("General Atlantic") (other than GAPCO KG and GAPCO Management) is c/o General Atlantic Service Company, LLC, 3 Pickwick Plaza, Greenwich, Connecticut 06830. The address of GAPCO KG and GAP Management is Koenigsallee 62, 40212 Dsseldorf Germany. (c) Includes 606,900 shares of common stock issuable upon the exercise of Tranche A options and 23,625 shares of common stock issuable upon the exercise of 2007 Plan options that are currently exercisable or exercisable within 60 days. Does not include 614,795 shares of common stock issuable upon the exercise of Tranche B and Tranche C and 2007 Plan options and 64,134 restricted stock units that remain subject to vesting. 92

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(d)

Includes 157,500 shares of common stock issuable upon the exercise of Tranche A options and 14,175 shares of common stock issuable upon the exercise of 2007 Plan options that are currently exercisable or exercisable within 60 days. Does not include 162,225 shares of common stock issuable upon the exercise of Tranche B and Tranche C and 2007 Plan options and 27,078 restricted stock units that remain subject to vesting. Includes 130,662 shares of common stock issuable upon the exercise of Tranche A options and 64,175 shares of common stock issuable upon the exercise of 2007 Plan options that are currently exercisable or exercisable within 60 days. Does not include 185,387 shares of common stock issuable upon the exercise of Tranche B and Tranche C and 2007 Plan options and 42,756 restricted stock units that remain subject to vesting. Includes 87,087 shares of common stock issuable upon the exercise of Tranche A options and 89,175 shares of common stock issuable upon the exercise of 2007 Plan options that are currently exercisable or exercisable within 60 days. Does not include 177,312 shares of common stock issuable upon the exercise of Tranche B and Tranche C and 2007 Plan options and 32,068 restricted stock units that remain subject to vesting. Does not include 75,000 restricted stock units that remain subject to vesting. Includes 274,736 shares of common stock issuable upon exercise of warrants. Messrs. Becker, Parker, Press and Nord are each principals and officers of certain affiliates of Apollo. Although each of Messrs. Becker, Parker, Press and Nord may be deemed to be the beneficial owner of shares beneficially owned by Apollo, each of them disclaims beneficial ownership of any such shares. Consists of 44,500 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Consists of 43,000 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Consists of 41,500 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Consists of 34,000 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Consists of 15,000 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Consists of 46,305 shares of common stock issuable upon the exercise of options which are currently exercisable or exercisable within 60 days. Includes 846,179 shares of common stock issuable upon the exercise of Tranche A options, 183,125 shares of common stock issuable upon the exercise of 2007 Plan options, 221,000 shares of common stock issuable upon the exercise of Board of Director option grants, 138,915 shares of common stock issuable upon the exercise of options issued under Webloyalty option plans and 274,736 shares of common stock that are subject to warrants that are currently exercisable or exercisable within 60 days. Does not include 1,005,249 shares of common stock issuable upon the exercise of Tranche A, Tranche B and Tranche C and 2007 Plan options and 177,141 restricted stock units that remain subject to vesting.

(e)

(f)

(g) (h) (i)

(j) (k) (l) (m) (n) (o) (p)

Securities Authorized for Issuance Under Equity Compensation Plan In connection with the closing of the Transactions on October 17, 2005, Holdings adopted the 2005 Plan and the 2005 Plan was approved by the stockholders of Holdings. The 2005 Plan authorizes the board of directors of Holdings to grant non-qualified, non-assignable stock options and rights to purchase shares of Holdings common stock to directors and employees of, and consultants to, Holdings and its subsidiaries, including us. No additional grants may be made under the 2005 Plan on or after November 7, 2007, the effective date of the 2007 Plan, as defined below. On November 7, 2007, the board of directors of Holdings adopted the 2007 Plan, under which our employees, directors and other service providers are eligible to receive awards of Holdings common stock. Holdings' board of directors authorized 10,000,000 shares of Holdings common stock for grants of nonqualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, and/or performance compensation awards under the 2007 Plan. Cash bonus awards may also be granted under the 2007 Plan. The 2007 Plan has a term of ten years and no further awards may be granted under the 2007 Plan after November 7, 2017. For additional discussion of our equity compensation, including the 2005 Plan and the 2007 Plan, see Note 12 to our audited consolidated financial statements included elsewhere herein. The table below summarizes the equity issuances under the 2005 Plan and the 2007 Plan as of December 31, 2010.
Number of securities remaining Number of securities to be issued upon exercise of outstanding options, warrants and rights Plan Category (a) Weighted-average exercise price of outstanding options, warrants and rights (b) available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (c)

Equity compensation plans approved by securityholders Equity compensation plans not approved by securityholders Total 93

3,884,034 1,770,775 5,654,809

$ $ $

1.62 14.29 5.59

8,229,225 8,229,225

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Item 13.

Certain Relationships and Related Transactions, and Director Independence

The Acquisition Purchase Agreement Overview. On July 26, 2005, we, along with our parent company, Holdings, entered into a purchase agreement with Cendant. Pursuant to the purchase agreement, on October 17, 2005, we purchased from Cendant all of the equity interests of AGLLC, and all of the share capital of AIH. The aggregate purchase price paid to Cendant was approximately $1.8 billion (consisting of cash and newly issued preferred stock of Holdings and after giving effect to certain fixed adjustments), subject to further adjustments as provided in the purchase agreement. In addition, Cendant received a warrant to purchase up to 7.5% of the common stock of Holdings. Following the Acquisition, Holdings owned 100% of our common stock. At such time, with respect to the capital stock of Holdings, (i) approximately 97% of its common stock then outstanding was owned by Parent LLC, (ii) approximately 3% of its common stock was owned by the management stockholders and (iii) 100% of its preferred stock was owned by Cendant. Indemnification. Cendant has agreed to indemnify us, Holdings and each of our and Holdings' affiliates, and each of our and Holdings' respective directors and officers, collectively, the indemnified parties, for breaches of representations, warranties and covenants made by Cendant, as well as for other specified matters, certain of which are described below. Holdings and we have agreed to indemnify Cendant, its affiliates and each of their respective directors and officers for breaches of representations, warranties and covenants made by each of us, as well as for certain other specified matters. Generally, all parties' indemnification obligations with respect to breaches of representations and warranties (except with respect to the matters described below) (i) are subject to a $100,000 occurrence threshold, (ii) are not effective until the aggregate amount of losses suffered by the indemnified party exceeds $15.0 million (and then only for the amount of losses exceeding $15.0 million) and (iii) are limited to $275.1 million of recovery. Generally, subject to certain exceptions of greater duration, the parties' indemnification obligations with respect to representations and warranties expired on April 15, 2007 with indemnification obligations related to covenants surviving until the applicable covenant has been fully performed. In connection with the purchase agreement, Cendant agreed to specific indemnification obligations with respect to the pending matters described below and other matters which have subsequently been resolved. As publicly announced, as part of a plan to split into four independent companies, Cendant has (i) distributed the equity interests it previously held in its hospitality services business ("Wyndham") and its real estate services business ("Realogy") to Cendant stockholders and (ii) sold its travel services business ("Travelport") to a third party. Cendant continues as a publicly traded company which owns the vehicle rental business ("Avis/Budget," together with Wyndham and Realogy, the "Cendant Entities"). Subject to certain exceptions, Wyndham and Realogy have agreed to share Cendant's contingent and other liabilities (including its indemnity obligations to the Company described above and other liabilities to the Company and Holdings in connection with the Transactions) in specified percentages. If any Cendant Entity defaults in its payment, when due, of any such liabilities, the remaining Cendant Entities are required to pay an equal portion of the amounts in default. Realogy was subsequently acquired by an affiliate of Apollo. Excluded Litigation. Cendant has agreed to fully indemnify the indemnified parties with respect to any pending or future litigation, arbitration, or other proceeding relating to the facts and circumstances of Fortis and the accounting irregularities in the former CUC International, Inc. announced on April 15, 1998. Certain Litigation and Compliance with Law Matters. Cendant has agreed to indemnify the indemnified parties up to specified amounts for, among others: (i) breaches of its representations and warranties with respect to legal proceedings that (x) occur after the date of the purchase agreement, (y) relate to facts and circumstances related to the business of AGLLC or AIH and (z) constitute a breach or violation of its compliance with law representations and warranties; and (ii) breaches of its representations and warranties with respect to compliance with laws to the extent related to the business of AGLLC or AIH. Cendant, Holdings and we have agreed that losses up to $15.0 million incurred with respect to these matters will be borne solely by us and losses in excess of $15.0 million will be shared by the parties in accordance with agreed upon allocations. We have the right at all times to control litigation related to shared losses and Cendant has consultation rights with respect to such litigation. 94

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We will retain all liability with respect to the November 2002 Class Action and will not be indemnified by Cendant for losses related thereto. Covenant Not to Compete. Cendant has agreed, subject to certain exceptions, not to compete with us for a seven-year period after the closing of the Transactions in the business of providing affinity-based membership programs, affinity-based insurance programs or benefit packages as enhancements to financial institution or customer accounts, in each case, on a fee or commission basis. We have agreed, subject to certain exceptions, not to compete with Cendant for a five-year period in the non-membership based, direct to consumer online travel distribution business in a manner which utilizes any content or booking or packaging engine of Cendant or its subsidiaries made available by Cendant or its subsidiaries to us and that is competitive to Cendant's online travel businesses. Non-Solicitation. Cendant has agreed, subject to certain exceptions, not to solicit any employee of ours, AGLLC, AIH or their respective subsidiaries for a period of three years after the closing of the Transactions. Ancillary Agreements to the Purchase Agreement In addition to the purchase agreement described above in connection with the Transactions, we and Holdings entered into the following agreements with Apollo, management, Realogy and Wyndham (in their individual capacities or as successors to Cendant) for which payments have been made in the last three years: Consulting Agreement On October 17, 2005, Apollo entered into a consulting agreement with us for the provision of certain structuring and advisory services, pursuant to which we paid Apollo a fee of $20.0 million for services rendered in connection with the Transactions and reimbursed Apollo for certain expenses incurred in rendering those services (the "2005 Consulting Agreement"). The 2005 Consulting Agreement has been amended and restated as described in "Related Party Transactions Since January 1, 2006Webloyalty Acquisition." Before the amendment and restatement of the 2005 Consulting Agreement became effective, the 2005 Consulting Agreement allowed Apollo and its affiliates to provide certain advisory services to us for a period of twelve years or until Apollo owned less than 5% of the beneficial economic interests of us, whichever is earlier. The 2005 Consulting Agreement was terminable earlier by mutual consent. We paid Apollo an annual fee of $2.0 million for these services commencing in 2006. If we had consummated a transaction involving a change of control or an initial public offering before the 2005 Consulting Agreement was terminated, then, in lieu of the annual consulting fee and subject to certain qualifications, Apollo would have been permitted to elect to receive a lump sum payment equal to the present value of all consulting fees payable through the end of the term of the 2005 Consulting Agreement. In addition, we were permitted to engage Apollo to provide certain services if we engaged in any merger, acquisition or similar transaction. If we engaged another party to provide these services, we may have been required to pay Apollo a transaction fee. We also agreed to indemnify Apollo and its affiliates and their directors, officers and representatives for potential losses relating to the services to be provided under the 2005 Consulting Agreement. Intercompany Agreements General. AGLLC, Affinion International (formerly known as CIMS) and their respective subsidiaries historically have had arrangements with Cendant and/or certain of its direct and indirect subsidiaries relating to, among other things, the marketing of certain membership programs and related data management, administration of loyalty and rewards programs, operational support (including travel agency support and software licensing), shared facilities and profit-sharing arrangements related to the marketing of certain insurance programs. On October 17, 2005, these arrangements were terminated and we have subsequently entered into new agreements with Cendant and/or certain subsidiaries that require the parties to provide services similar to those provided prior to the Transactions. See Note 14 to our consolidated financial statements included elsewhere herein. Marketing Agreements. On October 17, 2005, we entered into agreements relating to the marketing of AGLLC's membership programs with Cendant and/or its subsidiaries, including Budget Rent A Car System, Inc., Travel Link Group, Inc., Cendant Hotel Group, Inc., Trip Network, Inc., Orbitz, LLC and Resort Condominiums International, LLC. The agreements expired on December 31, 2010. These agreements permitted us to solicit customers of these parties for our membership programs through various direct marketing methods, which included mail, telemarketing and online solicitation methods. The payment terms of each marketing agreement differed, but generally involved the payment by us of either a fee for each call transferred under such marketing agreement, a bounty for each user that enrolled as a member of a membership 95

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program or a percentage of net membership revenues. The expense for such services was $3.6 million, $3.1 million and $2.0 million for the years ended December 31, 2008, 2009 and 2010, respectively. Other than non-material arrangements, these agreements provided that if a Cendant-party elected to terminate an agreement or an agreement terminated as a result of the parties' inability to agree on creative materials prior to December 31, 2010, then the applicable Cendant-party would be required to pay a termination fee based on the projected marketing revenues that would have been generated from such agreement had the marketing arrangement been in effect until December 31, 2010. The termination fee is paid as follows: the applicable Cendant-party is required to pay the equivalent of twenty-four quarterly installment payments, which termination fee is payable for each quarter occurring after the applicable termination date and prior to the end of calendar year 2010. In the event that in any quarter during the term of a marketing agreement, any Cendant-party failed to meet the minimum amount of marketing volume, failed to provide the specified amount of customer data or breached certain material obligations under any marketing agreement, then such Cendant-party would have to make a shortfall payment based on a calculation of the marketing revenues that would have been derived had the applicable Cendant-party met the specified threshold. Each shortfall payment is paid as follows: for each quarter in which a shortfall event occurs, the applicable Cendant Party is required to pay twenty-four quarterly installment payments (subject to certain adjustments). As a result of the failure by certain Cendant-parties to meet the specified minimum volume commitments under certain of the marketing agreements and the early termination of one of the marketing agreements by one of the Cendant-parties, we recognized revenues in the amount of $3.8 million, $23.2 million and $5.4 million for the years ended December 31, 2008, 2009 and 2010, respectively. Loyalty Agreements. On October 17, 2005, certain of our subsidiaries entered into agreements with Cendant and its subsidiaries relating to Cendant's loyalty and rewards programs to provide services to certain Cendant parties. The Cendant-party is generally charged one or more of the following fees relating to these services: an initial fee to implement a particular loyalty program; a management/administration fee; a redemption fee related to redeemed rewards and a booking fee related to bookings by loyalty program members. The revenue for such services attributable to agreements with Wyndham related entities was $10.4 million, $8.7 million and $4.7 million for the years ended December 31, 2008, 2009 and 2010, respectively. One such loyalty and rewards agreement expired on June 30, 2010. The other agreement expires on December 31, 2013, subject to automatic one-year renewal periods, unless a party elects not to renew the arrangement upon six months' prior written notice. In connection with these agreements, we formed Affinion Loyalty, LLC, a special purpose, bankruptcy remote subsidiary which is a wholly-owned subsidiary of Affinion Loyalty Group, Inc. (fka Trilegiant Loyalty Solutions, Inc. "ALG"). Pursuant to the loyalty agreements, ALG has provided a copy of the object code, source code and related documentation of certain of its intellectual property to Affinion Loyalty, LLC under a non-exclusive limited license. Affinion Loyalty, LLC entered into an escrow agreement relating to such intellectual property with Cendant and its affiliates in connection with the parties entering into the loyalty and reward agreements. Affinion Loyalty, LLC sublicenses such intellectual property to Cendant on a non-exclusive basis but will only provide access to such intellectual property either directly or indirectly through the escrow agent in the event that ALG (i) becomes bankrupt or insolvent, (ii) commits a material, uncured breach of a loyalty and reward agreement, or (iii) transfers or assigns its intellectual property in such a way as to prevent it from performing its obligations under any agreement relating to Cendant's loyalty and rewards programs. Upon access to the escrowed materials, Cendant will be able to use the escrowed materials for a limited term and for only those purposes for which ALG was using it to provide the services under the loyalty and reward agreements prior to the release of the escrowed materials to Cendant. On June 30, 2008, the Company entered into an Assignment and Assumption Agreement ("AAA") with Avis/Budget, Wyndham and Realogy. Prior to this transaction, these Cendant entities provided certain loyalty program-related benefits and services to credit card holders of a major financial institution and received a fee from this financial institution based on spending by the credit card holders. Under the AAA, the Company assumed all of the liabilities and obligations of the Avis/Budget, Wyndham and Realogy relating to the loyalty program, including the fulfillment of the then-outstanding loyalty program points obligations. In connection with the transaction, on the June 30, 2008 closing date, the Company received cash and receivables with a fair value substantially equivalent to the fair value of the fulfillment obligation relating to the loyalty program points outstanding as of the closing date. The receivables due and payable to the Company on June 30, 2009, 2010 and 2011 are $6.75 million, $6.5 million and $4.75 million, respectively. Other Operational Support Agreements. On October 17, 2005, Affinion International entered into an agreement pursuant to which Affinion International will continue to use RCI Europe as its exclusive provider of travel services for the benefit of Affinion International's members in the U.K., Germany, Switzerland, Austria, Italy, Belgium, Luxembourg, Ireland and the Netherlands. Pursuant to this agreement, RCI has a right of first refusal to offer travel services in other countries where Affinion International's members are located. Affinion International will indemnify RCI in the event its profit margin under this arrangement falls below 1.31%. The agreement expires ten years from October 17, 2005, subject to 96

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either party's right to terminate the agreement on or after the third anniversary of this date, upon one year's prior written notice or at any time in certain other specified circumstances (either in whole or in part). The expense for such services was $4.3 million for the year ended December 31, 2008. On August 22, 2008, the Company entered into an agreement to acquire certain assets and assume certain liabilities of RCI Europe. The acquisition closed during the fourth quarter of 2008 for nominal consideration. Under the agreement, the Company acquired all of the assets and assumed all of the liabilities of RCI Europe's travel services business that served the Company's customers in Europe. Following this acquisition, the Company now provides travel services directly to its customers. Shared Facilities Agreements. On October 17, 2005, certain of our subsidiaries entered into agreements to continue cost-sharing arrangements with Cendant and/or its subsidiaries relating to office space and customer contact centers. These agreements have expiration dates and financial terms that are generally consistent with the terms of the existing related inter-company arrangements. The revenue for such services attributable to Realogy and Wyndham related entities was $1.7 million for the year ended December 31, 2008. There was no revenue earned for such services for the years ended December 31, 2009 and 2010. The expense for such services was $0.4 million for the year ended December 31, 2008. There was no expense for such services for the years ended December 31, 2009 and 2010. Related Party Transactions Since January 1, 2006 During the second quarter of 2009, utilizing cash on hand and available funds under our senior secured credit facility (the balance of which was paid down prior to September 30, 2009), we, through Affinion Investments, LLC ("Affinion Investments"), a non-guarantor subsidiary of Affinion, purchased $64.0 million face amount of Holdings' outstanding indebtedness under the Holdings Loan Agreement from an affiliate of Apollo for $44.8 million. This indebtedness was redeemed by Holdings in October 2010. During 2006, Apollo acquired one of our vendors, SOURCECORP Incorporated, that provides document and information services to us. The fees incurred for these services for the years ended December 31, 2008, 2009 and 2010 was $1.4 million, $1.2 million and $1.1 million, respectively. On January 28, 2010, we, through Affinion Investments, entered into a subscription and capital commitment letter with Alclear Holdings, LLC ("Alclear"), pursuant to which we agreed to (i) become a member of Alclear and (ii) fund a capital contribution to Alclear in cash in the amount of $1.0 million. In order to make its capital contribution in Alclear, Affinion Investments received a capital contribution in cash in the amount of $1.0 million from Affinion. As a result of the capital contribution, we acquired an ownership interest of approximately 5% in Alclear. In February 2010, Alclear was selected as the winning bidder in the bankruptcy auction sale of the assets of Verified Identity Pass, Inc., an entity that provides biometric system solutions for airports, airlines, travel agents, and business travelers in the U.S. Alclear acquired the assets of Verified Identity Pass, Inc. in April 2010. We provide support services to Alclear and recognized revenue of $0.7 million for the year ended December 31, 2010. Alclear is controlled and partially funded by Caryn Seidman-Becker, who also serves as its Chief Executive Officer. Ms. Seidman-Becker is the spouse of Marc Becker. Mr. Becker is a director of Affinion and a partner of Apollo. Apollo beneficially owns approximately 69% of the common stock of Holdings. Webloyalty Acquisition On January 14, 2011, the Company and Holdings entered into, and consummated, an Agreement and Plan of Merger (the "Merger Agreement") that resulted in Affinion's indirect acquisition of all of the capital stock of Webloyalty and the conversion of Webloyalty securities into Holdings securities (the "Webloyalty Acquisition"). As a result of the Webloyalty Acquisition, (i) Parent LLC, which is an affiliate of Apollo, and Holdings' existing management investors collectively own approximately 70.4% of Holdings' issued and outstanding common stock; (ii) General Atlantic owns approximately 20.6% of Holdings' issued and outstanding common stock; and (iii) other holders of Webloyalty common stock collectively own approximately 9.0% of Holdings' issued and outstanding common stock. Holdings Stockholder Agreement On January 14, 2011, Holdings entered into the Stockholder Agreement (the "Holdings Stockholder Agreement") with (i) Parent LLC; (ii) General Atlantic; (iii) Richard Fernandes and the Fernandes Family Trust A dated June 25, 1999 (collectively, "Fernandes"); and (iv) Vincent D'Agostino and the D'Agostino Family Trust (collectively, "D'Agostino," and together with General Atlantic and Fernandes, the "Principal WL Stockholders"). 97

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The Holdings Stockholder Agreement permits certain of Holdings' stockholderscurrently Parent LLC and General Atlantic (each, a "Major Stockholder")to nominate one director, as well as additional directors for so long as such stockholders own certain percentages of the issued and outstanding shares of Holdings' common stock. The Chief Executive Officer of Holdings also will serve as a director, and the holders of a majority of the issued and outstanding shares of Holdings' common stock will nominate the remaining directors. Under the Holdings Stockholder Agreement, investment funds affiliated with Apollo and certain investment partnerships sponsored by General Atlantic currently have the right to nominate seven and three, respectively, of our eleven directors. In addition, the Holdings Stockholder Agreement provides for the nomination of Mr. Nathaniel J. Lipman as a director in his capacity as our Chief Executive Officer. At any time before a qualified public offering, the Holdings Stockholder Agreement requires each Major Stockholder, if it wishes to transfer shares of Holdings' common stock, to offer its shares of Holdings' common stock, first, to Holdings and, second, to the other Major Stockholders. In addition, if Holdings or any of its subsidiaries proposes to issue any equity securities or securities convertible into or exchangeable for equity securities (subject to customary exceptions), each Major Stockholder and each Principal WL Stockholder (for so long as each such Principal WL Stockholder, along with its affiliates, holds a number of shares of Holdings' common stock equal to 50% or more of the shares of Holdings' common stock issued to such Principal WL Stockholder in connection with the Webloyalty Acquisition) will have the right to purchase its pro rata share of the offering. Before a qualified public offering, if any party or parties to the Holdings Stockholder Agreement propose to transfer to a third-party more than 5% of the shares of Holdings' common stock beneficially owned by such transferring party, all other parties to the Holdings Stockholder Agreement will have the right to participate pro rata in the transfer. In addition, Parent LLC and, following the fifth anniversary of the date of the Holdings Stockholder Agreement, General Atlantic (for so long as it is a Major Stockholder) will each have the right to require the other holders of Holdings' common stock to (1) sell in a transaction comprising the sale of 80% or more of Holdings' common stock beneficially owned by Parent LLC or General Atlantic, as applicable, the same percentage of their respective shares of Holdings' common stock as Parent LLC or General Atlantic, as applicable, desires to sell or (2) vote in favor of a sale of all or substantially all of Holdings' and its subsidiaries' assets to unaffiliated third parties. Without each Major Stockholder's prior approval, Holdings will not, and will cause each of its subsidiaries not to, take or omit to take, as applicable, certain actions related to (1) non-pro rata redemptions, (2) changes to Holdings' organizational documents, (3) asset acquisitions or dispositions and (4) affiliate transactions. The Holdings Stockholder Agreement shall terminate with respect to any holder thereunder on the date such holder ceases to own any shares of Holdings' common stock. Holdings Securityholder Rights Agreement On January 14, 2011, Holdings, Parent LLC, General Atlantic and other holders party thereto entered into a Securityholder Rights Agreement (the "Holdings Securityholder Rights Agreement"), pursuant to which the parties thereto have certain rights with respect to Holdings' common stock, including tag-along rights and information rights. Parent LLC and General Atlantic also are provided with drag-along rights. The Holdings Securityholder Rights Agreement contains restrictions on the transfer of Holdings' common stock, other than Holdings' common stock held by Parent LLC or General Atlantic (whose Holdings' common stock is subject to the Holdings Stockholder Agreement's transfer restrictions). The Holdings Securityholder Rights Agreement will terminate automatically upon: (i) a change of control of Holdings; (ii) a vote to dissolve Holdings; or (ii) any event that reduces the number of stockholders to one. Amended and Restated Holdings Registration Rights Agreement On January 14, 2011, Holdings, Parent LLC and each of the Principal WL Stockholders entered into an Amended and Restated Registration Rights Agreement (the "Holdings Registration Rights Agreement"), pursuant to which Parent LLC and General Atlantic (on behalf of the holders of the majority of the eligible shares held by the Principal WL Stockholders) have certain demand registration rights with respect to Holdings' common stock. In addition, each party to the agreement may exercise "piggyback" rights, and certain holders may request an unlimited number of short-form registrations (including shelf registrations). Under the Holdings Registration Rights Agreement, Holdings agreed to assume the fees and expenses associated with registration, and the agreement also contains customary provisions with respect to registration procedures, underwritten offerings and indemnity and contribution rights and obligations. Amended and Restated Consulting Agreement On January 14, 2011, the Company and Apollo entered into an Amended and Restated Consulting Agreement (the "Amended and Restated Consulting Agreement"), pursuant to which Apollo and its affiliates will continue to provide the 98

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Company with certain advisory services on substantially the same terms as the 2005 Consulting Agreement described above, except that: (1) the annual fee paid by the Company will increase to $2,604,845 from $2,000,000, commencing January 1, 2012, with an additional one-time fee of $604,845 being paid promptly after January 14, 2011 in respect of calendar year 2011; and (2) the Amended and Restated Consulting Agreement contains clarifying language establishing that the Company will be the primary indemnitor if certain indemnified parties have a right to be indemnified by their affiliates. Transactions with Richard Fernandes On January 14, 2011, Mr. Richard J. Fernandes was appointed President of the Company and Holdings and as Chief Executive Officer of Affinion International Limited ("AIL"), a wholly owned subsidiary of the Company, effective as of January 14, 2011. Since September of 1998, Mr. Fernandes has served as Chief Executive Officer of Webloyalty. As a result of Mr. Fernandes' appointments, Mr. Steven E. Upshaw, then President of the Company and Chief Executive Officer of AIL, resigned from those positions immediately prior to the Webloyalty Acquisition. Simultaneously with his resignation, Mr. Upshaw was appointed President, Global Operations and Integration of the Company, effective as of the Webloyalty Acquisition. Mr. Fernandes entered into an employment agreement, dated as of January 14, 2011 (the "Fernandes Employment Agreement"), with the Company and Holdings, in connection with his appointment as President of the Company and Holdings and as Chief Executive Officer of AIL. The Fernandes Employment Agreement contemplates that Mr. Fernandes will serve in these positions for a period commencing on January 14, 2011 and ending on December 31, 2012 (the "Initial Term"), unless terminated earlier pursuant to the Fernandes Employment Agreement. After the Initial Term, the Fernandes Employment Agreement is subject to automatic one-year renewals unless either Mr. Fernandes or Holdings provides at least 90 days' prior written notice of its intent not to renew the agreement. Under the Fernandes Employment Agreement, Mr. Fernandes will receive a base salary of $425,000 and be eligible for an annual target bonus of 125% of his base salary; provided, that, performance objectives determined each year by Holdings are met. If Holdings terminates Mr. Fernandes' employment without cause, or if Mr. Fernandes terminates his employment for good reason, Mr. Fernandes will be entitled to a lump sum payment equal to his annual base salary through the date of termination plus the bonus earned for any fiscal year ended prior to the year in which the date of termination occurs. After the date of termination, Holdings will pay Mr. Fernandes, in eight quarterly installments, the sum of 200% of his annual base salary and his target bonus. On January 14, 2011, Mr. Fernandes, Parent LLC and Holdings entered into the Call Agreement (the "Fernandes Call Agreement"), which governs shares of Holdings' common stock and warrants to purchase Holdings' common stock issued to Mr. Fernandes in connection with the Webloyalty Acquisition. Also on January 14, 2011, Mr. Fernandes, Parent LLC and Holdings entered into the Fernandes Investor Rights Agreement (the "FIRA"), which governs shares of Holdings' common stock and options to purchase shares of Holdings' common stock acquired by Mr. Fernandes in his capacity as an employee, officer, director or consultant of Holdings. The Fernandes Call Agreement provides that, if Mr. Fernandes' employment with Holdings is terminated prior to an initial public offering of Holdings' common stock, then first Holdings, and then Parent LLC and General Atlantic Partners 79, L.P., shall have the right, but not the obligation (the "Call Option"), to purchase all of the shares of Holdings' common stock and/or warrants held by Mr. Fernandes that are subject to the Fernandes Call Agreement and any such shares and/or warrants held by a transferee of Mr. Fernandes. The aggregate purchase price shall be equal to (a) if the Call Option includes the shares and the warrants, the sum of the (1) product of (A) the fair market value per share multiplied by (B) the number of shares being acquired plus (2) the warrant valuation or (b) if the Call Option includes only shares, the product of (1) the fair market value per share multiplied by (2) the number of shares being acquired. Similarly, the FIRA provides, among other things, that Mr. Fernandes will be prohibited from selling, pledging, distributing or otherwise transferring any shares of Holdings' common stock (except to lineal descendents and other specified permitted transferees) without Holdings' consent. The FIRA also provides that if Mr. Fernandes' employment with Holdings terminates for any reason or if Mr. Fernandes experiences personal insolvency or bankruptcy, Holdings or one of its subsidiaries (or, if Holdings forgoes this right, Parent LLC) may repurchase Mr. Fernandes' shares of Holdings' common stock for a period of three months after such event (depending on the circumstances), at a purchase price equal to the amount originally paid for such shares or the fair market value on the closing date of the repurchase, depending on the circumstances, subject to Holdings' obligation to pay additional compensation to Mr. Fernandes under certain circumstances. 99

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In connection with the Webloyalty Acquisition, Mr. Fernandes also received warrants to purchases shares of Holdings' common stock that may be exercised, in whole or in part, at any time between January 14, 2011 and March 12, 2012 by surrendering such warrants and delivering the aggregate exercise price (based on a current exercise price per share of $8.15, $9.73 or $11.44, depending on which warrant Mr. Fernandes exercises) to Holdings. Review, Approval or Ratification of Transactions with Related Persons Pursuant to its written charter, our audit committee must review and approve all related-party transactions, which includes any related party transactions that we would be required to disclose pursuant to Item 404 of Regulation S-K promulgated by the SEC. For a discussion of the composition and responsibilities of our audit committee see "Item 10. Directors, Executive Officers and Corporate GovernanceAudit Committee." In determining whether to approve a related party transaction, the audit committee will consider a number of factors including whether the related party transaction is on terms and conditions no less favorable to us than may reasonably be expected in arm's-length transactions with unrelated parties. Director Independence We are not a listed issuer whose securities are listed on a national securities exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. However, if we were a listed issuer whose securities were traded on the NYSE and subject to such requirements, we would be entitled to rely on the controlled company exception contained in Section 303A of the NYSE Listed Company Manual for exception from the independence requirements related to the majority of our Board of Directors and for the independence requirements related to our Compensation Committee and Nominating and Corporate Governance Committee. Pursuant to Section 303A of the NYSE Listed Company Manual, a company of which more than 50% of the voting power is held by an individual, a group or another company is exempt from the requirements that its board of directors consist of a majority of independent directors and that the compensation committee and nominating committee of such company be comprised solely of independent directors. At March 1, 2011, Apollo beneficially owns 69% of the voting power of the Company which would qualify the Company as a controlled company eligible for exemption under the rule. For a discussion of the independence of members of our audit committee, see "Item 10. Directors, Executive Officers and Corporate Governance Audit Committee." Item 14. Principal Accounting Fees and Services

The following table presents fees for audit and other services provided to the Company by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates for the years ended December 31, 2010 and 2009.
For the Years Ended December 31, 2010 December 31, 2009

Audit Fees Audit-Related Fees(1) Tax Fees(2) All Other Fees Total Fees (1)

2,780,000 350,000 9,000 3,139,000

2,570,000 430,000 29,000 3,029,000

Audit related services in 2010 and 2009 represent SAS 70 reports, services associated with senior note offerings and regulatory filings relating to the Company's international acquisitions. Tax services for 2010 and 2009 related primarily to advisory services in connection with VAT taxes and preparation of certain foreign tax returns.

(2)

All of Deloitte & Touche LLP's fees for 2010 and 2009 were pre-approved by our audit committee. The audit committee reviewed the 2010 and 2009 audit and non-audit services and concluded that such services were compatible with maintaining the auditors' independence. The audit committee's policy is to pre-approve all services by the Company's independent accountants. The audit committee has adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other non-audit services that may be provided by Deloitte & Touche to the Company. The policy (a) identifies the guiding principles that must be considered by the audit committee in approving services to ensure that Deloitte & Touche LLP's independence is not impaired; (b) describes the audit, audit-related, tax and other services that may be provided and the non-audit services that are prohibited; and (c) sets forth pre-approval requirements for all permitted services. Under the policy, all services to be provided by Deloitte & Touche must be pre-approved by the audit committee. 100

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PART IV Item 15. Exhibits, Financial Statement Schedules

(a)(1) Financial Statements The following financial statements of Affinion Group, Inc., together with the Report of Independent Registered Public Accounting Firm, are included in Part II, Item 8, Financial Statements and Supplementary Data: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2010 and 2009 Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Changes in Deficit for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 Notes to Consolidated Financial Statements

(2) Financial Statement Schedules Not applicable. (3) Exhibits The following exhibits are filed as part of this Annual Report on Form 10-K or, where indicated, were previously filed and are hereby incorporated by reference:
Exhibit No. Description

2.1

2.2

2.3

3.1

3.2 4.1

4.2

Purchase Agreement, dated as of July 26, 2005, by and among Cendant Corporation, Affinion Group, Inc. (f/k/a Affinity Acquisition, Inc.), and Affinion Group Holdings, Inc. (f/k/a Affinity Acquisition Holdings, Inc.), as amended by Amendment No. 1 thereto, dated as of October 17, 2005, among Cendant Corporation, Affinion Group, Inc. (f/k/a Affinity Acquisition, Inc.), and Affinion Group Holdings, Inc. (f/k/a Affinity Acquisition Holdings, Inc.) (incorporated by reference to Exhibit No. 2.1 to Registration Statement on Form S-4, filed with the SEC on May 8, 2006, File No. 333-133895). Membership Interests Purchase Agreement, dated as of May 19, 2010, by and between Affinion Loyalty Acquisition, LLC, Affinion Group, Inc., Travel Leaders Group, L.L.C., Tag Investment Holdings, L.L.C., One Equity Partners III, L.P., OEP III Co-Investors, L.P., OEP II Partners Co-Invest, L.P. and One Equity Partners III, L.P., as representative acting on behalf of Sellers (as defined therein) (incorporated by reference to Exhibit No. 2.1 to Current Report on Form 8-K filed with the SEC on July 8, 2010, File No. 333-133895). Agreement and Plan of Merger, dated as of January 14, 2011, by and among Affinion Group Holdings, Inc., Affinion Group, Inc., Parker Holdings, LLC, Parker Merger Sub, Inc. and Webloyalty Holdings, Inc. (incorporated by reference to Exhibit No. 2.1 to Current Report on Form 8-K filed with the SEC on January 18, 2011, File No. 333-133895). Amended and Restated Certificate of Incorporation of Affinion Group, Inc. filed in the State of Delaware on September 27, 2005 (incorporated by reference to Exhibit No. 3.1 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). By-laws of Affinion Group, Inc. (incorporated by reference to Exhibit No. 3.2 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). 1 Indenture, dated as of April 26, 2006 governing the 11 /2% Senior Subordinated Notes due 2015, among Affinion Group, Inc., a Delaware corporation, the Subsidiary Guarantors (as defined therein) and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit No. 4.2 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Supplemental Indenture No. 1, dated as of October 4, 2007, among CCAA Corporation, a Delaware corporation and an indirect subsidiary of Affinion Group, Inc., Affinion Group, Inc., a Delaware corporation, and Wells Fargo Bank, National Association, as Trustee under the 1 Indenture dated as of April 26, 2006 governing the 11 /2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit No. 4.5 to Annual Report on Form 10-K for the year ended December 31, 2007, File No. 333-133895). 101

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Exhibit No. Description

4.3

4.4

4.5

4.6

4.7*

4.8* 4.9*

4.10 4.11* 4.12* 10.1

10.2

10.3

Supplemental Indenture No. 2, dated as of January 24, 2008, among Watchguard Registration Services, Inc., an Indiana corporation, Affinion 1 Group, Inc., and Wells Fargo Bank, National Association, as Trustee under the Indenture dated as of April 26, 2006 governing the 11 /2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit No. 4.6 to Annual Report on Form 10-K for the year ended December 31, 2007, File No. 333-133895). Supplemental Indenture No. 3, dated as of December 29, 2009, among Global Privacy Solutions, LLC, a Delaware limited liability company, Affinion Group, Inc., and Wells Fargo Bank, National Association, as Trustee under the Indenture dated as of April 26, 2006 governing the 1 11 /2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit No. 4.3 to Quarterly Report on Form 10-Q for the period ended June 30, 2010, File No. 333-133895). Supplemental Indenture No. 4, dated as of June 17, 2010, among Affinion Loyalty Acquisition, LLC, a Delaware limited liability company, Affinion Group, Inc., and Wells Fargo Bank, National Association, as Trustee under the Indenture dated as of April 26, 2006 governing the 1 11 /2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit No. 4.4 to Quarterly Report on Form 10-Q for the period ended June 30, 2010, File No. 333-133895). Supplemental Indenture No. 5, dated as of July 29, 2010, among Loyalty Travel Agency LLC, a Delaware limited liability company, Connexions Travel Solutions LLC, a Delaware limited liability company, International Travel Fulfillment LLC, a Delaware limited liability company, Affinion Group, Inc., and Wells Fargo Bank, National Association, as Trustee under the Indenture dated as of April 26, 2006 1 governing the 11 /2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit No. 4.3 to Quarterly Report on Form 10-Q for the period ended September 30, 2010, File No. 333-133895). Supplemental Indenture No. 6, dated as of February 14, 2011, among Webloyalty Holdings, Inc., a Delaware corporation, Webloyalty.com, Inc., a Delaware corporation, Lift Media, LLC, a Delaware limited liability company, Affinion Group, Inc., and Wells Fargo Bank, National 1 Association, as Trustee under the Indenture dated as of April 26, 2006 governing the 11 /2% Senior Subordinated Notes due 2015. Indenture, dated as of November 19, 2010 governing the 7.875 % Senior Notes due 2018, among Affinion Group, Inc., a Delaware corporation, the Subsidiary Guarantors (as defined therein) and Wells Fargo Bank, National Association, as Trustee. Supplemental Indenture No. 1, dated as of February 14, 2011, among Webloyalty Holdings, Inc., a Delaware corporation, Webloyalty.com, Inc., a Delaware corporation, Lift Media, LLC, a Delaware limited liability company, Affinion Group, Inc., and Wells Fargo Bank, National Association, as Trustee under the Indenture dated as of November 19, 2010 governing the 7.875% Senior Notes due 2018. 1 Form of 11 /2% Senior Subordinated Note due 2015 (incorporated by reference to Appendix A of Exhibit No. 4.2 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Form of 7.875 % Senior Note due 2018 (incorporated by reference to Exhibit No. 4.8 to this Annual Report). Registration Rights Agreement, dated as of November 19, 2010, among Affinion Group, Inc., the Guarantors (as defined therein), Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. Amended and Restated Senior Credit Facility, dated as of April 9, 2010, among Affinion Group Holdings, Inc., a Delaware corporation, Affinion Group, Inc., a Delaware corporation, and Bank of America, N.A., as administrative agent and collateral agent, Banc of America Securities LLC and Credit Suisse Securities (USA) LLC, as joint lead arrangers, Credit Suisse Securities (USA) LLC, as syndication agent, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and UBS Securities LLC, as documentation agents, and Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and UBS Securities LLC, as joint bookrunners (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on April 12, 2010, File No. 333-133895). Amended and Restated Guarantee and Collateral Agreement, dated and effective as of April 9, 2010, among Affinion Group, Inc., a Delaware corporation, each Subsidiary of the Affinion Group, Inc. identified as a party thereto and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit No. 10.2 to Current Report on Form 8-K filed with the SEC on April 12, 2010, File No. 333-133895). Incremental Assumption Agreement, dated as of December 13, 2010, among Affinion Group, Inc., a Delaware corporation, Affinion Group Holdings, Inc., a Delaware corporation, certain subsidiaries of Affinion Group, Inc., Bank of America, N.A., as incremental revolving facility lender, Deutsche Bank AG New York Branch, as incremental revolving facility lender, and Bank of America, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit No. 10.1 to Current Report on Form 8-K filed with the SEC on December 17, 2010, File No. 333-133895). 102

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Exhibit No. Description

10.4*

10.5

10.6

10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16

10.17

10.18 10.19

Second Incremental Assumption Agreement, dated as of February 11, 2011, among Affinion Group, Inc., a Delaware corporation, Affinion Group Holdings, Inc., a Delaware corporation, certain subsidiaries of Affinion Group, Inc., Bank of America N.A., as administrative agent and collateral agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., as joint lead arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Goldman Sachs Lending Partners LLC, J.P. Morgan Securities LLC, UBS Securities LLC and Morgan Joseph Triartisan Finance LLC, as joint book runners, and the other financial institutions thereto, as incremental term lenders. Management Investor Rights Agreement, dated as of October 17, 2005 among Affinion Group Holdings, Inc., a Delaware corporation, Affinion Group Holdings, LLC, a Delaware limited liability company, and the holders that are parties thereto (incorporated by reference to Exhibit No. 10.4 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Amendment to Management Investor Rights Agreement, dated as of April 30, 2010, among Affinion Group Holdings, Inc., a Delaware corporation, Affinion Group Holdings, LLC, a Delaware limited liability company, and the holders that are parties thereto (incorporated by reference to Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2010, File No. 333-133895). Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit No. 10.2 to Quarterly Report on Form 10-Q for the period ended March 31, 2010, File No. 333-133895). Amended and Restated Consulting Agreement, dated as of January 14, 2011, between Affinion Group, Inc. and Apollo Management V, L.P. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on January 18, 2011, File No. 333-133895). Affinion Group Holdings, Inc. 2005 Stock Incentive Plan, dated as of October 17, 2005 (incorporated by reference to Exhibit No. 10.6 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). First Amendment to the Affinion Group Holdings, Inc. 2005 Stock Incentive Plan, dated December 4, 2006 (incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for the year ended December 31, 2006, File No. 333-133895). Second Amendment to the Affinion Group Holdings, Inc. 2005 Stock Incentive Plan, dated January 30, 2007 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 333-133895). Form of Affinion Group Holdings, Inc. 2007 Stock Award Plan (incorporated by reference to Exhibit No. 10.6 to Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 333-133895). Form of Nonqualified Stock Option Agreement pursuant to Affinion Group Holdings, Inc.'s 2007 Stock Award Plan (incorporated by reference to Exhibit No. 10.7 to Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 333-133895). Restricted Stock Agreement, dated as of October 17, 2005, between Affinion Group Holdings, Inc. and Nathaniel J. Lipman (incorporated by reference to Exhibit No. 10.7 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Option Agreement, dated as of October 17, 2005, between Affinion Group Holdings, Inc. and Nathaniel J. Lipman (incorporated by reference to Exhibit No. 10.8 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Option Agreement, dated as of October 17, 2005, between Affinion Group Holdings, Inc. and Optionee (with Optionee signatories being Rooney and Siegel, among others) (incorporated by reference to Exhibit No. 10.9 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Subscription Agreement, dated as of October 17, 2005, between Affinion Group Holdings, Inc. and Investor (with Investor signatories being Rooney and Siegel, among others) (incorporated by reference to Exhibit No. 10.15 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Subscription Agreement, dated as of October 17, 2005, between Affinion Group Holdings, Inc. and Nathaniel J. Lipman (incorporated by reference to Exhibit No. 10.16 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Supplemental Bonus Letter by and between Officer and Cendant Marketing Services Division dated September 28, 2005 (assumed by Affinion Group, Inc.) (with Officer signatories being Lipman, Rooney and Siegel, among others) (incorporated by reference to Exhibit No. 10.18 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). 103

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Exhibit No. Description

10.20 10.21 10.22* 10.23

10.24* 10.25

10.26 10.27* 10.28

10.29

10.30

10.31* 12.1* 21.1* 31.1* 31.2* 32*

Employment Agreement, dated as of November 9, 2007, by and among Affinion Group, Inc., and Nathaniel J. Lipman (incorporated by reference to Exhibit No. 10.1 to Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 333-133895). Employment Agreement, dated as of November 9, 2007, among Affinion Group, LLC, Affinion Group, Inc. and Robert Rooney (incorporated by reference to Exhibit No. 10.3 to Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 333-133895). Amendment to Employment Agreement, dated as of January 13, 2010, by and among Affinion Group Holdings, Inc., Affinion Group, Inc. and Robert Rooney. Employment Agreement, dated as of November 9, 2007, by and among Affinion Group Holdings, Inc., Affinion Group, Inc. and Todd H. Siegel (incorporated by reference to Exhibit No. 10.5 to Quarterly Report on Form 10-Q for the period ended September 30, 2007, File No. 333-133895). Employment Agreement, dated as of January 15, 2010, by and among Affinion Group Holdings, Inc, Affinion Group, Inc. and Steven Upshaw. Patent License Agreement, dated as of October 17, 2005, between CD Intellectual Property Holdings, LLC, a Delaware corporation and Trilegiant Loyalty Solutions, Inc., a Delaware corporation (incorporated by reference to Exhibit No. 10.23 to Registration Statement on Form S-4 filed with the SEC on May 8, 2006, File No. 333-133895). Amended and Restated Deferred Compensation Plan, dated as of November 20, 2008, of Affinion Group, Inc. (incorporated by reference to Exhibit 10.28 to Annual Report on Form 10-K for the year ended December 31, 2009, File No. 333-133895). Employment Agreement, dated as of January 14, 2011, by and among Affinion Group Holdings, Inc., Affinion Group, Inc. and Richard Fernandes. Call Agreement, dated as of January 14, 2011, by and among Affinion Group Holdings, Inc., General Atlantic 79, L.P., Affinion Group Holdings, LLC and Richard Fernandes and Fernandes Family Trust A Dated June 25, 1999 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed with the SEC on January 18, 2011, File No. 333-133895). Fernandes Investor Rights Agreement, dated as of January 14, 2011, by and among Affinion Group Holdings, Inc., Affinion Group Holdings, LLC and Richard Fernandes (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed with the SEC on January 18, 2011, File No. 333-133895). Form of Warrant to Purchase Shares of Common Stock, par value $0.01 per share, of Affinion Group Holdings, Inc. issued to Richard Fernandes (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed with the SEC on January 18, 2011, File No. 333-133895). Employment Agreement, dated as of December 1, 2010, by and among Affinion Group Holdings, Inc., Affinion Group, Inc. and Lloyd M. Wirshba. Statement re: Computation of Ratio of Earnings to Fixed Charges. Subsidiaries of Affinion Group, Inc. Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act. Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act. Certification pursuant to 18 USC Section 1350.

* Filed herewith. 104

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GLOSSARY AD&D Accidental death and dismemberment insurance. Affinity Marketing Marketing of programs or services through a third-party channel utilizing its customer base and brand name. Attrition Rates Percentage of customers who cancel their membership, package benefits or insurance policy in a given period. Bounty Refers to up-front marketing payments we make to our marketing partners as compensation to utilize their brand names and customer contacts. Customer Service Marketing (CSM) Upsell programs occurring in affinity marketing partners' contact centers. Direct Marketing Any direct communication to a consumer or business that is designed to generate a response in the form of an order, a request for further information and/or a visit to a store for a specific product or service. DMA Direct Marketing Association Enhanced Checking Package benefits embedded in a customer's checking or share draft accounts. Fee Income Income for financial institutions generated from the sale of non-interest income products and services. In-Branch Marketing Face-to-face solicitation by a customer service representative physically located in a branch office. Media Distribution vehicles of solicitations such as direct mail, telemarketing, and the Internet. Membership A product that offers members access to a variety of discounts on purchases and other value-added benefits, such as credit monitoring and identity-theft resolution in return for paying a monthly or annual fee. Package A collection of benefits, including insurance, that are added to a checking account or credit card account to be offered to customers of our marketing partners. 105

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Solo Direct Mail Stand-alone mailings that market our programs and services. Statement inserts A marketing mailing inserted with financial institution marketing partner's monthly account statements. Transfer Plus Permission-based live operator call transfer program. Voice Response Unit (VRU) Automated credit card activation technology fully scripted by us to solicit additional members. 106

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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Affinion Group, Inc. has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. AFFINION GROUP, INC. By: /s/ Nathaniel J. Lipman Nathaniel J. Lipman Chief Executive Officer

Date:

March 3, 2011

Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of Affinion Group, Inc. and in the capacities and on the dates indicated.
Signature Title Date

/s/ Nathaniel J. Lipman

Nathaniel J. Lipman

/s/ Todd H. Siegel

Todd H. Siegel

/s/ Brian J. Dick

Brian J. Dick

/s/ Marc E. Becker

Marc E. Becker

Chief Executive Officer and Director (Principal Executive Officer) Executive Vice President and Chief Financial Officer (Principal Financial Officer) Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) Director Director Director Director Director Director Director Director Director Director

March 3, 2011 March 3, 2011

March 3, 2011

March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011 March 3, 2011

/s/ Stan Parker

Stan Parker

/s/ Eric L. Press

Eric L. Press

/s/ Matthew H. Nord

Matthew H. Nord

/s/ Richard J. Srednicki

Richard J. Srednicki

/s/ Jonathan E. Ellenthal

Jonathan E. Ellenthal

/s/ Richard J. Fernandes

Richard J. Fernandes

/s/ Anton J. Levy

Anton J. Levy

/s/ Scott D. Miller

Scott D. Miller

/s/ Alfred F. Kelly

Alfred F. Kelly

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AFFINION GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2010 and 2009 Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Changes in Deficit for the years ended December 31, 2010, 2009 and 2008 Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 Notes to Consolidated Financial Statements F-1 F-2 F-3 F-4 F-5 F-6 F-7

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Affinion Group, Inc.: We have audited the accompanying consolidated balance sheets of Affinion Group, Inc. and subsidiaries (the "Company") as of December 31, 2010 and 2009, and the related consolidated statements of operations, changes in deficit and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2011 expressed an unqualified opinion on the Company's internal control over financial reporting. /s/ Deloitte & Touche LLP Stamford, CT March 3, 2011 F-2

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AFFINION GROUP, INC. CONSOLIDATED BALANCE SHEETS (in millions, except share amounts)
December 31, 2010 2009

Assets Current assets: Cash and cash equivalents Restricted cash Receivables (net of allowance for doubtful accounts of $1.2 and $0.4, respectively) Receivables from related parties Profit-sharing receivables from insurance carriers Prepaid commissions Income taxes receivable Other current assets Total current assets Property and equipment, net Contract rights and list fees, net Goodwill Other intangibles, net Receivables from related parties Other non-current assets Total assets Liabilities and Deficit Current liabilities: Current portion of long-term debt Accounts payable and accrued expenses Payables to related parties Deferred revenue Income taxes payable Total current liabilities Long-term debt Deferred income taxes Deferred revenue Other long-term liabilities Total liabilities Commitments and contingencies (Note 11) Deficit: Common stock and additional paid-in capital, $0.01 par value, 1,000 shares authorized, and 100 shares issued and outstanding Accumulated deficit Accumulated other comprehensive income Total Affinion Group, Inc. deficit Non-controlling interest in subsidiary Total deficit Total liabilities and deficit See notes to the consolidated financial statements. F-3

121.1 $ 69.8 35.3 35.0 119.3 112.2 6.1 10.9 75.0 71.8 58.0 64.7 2.8 2.2 65.9 53.1 483.5 419.7 113.4 98.9 25.9 34.3 402.7 318.8 410.6 474.4 3.5 79.1 119.8 $ 1,515.2 $ 1,469.4

9.1 $ 20.2 367.3 281.4 17.3 14.7 163.9 199.1 2.8 6.6 560.4 522.0 1,685.2 1,423.2 54.2 34.6 21.0 30.5 59.3 65.9 2,380.1 2,076.2

172.1 285.5 (1,047.8) (905.2) 9.5 11.7 (866.2) (608.0) 1.3 1.2 (864.9) (606.8) $ 1,515.2 $ 1,469.4

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AFFINION GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions)

Year Ended December 31, 2010 2009 2008

Net revenues Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions Operating costs General and administrative Facility exit costs Depreciation and amortization Total expenses Income from operations Interest income Interest expense Loss on extinguishment of debt Other income (expense), net Loss before income taxes and non-controlling interest Income tax expense Net loss Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. See notes to the consolidated financial statements. F-4

$ 1,376.3

$ 1,376.9

$ 1,409.9

583.3 618.2 646.9 375.8 356.4 360.0 157.6 105.1 98.4 8.0 195.2 201.0 260.2 1,319.9 1,280.7 1,365.5 56.4 96.2 44.4 11.6 8.1 1.7 (158.0) (129.7) (142.9) (37.0) (1.8) (12.0) 16.3 (128.8) (37.4) (80.5) (12.8) (11.7) (7.5) (141.6) (49.1) (88.0) (1.0) (0.9) (0.7) $ (142.6) $ (50.0) $ (88.7)

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AFFINION GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT (in millions)

Affinion Group, Inc. Equity Common Stock and Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Non-Controlling Interest

Total Deficit

Balance, January 1, 2008 Comprehensive loss Net loss Currency translation adjustment Total comprehensive loss Dividend paid to non-controlling interest Return of capital Balance, December 31, 2008 Comprehensive loss Net loss Currency translation adjustment Total comprehensive loss Dividend paid to non-controlling interest Return of capital Balance, December 31, 2009 Comprehensive loss Net loss Currency translation adjustment Total comprehensive loss Dividend paid to non-controlling interest Repurchase of employee equity award in subsidiary Return of capital Capital contribution Balance, December 31, 2010

348.7

(766.5) $ (88.7)

12.3

0.6 0.7 (0.2) (0.4)

(404.9) (88.0) (16.2) (104.2) (0.4) (37.0) (546.5) (49.1) 15.7 (33.4) (0.7) (26.2) (606.8) (141.6) (2.1) (143.7) (1.0) (4.8) (119.8) 11.2 (864.9)

(16.0)

(37.0) 311.7

(855.2) (50.0)

(3.7)

0.7 0.9 0.3 (0.7)

15.4

(26.2) 285.5

(905.2) (142.6)

11.7

1.2 1.0 0.1 (1.0)

(2.2)

(4.8) (119.8) 11.2 172.1 $

(1,047.8) $

9.5

1.3

See notes to the consolidated financial statements. F-5

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AFFINION GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)

Year Ended December 31, 2010 2009 2008

Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of favorable and unfavorable contracts, net Amortization of debt discount and financing costs Unrealized loss (gain) on interest rate swaps Unrealized foreign currency transaction loss (gain) Loss on extinguishment of debt Facility exit costs Share-based compensation Interest accretion on held-to-maturity debt securities Deferred income taxes Payment received for assumption of loyalty points program liability Net change in assets and liabilities: Restricted cash Receivables Receivables from and payables to related parties Profit-sharing receivables from insurance carriers Prepaid commissions Other current assets Contract rights and list fees Other non-current assets Accounts payable and accrued expenses Deferred revenue Income taxes receivable and payable Other long-term liabilities Other, net Net cash provided by operating activities Investing Activities Capital expenditures Acquisition-related payments, net of cash acquired Redemption (purchase) of held-to-maturity debt securities of Affinion Group Holdings, Inc Restricted cash Net cash used in investing activities Financing Activities Proceeds from issuance of term loan Proceeds from issuance of senior notes Financing costs Borrowings (repayments) under line-of-credit agreement, net Repayment of term loans Redemption of senior notes Principal payments on borrowings Return of capital to parent company Repurchase of employee equity award of a subsidiary Distribution to non-controlling interest of a subsidiary Net cash provided by (used in) financing activities Effect of changes in exchange rates on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and Cash Equivalents, End of Year Supplemental Disclosure of Cash Flow Information: Interest payments Income tax payments See notes to the consolidated financial statements. F-6

$ (141.6) $ 195.2 (2.2) 10.6 2.9 1.9 37.0 8.0 11.1 (6.0) 7.0 6.5 (2.2) 13.7 (10.5) (3.4) 6.4 (12.6) (2.2) 4.6 47.4 (43.5) (5.1) (5.6) 4.4 121.8 (39.9) (171.8) 78.9 1.5 (131.3) 875.0 471.5 (35.5) (655.3) (467.6) (0.3) (119.8) (3.6) (1.0) 63.4 (2.6) 51.3 69.8 $ 121.1 $ $ $ 137.6 9.3 $ $

(49.1) $ (88.0) 201.0 (2.2) 8.2 (0.9) 13.6 5.0 (4.3) 4.5 6.7 1.4 (28.8) (1.0) 26.7 (1.9) (8.5) (1.9) (17.9) (3.5) (40.8) 0.9 (4.6) 0.2 102.8 (39.9) (22.5) (49.2) 0.1 (111.5) 260.2 (3.0) 5.9 15.9 (16.5) 3.1 1.5 7.4 0.9 (8.3) (1.7) (39.5) 4.6 (6.1) (5.1) (2.4) 4.7 (23.8) (3.3) (2.1) (1.3) 103.1 (36.7) (13.7) (8.7) (59.1)

136.5 (4.5) (57.0) 18.5 (6.7) (0.3) (26.2) (37.0) (0.7) (0.4) 41.4 (19.2) 0.8 (2.7) 33.5 22.1 36.3 14.2 69.8 $ 36.3 118.7 5.6 $ 116.5 $ 7.2

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AFFINION GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unless otherwise noted, all dollar amounts are in millions, except per share amounts) 1. BASIS OF PRESENTATION AND BUSINESS DESCRIPTION Basis of Presentation On October 17, 2005, Cendant Corporation ("Cendant") completed the sale of the Cendant Marketing Services Division (the "Predecessor") to Affinion Group, Inc. (the "Company" or "Affinion"), a wholly-owned subsidiary of Affinion Group Holdings, Inc. ("Affinion Holdings") and an affiliate of Apollo Global Management, LLC ("Apollo"), pursuant to a purchase agreement dated July 26, 2005 for approximately $1.8 billion (the "Apollo Transactions"). The purchase price consisted of approximately $1.7 billion of cash, net of estimated closing adjustments, plus $125.0 million face value of preferred stock (fair value at issuance of $80.4 million) of Affinion Holdings issued at closing and a warrant (fair value at issuance of $16.7 million) that is exercisable into 4,437,170 shares of common stock of Affinion Holdings, and $38.1 million of transaction-related costs. All references to Cendant refer to Cendant Corporation, which changed its name to Avis Budget Group in August 2006, and its consolidated subsidiaries, specifically in the context of its business and operations prior to, and in connection with, the Company's separation from Cendant. Business Description The Company provides comprehensive customer engagement and loyalty solutions that enhance or extend the relationship of millions of consumers with many of the largest companies in the world. The Company partners with these companies to develop and market programs that provide services to their end-customers using its expertise in customer engagement, creative design and product development. The Company has substantial expertise in deploying various forms of customer engagement communications, such as direct mail, inbound and outbound telephony and the Internet, and in bundling unique benefits to offer products and services to the customers of its marketing partners on a highly targeted basis. The Company designs programs that provide a diversity of benefits based on end-customer needs and interests, with a particular focus on programs offering lifestyle and protection benefits and programs which offer savings on purchases. For instance, the Company provides credit monitoring and identity-theft resolution, accidental death and dismemberment insurance ("AD&D"), discount travel services, loyalty points programs, various checking account and credit card enhancement services and other products and services. Affinion North America. Affinion North America is comprised of the Company's Membership, Insurance and Package, and Loyalty customer engagement businesses in North America. Membership Products. The Company designs, implements and markets subscription programs that provide members with personal protection benefits and value-added services including credit monitoring and identity-theft resolution services, as well as access to a variety of discounts and shop-at-home conveniences in such areas as retail merchandise, travel, automotive and home improvement. Insurance and Package Products. The Company markets accidental death and dismemberment insurance and other insurance programs and designs and provides checking account enhancement programs to financial institutions. Loyalty Products. The Company designs, implements and administers points-based loyalty programs for financial, travel, auto and other companies. The Company also provides enhancement benefits to major financial institutions in connection with their credit and debit card programs. In addition, the Company provides and manages travel reward products for loyalty programs.

Affinion International. Affinion International is comprised of the Company's Membership, Package and Loyalty customer engagement businesses outside North America. The Company expects to leverage its current international operational platform to expand its range of products and services, develop new marketing partner relationships in various industries and grow its geographical footprint. F-7

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned and majority-owned subsidiaries. Investments in entities over which the Company has the ability to exercise significant influence but does not have a controlling interest are accounted for under the equity method of accounting. The Company considers several factors in determining whether it has the ability to exercise significant influence with respect to investments, including, but not limited to, direct and indirect ownership level in the voting securities, active participation on the board of directors, approval of operating and budgeting decisions and other participatory and protective rights and commercial business relationships. Under the equity method, the Company's proportionate share of the net income or loss of such investee is reflected in the Company's consolidated results of operations. Although the Company owns interests in companies that it accounts for pursuant to the equity method, the investments in those entities were not significant as of December 31, 2010 and 2009. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). All intercompany balances and transactions have been eliminated. Share-Based Compensation For all stock-based awards issued by Affinion Holdings to employees of the Company that are accounted for as equity awards, the Company recognizes compensation expense, net of estimated forfeitures based on estimated fair values on the date of grant. For all stock-based awards issued by Affinion Holdings to employees of the Company that are accounted for as liability awards, the Company recognizes compensation expense, net of foreitures, based on estimated fair value at each reporting date. Compensation expense is recognized ratably over the requisite service period, which is the period during which the employee is required to provide services in exchange for the award. The requisite service period is generally the vesting period. Stock compensation expense is included in general and administrative expense in the accompanying consolidated statements of operations, with an offsetting liability to Affinion Holdings. Revenue Recognition Membership For retail memberships, annual full-money-back ("FMB"), annual pro rata and monthly memberships are offered, each of which is generally marketed with a free trial period. Membership revenue is not recognized until the trial period has expired, membership fees have been collected and the membership fees become non-refundable. Although payment is received from members at the beginning of an FMB membership, the memberships are cancelable for a full refund at any time during the membership period. Accordingly, FMB revenue is deferred and recognized at the end of the membership term when it is no longer subject to refund. Annual pro rata fees (related to memberships that are cancelable for a pro rata refund) are recognized ratably over the membership term as membership revenue is earned and no longer subject to refund. Monthly membership revenue is recognized when earned and no longer subject to refund. For wholesale memberships, marketing partners are provided with programs and services and, in many cases, the marketing partners market those programs and services to their customer bases. Monthly or annual fees are received from the marketing partners based on the number of members who purchase these programs from the marketing partners and revenue is recognized as the monthly fees are earned. Insurance Commission revenue is recognized based on premiums earned by the insurance carriers that issue the policies. Premiums are typically paid either monthly or quarterly and revenue is recognized ratably over the underlying policy coverage period. There are also revenue and profit-sharing arrangements with the insurance carriers which issue the underlying insurance policies. Commission revenue from insurance programs is reported net of insurance costs. Insurance costs totaled approximately $159.1 million in 2010, $180.5 million in 2009 and $153.0 million in 2008. Under a typical arrangement, commission revenue of approximately 60% of the gross premiums collected on behalf of the insurance carrier is initially retained and approximately 40% of gross premiums is remitted to the insurance carrier. No less frequently than annually, a profit-sharing settlement analysis is prepared which is based on the premiums paid to the insurance carriers less claims experience incurred to date, estimated claims incurred but not reported, reinsurance costs and carrier administrative fees. An accrual is made monthly for the expected share of this excess or shortfall based on the claims experience to date, including an estimate for claims incurred but not reported. The profit share excess is reflected in profit-sharing receivables from insurance carriers on the accompanying consolidated balance sheets. Historically, the claims experience has not resulted in a shortfall. Package One-time fees from marketing partners are earned upon the implementation of a package program and monthly fees are earned based on the number of customers enrolled in such program. Typically, a one-time implementation fee to design a package program for a marketing partner is charged and is recognized as revenue over the applicable expected life of the customer relationship. Following program design, the marketing partner may also pay a onetime fee for each new F-8

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member to cover initial enrollment costs. The one-time fee for enrollment is recognized as revenue over the contract term and the associated enrollment costs are expensed as incurred. The marketing partner collects revenue each month from its customers and pays a per subscriber monthly fee for the benefits and services. These monthly fees are recognized as revenue as the fees are earned. Strategic consultation, pricing and profitability consultation, competitive analysis and implementation assistance are provided and revenue is recorded at the time the services are performed. Loyalty Loyalty Solutions programs generate revenue from four primary product lines: loyalty, travel reservation service fees, protection and convenience. Generally, loyalty revenue consists of an implementation fee on initial program set-up that is recognized over the expected life of the customer relationship, with cash received upon completion of agreed-upon milestones, a monthly per member administrative fee and redemption fees that are recognized as earned. Loyalty redemption revenue is reported net of the pass through of fulfillment costs. Travel reservation service fee income is generally recognized when the traveler's reservation or booking is made and secured by the use of points or credit card, net of estimated cancellations and "no-shows". Protection and convenience programs are sold to marketing partners on a wholesale basis; the partner generally provides the enhancements (e.g. credit card enhancements) to their customers and a monthly fee is received from the marketing partner based on the number of marketing partner customers who have access to the enhancement program. Marketing partners also purchase incentives (such as gift cards) and revenue is recognized upon the delivery of the incentives to the marketing partner. Other Other revenue primarily includes travel reservation services, royalties, co-operative advertising and shopping program revenues. Royalty revenue is recognized monthly when earned and no longer subject to refund. Cooperative advertising revenue is earned from vendors that include advertising of their products and services in the membership program catalogues. Cooperative advertising revenue is recognized upon the distribution of the related travel or shopping catalogue to members. In connection with the shopping membership program, the Company operates a retail merchandising service that offers a variety of consumer products at a discount to members. Shopping program revenue is recorded net of merchandise product costs as the Company acts as an agent between the member and third-party merchandise vendor. Shopping program revenue is recorded upon the shipment of the merchandise by the vendor to the member. Marketing Expense Membership Marketing expense to acquire new members is recognized when incurred, which is generally prior to both the commencement of the trial period and recognition of revenue for membership programs. Insurance Marketing expense to acquire new insurance business is recognized by the Company when incurred. Payments are made to marketing partners or third parties associated with acquiring rights to their existing block of insurance customers (contract rights) and for the renewal of existing contracts that provide the Company primarily with the right to retain billing rights for renewal of existing customers' insurance policies and the ability to perform future marketing (list fees). These payments are deferred on the accompanying consolidated balance sheets, with contract rights amortized to amortization expense and list fees amortized to marketing expense over the initial and renewal term of the contract, as applicable, using an accelerated method of amortization for contractual terms longer than five years and the straight line method of amortization for contractual terms of five years or less. Contract rights are considered acquisitions of intangible assets and therefore the related amortization is recorded as amortization expense. List fees primarily grant the rights to perform future marketing and therefore the related amortization is charged to marketing expense. The amortization methods employed generally approximate the expected pattern of net insurance revenue earned over the applicable contractual terms. Package Marketing costs associated with marketing partners' in-branch programs are expensed as such programs are implemented. These costs include the printing of brochures, banners, posters, other in-branch collateral marketing materials, training materials, new account kits, member mailings and statement inserts. The Company performs a variety of direct mail campaigns where it incurs all associated marketing costs and, in return, receives a greater share of the revenue generated (the "Package Marketing Campaigns"). For these Package Marketing Campaigns, the marketing expense is recognized when incurred which is generally prior to the recognition of monthly revenue. Commission Expense Membership Membership commissions represent payments to marketing partners, generally based on a percentage of revenue from the marketing of programs to such marketing partners' customers. Commissions are generally paid for each initial and renewal membership following the collection of membership fees from the customer. Commission costs are deferred on the accompanying consolidated balances sheets as prepaid commissions and are recognized as expense over the applicable membership period in the same manner as the related retail membership revenue is recognized. F-9

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Insurance Insurance administrative fees represent payments made to bank marketing partners, generally based on a fee per insured or a percentage of the revenue earned from the marketing of insurance programs to such marketing partners' customers. Administrative fees are paid for new and renewal insurance premiums received. Additionally, for certain channels and clients, commissions are paid to brokers. Administrative fees are included within commission expense on the accompanying consolidated statements of operations and are recognized ratably over the underlying insurance policy coverage period. Package Package commissions represent payments made to bank associations and brokers who provide support for the related programs. These commissions are based on a percentage of revenue and are expensed as the related revenue is recognized. Operating Costs Operating costs represent the costs associated with servicing our members and end-customers. These costs include product fulfillment costs, communication costs with members and end-customers, and payroll, telecommunications and facility costs attributable to operations responsible for servicing our members and end-customers. Income Taxes The Company is included as a member of Affinion Holdings' consolidated federal income tax return and as a member of certain of Affinion Holdings' unitary or combined state income tax returns. Income taxes are presented in the Company's consolidated financial statements using the asset and liability approach based on the separate return method for the consolidated group. Under this method, current and deferred tax expense or benefit for the period is determined for the Company and its subsidiaries as a separate group on a standalone basis. Deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statements and income tax bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the income tax provision, while increases to the valuation allowance result in additional income tax provision. The realization of deferred tax assets is primarily dependent on estimated future taxable income. As of December 31, 2010 and 2009, the Company has recorded a full valuation allowance for its U.S. federal net deferred tax assets. The Company has also recorded valuation allowances against the deferred tax assets of certain state and foreign taxing jurisdictions as of December 31, 2010 and 2009. The tax effects of an uncertain tax position ("UTP") taken or expected to be taken in income tax returns are recognized only if it is "more likely-thannot" to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes estimated accrued interest and penalties related to UTPs in income tax expense. The Company recognizes the benefit of a UTP in the period when it is effectively settled. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the tax position would be sustained upon examination. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Restricted Cash Restricted cash amounts relate primarily to insurance premiums collected from members that are held pending remittance to third-party insurance carriers. These amounts are not available for general operations under state insurance laws or under the terms of the agreements with the carriers that underwrite and issue insurance policies to the members. Changes in such amounts are included in operating cash flows in the consolidated statements of cash flows. Restricted cash also includes amounts to collateralize certain bonds and letters of credit issued on the Company's behalf and amounts held in escrow. Changes in such amounts are included in investing cash flows in the consolidated statements of cash flows. Derivative Instruments The Company records all derivative instruments on the balance sheet at fair value. Changes in the fair value of derivatives are recognized in earnings unless specific hedge criteria are met. Changes in the fair value of derivatives that are F-10

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designated as fair value hedges, along with the gain or loss on the hedged item, are recognized in current period earnings in the consolidated statements of operations. For derivative instruments that are designated as cash flow hedges, the effective portion of changes in the fair value of derivative instruments is initially recorded in other comprehensive income and subsequently reclassified into earnings when the hedged transaction affects earnings. Any ineffective portion of changes in the fair value of cash flow hedges are immediately recognized in earnings. The Company uses derivative financial instruments, primarily interest rate swaps, to manage its interest rate risk. The Company's interest rate swaps are recorded at fair value on the consolidated balance sheets. The swaps are not designated as hedging instruments and therefore changes in their fair value are recognized currently in earnings. The Company does not use derivative instruments for speculative purposes. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements and computer equipment acquired under capital leases is determined using the straight-line method over the shorter of the estimated useful lives of the related assets or the lease term. Useful lives are from 5 to 15 years for leasehold improvements, from 3 to 10 years for capitalized software, from 3 to 5 years for computer equipment and from 3 to 7 years for furniture, fixtures and equipment. Internally-Developed Software The Company capitalizes the costs of acquiring, developing and testing software to meet the Company's internal needs. Capitalization of costs associated with software obtained or developed for internal use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable that the project will be completed and used to perform the function intended. Capitalized costs include only (1) external direct cost of materials and services consumed in developing or obtaining internal-use software, and (2) payroll and payroll-related costs for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Goodwill and Identifiable Intangible Assets Goodwill represents the excess of the cost of an acquired entity over the net of the fair value of assets acquired and liabilities assumed. Goodwill has been assigned to the Company's reporting units and is tested for impairment at least annually based on financial data relating to the reporting unit to which it has been assigned. The Company evaluates the recoverability of the carrying value of each reporting unit's goodwill as of December 1, or whenever events or circumstances indicate that an impairment may have occurred. Goodwill is tested for impairment by comparing the carrying value of each reporting unit to its fair value. The Company determines the fair value of its reporting units utilizing discounted cash flows and incorporating assumptions that it believes marketplace participants would utilize. If the carrying amount of the reporting unit is greater than its fair value, a comparison of the reporting unit's implied goodwill is compared to the carrying amount of the goodwill to determine the amount of the impairment, if any. Any impairment is recognized in earnings in the period in which the impairment is determined. Indefinite-lived intangible assets, if any, are tested for impairment annually, or sooner if events occur or circumstances change. An indefinite-lived intangible asset is tested for impairment by comparing its fair value to its carrying amount and, if the carrying amount is greater than the fair value, recognizing an impairment loss for the excess. The Company's intangible assets as of December 31, 2010 and 2009 consist primarily of intangible assets with finite useful lives acquired by the Company in the Apollo Transactions and were initially recorded at their respective estimated fair values. Finite-lived intangible assets are amortized as follows:
Intangible Asset Amortization Method Estimated Useful Lives

Member relationships Affinity relationships Proprietary databases and systems Trademarks and tradenames Patents and technology Covenants not-to-compete

Declining balance Declining balance, straight line Straight line Straight line Declining balance Straight line F-11

7 years 7 15 years 3 years 15 years 12 years Contract life

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Impairment of Long-Lived Assets The Company evaluates the recoverability of the carrying amount of its long-lived assets when events and circumstances indicate that the carrying value of an asset may not be recoverable. For long-lived assets held and used by the Company, an impairment loss is recognized only if the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an asset is determined to be impaired, the loss is measured based on the difference between the fair value of the long-lived asset and its carrying amount. Self-Insurance Reserves At December 31, 2010 and 2009, included in accounts payable and accrued expenses on the consolidated balance sheets are liabilities of $2.4 million and $2.2 million, respectively, primarily related to health and welfare programs provided to employees in North America. Such compensation programs are self-insured. The required liability of such benefits is estimated based on actual claims outstanding and the estimated costs of claims incurred but not reported as of the balance sheet date. Foreign Currency Translation Assets and liabilities of foreign operations whose functional currency is the local currency are translated at exchange rates as of the balance sheet dates. Revenues and expenses of such local functional currency foreign operations are translated at average exchange rates during the periods presented. Translation adjustments resulting from the process of translating the functional currency foreign operation financial statements into U.S. dollars are included in accumulated other comprehensive income. Gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations. Foreign local currency gains and losses relating to non-operational transactions are included in other income (expense), net. Foreign currency gains and losses relating to operations are included in general and administrative expense. Contingencies Contingencies by their nature relate to uncertainties that require management to exercise judgment both in assessing the likelihood that a liability has been incurred as well as in estimating the amount of potential loss, if any. The Company accrues for costs relating to litigation, claims and other contingent matters when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties or on management's judgment, as appropriate. Actual amounts paid may differ from amounts estimated, and such differences will be charged to operations in the period in which the final determination of the liability is made. Estimates The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include accounting for profit-sharing receivables from insurance carriers, accruals and income tax valuation allowances, the estimated fair value of stock-based compensation, estimated fair values of assets and liabilities acquired in business combinations and estimated fair values of financial instruments. Concentration of Risk The Company generally derives a substantial portion of its net revenues from members and customers of 10 of the Company's marketing partners. For the years ended December 31, 2010, 2009 and 2008, the Company derived approximately 49%, 48% and 52%, respectively, of its net revenues from members and end-customers through marketing and servicing agreements with these 10 marketing partners. The Company's largest marketing partner accounted for 11.4% of consolidated net revenue for the year ended December 31, 2010. There were no marketing partners that individually accounted for more than 10% of consolidated net revenues for the year ended December 31, 2009. The Company's largest marketing partner accounted for 10.4% of consolidated net revenues for the year ended December 31, 2008. Many of these key marketing partner relationships are governed by agreements that may be terminated without cause by the marketing partners upon notice of as few as 90 days without penalty. Some of these agreements may be terminated by the Company's marketing partners upon notice of as few as 30 days without penalty. Moreover, under many of these agreements, the marketing partners may cease or reduce their marketing of the Company's services without terminating or breaching agreements with the Company. A loss of key marketing partners, a cessation or reduction in their marketing of the Company's services, or a decline in their businesses could have a material adverse effect on the Company's future revenue. F-12

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As of December 31, 2010 and 2009, approximately $73.7 million and $68.6 million of the profit-sharing receivables from insurance carriers were due from one insurance carrier. Allowance for Doubtful Accounts The activity in the allowance for doubtful accounts is as follows:
Year Ended December 31, 2010 Year Ended December 31, 2009

Balance at beginning of period Provision charged to expense, net of recoveries Write-offs Balance at end of period Supplemental Disclosure of Cash Flow Information

0.4 0.8 1.2

0.8 (0.3) (0.1) 0.4

As a result of Affinion Holdings' election to pay interest on its outstanding debt by increasing the face amount of the debt, during 2010 the Company increased the carrying amount of its held-to-maturity debt securities issued by Affinion Holdings by $6.1 million. During 2010, Affinion Holdings redeemed its debt securities and the Company received proceeds of $78.9 million. The excess of the proceeds in the amount of $11.2 million over the Company's carrying amount at the date of redemption of $67.7 million was treated as a capital contribution for accounting purposes. In addition, during 2010 the Company entered into a capital lease, acquiring property and equipment with a fair value of $0.5 million and entered into an operating lease, acquiring property and equipment with a fair value of $3.5 million. At December 31, 2010, the Company had accruals for the acquisition of property and equipment and the repurchase of an employee equity award of a subsidiary of $3.2 million and $3.5 million respectively. As a result of Affinion Holdings' election to pay interest on its outstanding debt by increasing the face amount of the debt, during 2009, the Company increased the carrying amount of its held-to-maturity debt securities issued by Affinion Holdings by $1.3 million. In addition, during 2009 the Company entered into a capital lease, acquiring property and equipment with a fair value of $0.7 million. At December 31, 2009, the Company had accruals for the acquisition of property and equipment and deferred financing costs of $0.5 million and $0.2 million, respectively. During 2008, the Company assumed all of the liabilities and obligations of certain ex-Cendant entities relating to a loyalty program for which the exCendant entities had previously provided certain loyalty program-related benefits. The Company received cash and receivables with a fair value substantially equivalent to the fair value of the fulfillment obligation relating to the loyalty program points outstanding as of the closing date. In addition, during 2008 the Company entered into a capital lease, acquiring property and equipment with a fair value of $0.7 million. At December 31, 2008, the Company had accruals of $1.8 million related to the acquisition of property and equipment. Recently Adopted Accounting Pronouncements In January 2010, the FASB issued new guidance to enhance disclosure requirements related to fair value measurements by requiring certain new disclosures and clarifying certain existing disclosures. This new guidance requires disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 recurring fair value measurements and the reasons for the transfers. In addition, the new guidance requires additional information related to activities in the reconciliation of Level 3 fair value measurements. The new guidance also expands the disclosures related to the disaggregation of assets and liabilities and information about inputs and valuation techniques. The new guidance related to Level 1 and Level 2 fair value measurements is effective for interim and annual reporting periods beginning after December 15, 2009 and the new annual and interim guidance related to Level 3 fair value measurements is effective for the Company as of January 1, 2011. Effective January 1, 2010, the Company adopted the new guidance related to Level 1 and Level 2 fair value measurements. The Company's adoption of the new guidance had no impact on its consolidated financial position, results of operations and cash flows. The Company does not expect the adoption of the new guidance related to Level 3 fair value measurements to have a material impact on its consolidated financial position, results of operations and cash flows. 3. ACQUISITIONS On January 4, 2010, the Company acquired credit card registration membership contracts from a U.S.-based financial institution for approximately $37.1 million. The purchase price has been allocated to member relationships, since there were no other assets acquired or liabilities assumed. F-13

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On July 1, 2010, the Company acquired 100% of Loyalty Travel Agency, L.L.C. and Connexions Loyalty Travel Solutions, L.L.C. (collectively "Connexions"), providers of loyalty rewards travel solutions in North America, pursuant to the membership interests purchase agreement dated as of May 19, 2010, for $135.0 million, less a working capital adjustment of $0.8 million. The Company incurred transaction costs of $2.0 million, which are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2010. Connexions is engaged in the business of providing loyalty rewards travel solutions in North America. Through the acquisition of Connexions and its innovative travel platform, the Company expects to advance its loyalty and travel product offerings with additional functionality and enhance its established relationships with leading companies that employ points and travel as rewards for customer loyalty. The Company believes the enhanced travel offering will benefit its partners through fully customized feature sets offering a vast array of configurations. Additionally, the integrated technology platform will extend the Company's ability to incorporate emerging marketplace trends within its travel offering, as well as provide dynamic promotion to increase travel value to clients. These anticipated benefits resulted in goodwill with respect to the Connexions acquisition of $82.2 million, all of which has been allocated to the Loyalty products segment. Approximately 46%, or $38.0 million, of the goodwill is expected to be deductible for income tax purposes. The purchase price of $134.2 million was allocated to the acquired assets and assumed liabilities as follows (in millions): Cash Accounts receivable Other current assets Property and equipment Intangible assets Goodwill Accounts payable and accrued liabilities Deferred income tax Other long-term liabilities Consideration transferred $ 3.8 24.5 1.2 4.7 53.0 82.2 (34.6) (0.4) (0.2) 134.2

The intangible assets acquired are principally affinity relationships ($46.0 million) and patents and technology ($5.0 million), which are expected to be amortized on a straight-line basis over weighted average useful lives of fourteen years and five years, respectively. Revenue and income from operations included in the Company's consolidated statement of operations for the year ended December 31, 2010 are $21.5 million and $0.9 million, respectively. The pro forma revenue and loss before income taxes and non-controlling interest of the Company assuming the acquisition had occurred on January 1, 2009 would have been $1,401.0 million and $132.3 million, respectively, for the year ended December 31, 2010 and $1,427.1 million and $52.4 million, respectively, for the year ended December 31, 2009. The pro forma results are intended for informational purposes and are not necessarily indicative of the results of operations that would have occurred had the Connexions acquisition been in effect at the beginning of the periods presented, or of future results of the combined operations. On December 11, 2009, the Company entered into a Share Purchase Agreement (SPA) to acquire substantially all of the outstanding equity of Mercato Impresa S.p.A. (Mercato), a marketing services and procurement services provider primarily for a leading Italian financial institution. The consideration of EUR 18.8 million, or approximately $28.2 million, was allocated among the acquired assets and assumed liabilities, principally between affinity relationships of $20.2 million, cash and cash equivalents of $10.4 million, net deferred income tax liabilities of $6.3 million, trade receivables of $3.5 million, trade payables of $3.5 million and income taxes payable of $2.6 million, based on their respective fair values as of the acquisition date. The purchase price was in excess of the fair value of the net assets acquired, resulting in the recognition of goodwill of $6.6 million. The affinity relationships are being amortized on an accelerated basis over a weighted average useful life of seven years. The post-acquisition operating results of Mercato included in the Company's consolidated statement of operations for the year ended December 31, 2009 were insignificant. Transaction costs of $0.6 million were included in general and administrative expense in the consolidated statement of operations for the year ended December 31, 2009. There were no other significant acquisitions in 2009. On June 30, 2008, the Company entered into an Assignment and Assumption Agreement ("AAA") with certain ex-Cendant entities. Prior to this transaction, the ex-Cendant entities provided certain loyalty program-related benefits and services to credit card holders of a major financial institution and received a fee from this financial institution based on spending by the credit card holders. Under the AAA, the Company assumed all of the liabilities and obligations of the ex-Cendant entities relating to the loyalty program, including the fulfillment of the then-outstanding loyalty program points obligations. In connection with the transaction, on the June 30, 2008 closing date, the Company received cash and receivables with a fair value substantially equivalent to the fair value of the fulfillment obligation relating to the loyalty program points F-14

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outstanding as of the closing date. The receivables are due and payable to the Company over a three year period following the closing date. On August 22, 2008, the Company entered into an agreement to acquire certain assets and assume certain liabilities of RCI Europe, an ex-Cendant entity. Under the agreement, the Company acquired all of the assets and assumed all of the liabilities of RCI Europe's travel services business that served the Company's customers in Europe. Following this acquisition, the Company provides travel services directly to its customers. The transaction was completed during the fourth quarter of 2008 for nominal consideration. On December 11, 2008, the Company acquired the outstanding equity of Loyaltybuild Limited ("Loyaltybuild"), a loyalty program benefit provider and accommodation reservation booking business. The purchase price consisted of an initial payment at closing of $16.1 million, with additional payments up to a maximum of EUR 16.0 million, or approximately $22.6 million, based on 2009 and 2010 earnings. The initial purchase price (including transaction costs of $0.4 million), net of acquired cash and cash equivalents of $3.8 million, was allocated among the acquired assets and assumed liabilities, principally between affinity relationships of $8.3 million, proprietary databases and systems of $1.7 million, property and equipment of $1.6 million, other current assets of $0.6 million, covenants not to compete of $0.2 million, accounts payable and accrued expenses of $2.9 million, a deferred tax liability of $1.3 million, based on their respective fair values as of the acquisition date. The purchase price net of acquired cash and cash equivalents was in excess of the fair value of the net assets acquired, resulting in the recognition of goodwill of $4.4 million. In 2009 and 2010, the goodwill was increased by $2.2 million and $3.4 million respectively, as a result of an earnout provision based on post-acquisition operating results. The affinity relationships are being amortized on an accelerated basis over 10 years, and proprietary databases and systems and covenants not to compete are being amortized on a straight line basis over 5 years and 2 years, respectively. The post-acquisition operating results of Loyaltybuild included in the Company's consolidated statement of operations for the year ended December 31, 2008 were insignificant. 4. INTANGIBLE ASSETS Intangible assets consisted of:
December 31, 2010 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount December 31, 2009 Accumulated Amortization Net Carrying Amount

Amortized intangible assets: Member relationships Affinity relationships Proprietary databases and systems Trademarks and tradenames Patents and technology Covenants not to compete

846.0 643.0 55.8 26.9 30.0 2.1 1,603.8

(700.5) $ (411.1) (54.8) (9.4) (16.6) (0.8) (1,193.2) $

145.5 231.9 1.0 17.5 13.4 1.3 410.6

809.1 603.4 56.0 26.1 25.0 1.2 1,520.8

(607.4) $ (362.7) (54.3) (7.6) (13.9) (0.5) (1,046.4) $

201.7 240.7 1.7 18.5 11.1 0.7 474.4

In connection with the July 1, 2010 acquisition of Connexions (see Note 3 Acquisitions), the Company acquired intangible assets valued at approximately $53.0 million. These intangible assets consisted primarily of affinity relationships valued at $46.0 million and patents and technology valued at $5.0 million. In addition, the Company acquired member relationships valued at $37.1 million in connection with its January 4, 2010 acquisition of credit card registration membership contracts. During 2010 and 2009, foreign currency translation resulted in a decrease of $7.0 million and an increase of $5.3 million, respectively, in the gross carrying amount of intangible assets and a decrease of $2.8 million and an increase of $4.2 million, respectively, in accumulated amortization. Amortization expense relating to intangible assets was as follows:
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Member relationships Affinity relationships Proprietary databases and systems Trademarks and tradenames Patents and technology Covenants not to compete Total

$ F-15

93.3 50.9 0.6 1.8 2.7 0.4 149.7

97.1 53.1 1.1 1.7 2.3 0.3 155.6

123.1 64.5 14.5 2.2 2.4 0.2 206.9

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Based on the Company's amortizable intangible assets as of December 31, 2010, the Company expects the related amortization expense for the five succeeding fiscal years to be approximately $129.5 million in 2011, $104.3 million in 2012, $55.7 million in 2013, $50.8 million in 2014 and $36.0 million in 2015. At January 1, 2009, December 31, 2009 and December 31, 2010, the Company had gross goodwill of $323.0 million, $334.3 million and $418.2 million, respectively, and accumulated impairment losses of $15.5 million as of each date. The impairment loss was recognized in 2006 and represented all of the goodwill ascribed to the Loyalty products segment in connection with the Apollo Transactions. The changes in the Company's carrying amount of goodwill for the years ended December 31, 2010 and 2009 are as follows:
Balance at January 1, 2009 Balance at December 31, 2009 Balance at December 31, 2010

Acquisition

Currency Translation

Acquisition

Currency Translation

Membership products Insurance and package products Loyalty products International products Total

231.1 58.3 18.1 307.5

8.8 8.8

2.5 2.5

231.1 58.3 29.4 318.8

82.2 3.4 85.6

$ (1.7) (1.7) $

231.1 58.3 82.2 31.1 402.7

The change in goodwill of Loyalty products in 2010 is attributable to the July 1, 2010 acquisition of Connexions (see Note 3 Acquisitions). Substantially all of the change in goodwill of International products in 2010 is attributable to the December 11, 2008 acquisition of Loyaltybuild Limited, a loyalty program benefit provider and accommodation reservation booking business, based on the earn-out component of the purchase price (see Note 3 Acquisitions). The acquisition-related change in goodwill of International products in 2009 is principally attributable to the acquisition of Mercato Impresa S.p.A., a marketing services and procurement services provider primarily for a leading Italian financial institution (see Note 3 Acquisitions). 5. CONTRACT RIGHTS AND LIST FEES Contract rights and list fees consisted of:
December 31, 2010 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount December 31, 2009 Accumulated Amortization Net Carrying Amount

Contract rights List fees

$ $

60.4 31.1 91.5

$ $

(52.2) (13.4) (65.6)

$ $

8.2 17.7 25.9

$ $

61.4 24.5 85.9

$ $

(42.6) (9.0) (51.6)

$ $

18.8 15.5 34.3

Amortization expense for the year ended December 31, 2010 was $14.4 million, of which $4.3 million is included in marketing expense and $10.1 million is included in depreciation and amortization expense in the consolidated statement of operations for the year ended December 31, 2010. Amortization expense for the year ended December 31, 2009 was $15.7 million, of which $3.6 million is included in marketing expense and $12.1 million is included in depreciation and amortization expense in the consolidated statement of operations for the year ended December 31, 2009. Amortization expense for the year ended December 31, 2008 was $19.8 million, of which $2.6 million is included in marketing expense and $17.2 million is included in depreciation and amortization expense in the consolidated statement of operations for the year ended December 31, 2008. Based on the Company's contract rights and list fees as of December 31, 2010, the Company expects the related amortization expense for the five succeeding fiscal years to be approximately $11.1 million in 2011, $3.8 million in 2012, $3.3 million in 2013, $2.5 million in 2014 and $2.0 million in 2015. F-16

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6. OTHER CURRENT ASSETS Other current assets consisted of:

December 31, 2010 2009

Prepaid membership materials Prepaid insurance costs Other receivables Prepaid merchant fees Prepaid marketing costs Other Total

28.6 4.5 7.8 1.2 5.0 18.8 65.9

14.9 4.7 5.1 1.9 3.7 22.8 53.1

Prepaid marketing costs for December 31, 2009 have been reclassified from Other to be consistent with the 2010 presentation. 7. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of:
December 31, 2010 2009

Leasehold improvements Capitalized software Computer equipment ($2.3 million and $2.4 million in 2010 and 2009, respectively, under capital leases) Furniture, fixtures and equipment Projects in progress Less: Accumulated depreciation and amortization Total

16.6 $ 14.5 166.3 140.1 80.0 68.4 16.6 10.7 20.0 18.0 299.5 251.7 (186.1) (152.8) $ 113.4 $ 98.9

Depreciation and amortization expense on property and equipment, including assets acquired under capital leases, totaled $35.4 million, $33.3 million and $36.1 million for the years ended December 31, 2010, 2009 and 2008, respectively. 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of:
December 31, 2010 2009

Accounts payable Accrued commissions Accrued payroll and related costs Accrued product costs Accrued marketing costs Accrued interest Accrued taxes, other than income taxes Accrued legal and professional fees and loss contingency accruals Other Total F-17

100.7 22.8 36.8 49.3 18.3 23.6 32.9 23.4 59.5 367.3

85.5 24.3 24.9 34.3 19.8 18.5 29.7 5.5 38.9 281.4

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9. LONG-TERM DEBT Long-term debt consisted of:

December 31, 2010 2009

Term loan due 2016 Term loan due 2012 Revolving credit facility expiring in 2015 Revolving credit facility expiring in 2011 7.875% senior notes due 2018, net of unamortized discount of $3.5 million, with an effective interest rate of 8.000% 1 10 /8% senior notes due 2013, net of unamortized discount of $1.1 million, with an effective interest rate of 10.285% 1 10 /8% senior notes due 2013, net of unamortized discount of $11.7 million, with an effective interest rate of 12.877% 1 11 /2% senior subordinated notes due 2015, net of unamortized discount of $2.5 million and $3.1 million, respectively, with an effective interest rate of 11.75% Capital lease obligations Total debt Less: current portion of long-term debt Long-term debt

$ 868.4 $ 648.6 471.5 302.9 138.3 353.0 352.4 1.4 1.2 1,694.3 1,443.4 (9.1) (20.2) $1,685.2 $1,432.2

On April 9, 2010, the Company, as Borrower and Affinion Holdings entered into a $1.0 billion amended and restated senior secured credit facility with its lenders ("Affinion Credit Facility"). The Affinion Credit Facility consists of a five-year $125.0 million revolving credit facility and an $875.0 million term loan facility. On December 13, 2010, the Company, as Borrower and Affinion Holdings, entered into an agreement with two of its lenders which resulted in an increase in the revolving credit facility to $160.0 million, with a further increase to $165.0 million upon the satisfaction of certain conditions. These conditions were satisfied in January 2011. The revolving credit facility includes a letter of credit subfacility and a swingline loan subfacility. The term loan facility matures in October 2016. However the term loan facility will mature on the date that is 91 days prior to the maturity of the Senior Subordinated Notes unless, prior to that date, (a) the maturity for the Senior Subordinated Notes is extended to a date that is at least 91 days after the maturity of the term loan facility or (b) the obligations under the Senior Subordinated Notes are (i) repaid in full or (ii) refinanced, replaced or defeased in full with new loans and/or debt securities with maturity dates occurring after the maturity date of the term loan facility. The term loan facility provides for quarterly amortization payments totaling 1% per annum, with the balance payable upon the final maturity date. The term loan facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. The interest rates with respect to term loans and revolving loans under the Affinion Credit Facility are based on, at the Company's option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 3.50%, or (b) the highest of (i) Bank of America, N.A.'s prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50% ("ABR"), in each case plus 2.50%. The effective interest rate on the term loan for the period from April 9, 2010 to December 31, 2010 was 5% per annum. The Company's obligations under the credit facility are, and the Company's obligations under any interest rate protection or other hedging arrangements entered into with a lender or any of its affiliates will be, guaranteed by Affinion Holdings and by each of the Company's existing and subsequently acquired or organized domestic subsidiaries, subject to certain exceptions (provided that Affinion Holdings' guarantee obligations will not extend to any additional credit facilities as described above until Affinion Holdings' existing credit facility is repaid or refinanced). The credit facility is secured to the extent legally permissible by substantially all of the assets of (i) Affinion Holdings, which consists of a pledge of all the Company's capital stock and (ii) the Company and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by the Company or any subsidiary guarantor and (b) security interests in substantially all tangible and intangible assets of the Company and each subsidiary guarantor, subject to certain exceptions. The credit facility also contains financial, affirmative and negative covenants. The negative covenants in the Company's credit facility include, among other things, limitations (all of which are subject to certain exceptions) on the Company's (and in certain cases, Affinion Holdings') ability to: declare dividends and make other distributions, redeem or repurchase the Company's capital stock; prepay, redeem or repurchase certain of the Company's subordinated indebtedness; make loans or investments (including acquisitions); incur additional indebtedness (subject to certain exceptions); enter into agreements that would restrict the ability of the Company's subsidiaries to pay dividends; merge or enter into acquisitions; sell assets; and enter into transactions with affiliates. The credit facility also requires the Company to comply with financial maintenance covenants with a maximum ratio of total debt to EBITDA (as defined) and a minimum ratio of EBITDA to cash interest expense. The proceeds of the term loan under the Affinion Credit Facility were utilized to repay the outstanding balance of the previously existing senior secured term loan, including accrued interest, of $629.7 million and pay fees and expenses of approximately $27.0 million. The remaining proceeds are available for working capital and other general corporate purposes, including permitted acquisitions and investments. In connection with the refinancing, the Company recorded a loss on extinguishment of debt of approximately $7.4 million during the year F-18

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ended December 31, 2010 representing the write-off of the unamortized balance of the deferred financing costs associated with the prior credit facility. As of December 31, 2010, there were no outstanding borrowings under the revolving credit facility. There were no borrowings or repayments under the revolving credit facility for the period from April 9, 2010 through December 31, 2010. As of December 31, 2010, the Company had $153.2 million available for borrowing under the Affinion Credit Facility after giving effect to the issuance of $6.8 million of letters of credit. On October 17, 2005, the Company entered into a senior secured credit facility ("Initial Affinion Credit Facility"). The Initial Affinion Credit Facility was comprised of a term loan that initially totaled $860.0 million due in 2012 and a $100.0 million revolving credit facility terminating in 2011. The revolving credit facility included letter of credit and swingline sub-facilities. The term loan provided, at the Company's option, for interest rates of a) adjusted LIBOR plus 2.50% or b) the higher of i) Credit Suisse, Cayman Island Branch's prime rate and ii) the Federal Funds Effective Rate plus 0.5% ("ABR"), in each case plus 1.50%. As of December 31, 2009 and 2008, the interest rates on the term loan were 2.73% and 4.65% respectively. The revolving credit facility provided, at the Company's option, for interest rates of adjusted LIBOR plus 2.75% or ABR plus 1.75% subject to downward adjustment based on the Company's senior secured bank leverage ratio, as set forth in the agreement governing the Initial Affinion Credit Facility. As of December 31, 2008, the interest rate on the revolving credit facility was 3.87%. The Initial Affinion Credit Facility was secured by all of the Company's outstanding stock held by Affinion Holdings and by substantially all of the assets of the Company, subject to certain exceptions. The term loan required quarterly repayments totaling $8.6 million per annum with the balance payable at maturity in October 2012 subject to reductions for certain prepayments. Through December 31, 2009, the Company had made nine voluntary prepayments of the term loan aggregating $205.0 million, in addition to repayments made in 2009 and 2010 aggregating $26.0 million based on excess cash flow through December 31, 2009, and, therefore, all of the Company's mandatory repayment obligations had been satisfied, other than future required annual payments, if any, based on excess cash flow, as set forth in the agreement governing the Initial Affinion Credit Facility. The Initial Affinion Credit Facility generally required the Company to prepay the outstanding term loan with proceeds from certain asset dispositions that were not reinvested, a portion of excess cash flow beginning in July 2006 and the net cash proceeds from certain debt issued in the future, as set forth in the agreement governing the Initial Affinion Credit Facility. The Initial Affinion Credit Facility also permitted the Company to obtain additional borrowing capacity up to the greater of $175.0 million and an amount equal to Adjusted EBITDA, as set forth in the agreement governing the Initial Affinion Credit Facility, for the most recent fourquarter period. The revolving credit facility carried a commitment fee of 0.5% on the unused amount. As of December 31, 2009, there were no outstanding borrowings under the revolving credit facility. As of December 31, 2008, $57.0 million had been drawn down under the revolving credit facility. Borrowings during the period from January 1, 2010 to April 8, 2010 and the years ended December 31, 2009 and 2008 were $39.0 million, $136.4 million and $277.0 million, respectively, and repayments during the period from January 1, 2010 to April 8, 2010 and during the years ended December 31, 2009 and 2008 were $39.0 million, $193.4 million and $258.5 million, respectively. On November 19, 2010, the Company completed a private offering of $475.0 million aggregate principal amount of 7.875% Senior Notes due 2018 ("2010 Senior Notes"). The 2010 Senior Notes bear interest at 7.875% per annum payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2011. The 2010 Senior Notes will mature on December 15, 2018. The 2010 Senior Notes are redeemable at the Company's option prior to maturity. The indenture governing the 2010 Senior Notes contains negative covenants which restrict the ability of the Company and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. The Company's obligations under the 2010 Senior Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by each of the Company's existing and future domestic subsidiaries that guarantee the Company's indebtedness under the Affinion Credit Facility. The 2010 Senior Notes and guarantees thereof are senior unsecured obligations of the Company and rank equally with all of the Company's and the guarantors existing and future senior indebtedness and senior to the Company's and the guarantors existing and future subordinated indebtedness. The 2010 Senior Notes are therefore effectively subordinated to the Company's and the guarantors' existing and future secured indebtedness, including the Company's obligations under the Affinion Credit facility, to the extent of the value of the collateral securing such indebtedness. The 2010 Senior Notes are structurally subordinated to all indebtedness and other obligations of each of the Company's existing and future subsidiaries that are not guarantors. In connection with the issuance of the 2010 Senior Notes, the Company entered into a registration rights agreement, pursuant to which the Company has agreed, among other things, to offer to exchange the 2010 Senior Notes for a new issue of substantially identical notes that have been registered under the Securities Act of 1933, as amended. In the event that the Company does not comply with its obligations under the registration rights agreement to file the registration statement within 180 days and have it declared effective within 300 days, the Company will be required to pay liquidated damages to holders of the 2010 Senior Notes in an amount equal to 0.25% per annum of the principal amount of the 2010 Senior Notes, which amount will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all defaults under the registration rights agreement have been cured up to a maximum of 1.00% per annum. The Company used substantially all of the net proceeds of the offering of the 2010 Senior F-19

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Notes to finance the purchase of the Senior Notes (defined below) issued in 2005 and 2006 and the 2009 Senior Notes (defined below). On October 17, 2005, the Company issued senior notes ("Senior Notes"), with a face value of $270.0 million, for net proceeds of $266.4 million. The 1 Senior Notes bore interest at 10 /8% per annum, payable semi-annually on April 15 and October 15 of each year. The Senior Notes would have matured on October 15, 2013. The Company had the option to redeem all or part of the Senior Notes at any time on or after October 15, 2009 at redemption prices (generally at a premium) set forth in the indenture governing the Senior Notes. The Senior Notes were senior unsecured obligations and ranked equally in right of payment with the Company's existing and future senior obligations and senior to the Company's existing and future senior subordinated indebtedness. As discussed in Note 18Guarantor/Non-Guarantor Supplemental Financial Information, the Senior Notes were guaranteed by certain subsidiaries of the Company. On May 3, 2006, the Company issued an additional $34.0 million aggregate principal amount of Senior Notes at a premium and applied the proceeds, together with cash on hand, to repay the remaining $34.1 million of outstanding borrowings under the Bridge Loan, as defined below, plus accrued interest, and to pay fees and expenses associated with such issuance. These Senior Notes were issued as additional notes under the Senior Notes indenture dated October 17, 2005 and, together with the $270.0 million of Senior Notes originally issued under such indenture, were treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Senior Notes were redeemed in November 2010 using the net proceeds from the offering of the 2010 Senior Notes. On April 26, 2006, the Company issued $355.5 million aggregate principal amount of 11 /2% senior subordinated notes due October 15, 2015 (the "Senior Subordinated Notes") and applied the gross proceeds of $350.5 million to repay $349.5 million of outstanding borrowings under a then-outstanding $383.6 million senior subordinated loan facility (the "Bridge Loan"), plus accrued interest, and used cash on hand to pay fees and expenses associated with 1 such issuance. The Senior Subordinated Notes bear interest at 11 /2% per annum, payable semi-annually on April 15 and October 15 of each year. The Senior Subordinated Notes mature on October 15, 2015. The Company may redeem some or all of the Senior Subordinated Notes at any time on or after October 15, 2010 at redemption prices (generally at a premium) set forth in the indenture governing the Senior Subordinated Notes. The Senior Subordinated Notes are unsecured obligations of the Company and rank junior in right of payment with the Company's existing and future senior obligations and senior to the Company's future subordinated indebtedness. The Senior Subordinated Notes are guaranteed by the same subsidiaries of the Company that guarantee the Affinion Credit Facility and the 2018 Senior Notes as discussed in Note 18Guarantor/Non-Guarantor Supplemental Financial Information. On September 13, 2006, the Company completed a registered exchange offer and exchanged all of the then-outstanding 10 /8% Senior Notes due 2013 1 1 1 and all of the then-outstanding 11 /2% Senior Subordinated Notes due 2015 into a like principal amount of 10 /8% Senior Notes due 2013 and 11 /2% Senior Subordinated Notes due 2015, respectively, that have been registered under the Securities Act of 1933, as amended. On June 5, 2009, the Company issued senior notes ("2009 Senior Notes"), with a face value of $150.0 million, for net proceeds of $136.5 million. The 1 2009 Senior Notes bore interest at 10 /8% per annum, payable semi-annually on April 15 and October 15 of each year. The 2009 Senior Notes would have matured on October 15, 2013. The Company had the option to redeem all or part of the 2009 Senior Notes at any time on or after October 15, 2009 at redemption prices (generally at a premium) set forth in the indenture governing the 2009 Senior Notes. The 2009 Senior Notes were senior unsecured obligations and ranked equally in right of payment with the Company's existing and future senior obligations and senior to the Company's existing and future senior subordinated indebtedness. The 2009 Senior Notes were guaranteed by the same subsidiaries of the Company that guaranteed the Affinion Credit Facility, the Senior Notes and the Senior Subordinated Notes as discussed in Note 18Guarantor/Non-Guarantor Supplemental Financial Information. Although the terms and covenants of the 2009 Senior Notes were substantially identical to those of the Senior Notes, the 2009 Senior Notes were not additional securities under the indenture governing the Senior Notes, were issued under a separate indenture, did not vote as a single class with the Senior Notes and did not necessarily trade with the Senior Notes. The 2009 Senior Notes were redeemed in November 2010 using the net proceeds from the offering of the 2010 Senior Notes. On October 1, 2009, the Company completed a registered exchange offer and exchanged all of the then-outstanding 2009 Senior Notes into a like principal amount of 2009 Senior Notes that have been registered under the Securities Act. As permitted in the indentures governing the Senior Notes and the 2009 Senior Notes, on November 8, 2010, the Company commenced a tender offer to purchase any and all of its outstanding Senior Notes and 2009 Senior Notes. Prior to the expiration date of the tender offer, approximately $409.7 million aggregate principal amount of the Senior Notes and 2009 Senior Notes were tendered. The Company paid a total of $426.0 million, including $4.4 million of accrued and unpaid interest, in consideration for the Senior Notes and 2009 Senior Notes tendered. Upon completion of the tender offer, the Company redeemed the remaining $44.3 million outstanding Senior Notes and 2009 Senior Notes at an aggregate cost of F-20
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$46.3 million, including accrued and unpaid interest of $0.8 million. The Company recognized a loss on the extinguishment of the Senior Notes and 2009 Senior Notes of $29.6 million. The Affinion Credit Facility, the 2018 Senior Notes and the Senior Subordinated Notes all contain restrictive covenants related primarily to the Company's ability to distribute dividends, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. The Company may pay dividends of up to $35.0 million in the aggregate provided that no default or event of default has occurred or is continuing, or would result from the dividend. Payment of additional dividends requires the satisfaction of various conditions, including meeting defined leverage ratios and a defined fixed charge coverage ratio, and the total dividend paid cannot exceed a calculated amount of defined available free cash flow. The covenants in the Affinion Credit Facility also require compliance with a consolidated leverage ratio and an interest coverage ratio. During the years ended December 31, 2010, 2009 and 2008, the Company paid cash dividends to its parent company of $119.8 million, $25.1 million and $37.0 million, respectively, and also paid a $1.1 million in-kind dividend in the form of Affinion Holdings debt during the year ended December 31, 2009. The Company was in compliance with the covenants referred to above as of December 31, 2010. Payment under each of the debt agreements may be accelerated in the event of a default. Events of default include the failure to pay principal and interest when due, covenant defaults (unless cured within applicable grace periods, if any), events of bankruptcy and, for the Affinion Credit Facility, a material breach of representation or warranty and a change of control. Debt issuance costs related to the various debt instruments are being amortized to interest expense over the term of the applicable debt issue using the effective interest rate method. The unamortized debt issuance costs totaled $37.2 million and $22.5 million as of December 31, 2010 and 2009, respectively, and are included in other non-current assets on the consolidated balance sheets. The debt discounts and premiums are also being amortized to interest expense over the term of the applicable debt issue using the effective interest rate method. The Company also leases certain equipment under capital leases expiring through 2015. The aggregate maturities of debt, including capital leases, as of December 31, 2010 are as follows:
Amount

2011 2012 2013 2014 2015 Thereafter

9.1 9.1 9.1 9.0 364.3 1,299.7 1,700.3

On October 5, 2010, Affinion Holdings issued $325.0 million aggregate principal amount of 11.625% Senior Notes due November 2015. Affinion Holdings used a portion of the proceeds of $320.3 million (net of issue discount), along with proceeds from a cash dividend from the Company in the amount of $115.3 million, to repay its senior unsecured term loan. A portion of the remaining proceeds from the offering of the 11.625% Senior Notes were utilized to pay related fees and expenses of approximately $6.7 million, with the balance retained for general corporate purposes. The indenture governing Affinion Holdings' 11.625% Senior Notes contains restrictive covenants related primarily to the Company's and Affinion Holdings' ability to distribute dividends, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. During the years ended December 31, 2010, 2009 and 2008, the Company made dividend distributions to Affinion Holdings of $119.8 million, $19.2 million and $37.0 million, respectively, to enable Affinion Holdings to service its debt. The Company expects that, in the future, to the extent that it is permitted contractually and legally to pay cash dividends to Affinion Holdings, Affinion Holdings may require the Company to pay cash dividends to enable Affinion Holdings to service its net cash obligations under the loan facility. The Company and its subsidiaries do not guarantee Affinion Holdings' 11.625% Senior Notes. 10. INCOME TAXES The income tax expense consisted of the following:
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Current: Federal State Foreign

(2.0) (4.0)

(2.2) (6.0)

(0.5) (5.5)

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Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

(6.0) Deferred: Federal State Foreign Total income tax expense $ (7.7) 0.6 0.3 (6.8) (12.8)

(8.2) (6.8) (0.9) 4.2 (3.5) (11.7)

(6.0) (6.6) (1.6) 6.7 (1.5) (7.5)

Pre-tax loss for domestic and foreign operations before minority interests consisted of the following:
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Domestic Foreign Pre-tax loss

$ $

(117.9) (10.9) (128.8)

$ $

(15.8) (21.6) (37.4)

$ $

(84.6) 4.1 (80.5)

Deferred income tax assets and liabilities consisted of the following:

December 31, 2010 2009

Current deferred income tax assets: Accrued expenses and deferred revenue Provision for doubtful accounts Other Current deferred income tax assets Current deferred income tax liabilities: Profit-sharing receivables from insurance carriers Accrued expenses Prepaid expenses Current deferred income tax liabilities Valuation allowance Current net deferred income tax asset Non-current deferred income tax assets: Net operating loss carryforwards State net operating loss carryforwards Depreciation and amortization Other Foreign tax credits Non-current deferred income tax assets Non-current deferred income tax liabilities: Other Depreciation and amortization Non-current deferred income tax liabilities Valuation allowance Non-current net deferred income tax liability (net of non-current deferred income tax asset included in other non-current assets on the December 31, 2010 and 2009 consolidated balance sheet of $3.0 and $2.5, respectively)

$ 65.7 $ 53.4 0.2 0.5 14.5 6.8 80.4 60.7 (18.2) 2.2 (20.9) (36.9) (42.9) $ 0.6 $ (28.1) 0.3 (20.2) (48.0) (12.1) 0.6

$ 89.6 $ 85.2 8.8 7.4 555.8 496.6 1.9 1.0 21.1 18.0 677.2 608.2 0.1 0.2 (323.1) (261.1) (323.0) (260.9) (405.4) (379.4) $ (51.2) $ (32.1)

For federal and state income tax purposes, the Apollo Transactions are treated as a purchase of assets and an assumption of liabilities at fair market value. Certain liabilities recognized for financial statement reporting purposes are not recognized for federal and state income tax purposes with respect to the Apollo Transactions and give rise to future income tax deductions. Therefore, the differences between the values allocated to the assets and liabilities under purchase accounting and the tax bases of the respective assets and liabilities give rise to a net deferred tax asset of approximately $3.6 million as of October 17, 2005. A valuation allowance of approximately $3.3 million was recognized in purchase accounting since it is more likely than not that these net deferred tax assets will not be realized. Goodwill arising from the Apollo Transactions is deductible for tax purposes. F-22

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With respect to the Apollo Transactions, for foreign income tax purposes, a deferred tax liability was established in purchase accounting of approximately $32.4 million to reflect the difference between the values allocated to the assets and liabilities for financial reporting purposes with respect to the foreign entities and the related local income tax values of such assets and liabilities. As of December 31, 2010, Affinion Holdings and its subsidiaries had federal net operating loss carryforwards of approximately $428.7 million (which will expire in 2025 through 2030) and foreign tax credit carryovers of approximately $21.1 million (which will expire in 2015 through 2020). Affinion Holdings and its subsidiaries have state net operating loss carryforwards of approximately $229.7 million (which expire, depending on the jurisdiction, between 2011 and 2030) and state tax credits of $2.0 million (which expire between 2011 and 2014). A full valuation allowance has been recognized with respect to these carryforwards and credits because it is more likely than not that these assets will not be realized. Affinion Holdings and its subsidiaries also have net operating loss carryforwards in foreign jurisdictions. These net operating losses total approximately $38.7 million (of the net operating losses that expire, expiring between 2011 and 2025). Affinion Holdings and its subsidiaries have concluded that a valuation allowance relating to approximately $37.4 million of these net operating losses is required due to the uncertainty of their realization. The net operating losses for tax return purposes are different than the net operating losses for financial statement purposes, due to the reduction of net operating losses for financial statement purposes, primarily due to uncertain tax positions. The carrying value of Affinion Holdings' valuation allowance against all of its deferred tax assets at December 31, 2010 and 2009 totaled $498.2 million and $426.0 million, respectively. The increase in valuation allowance of $72.2 million is attributable to an overall increase in net deferred tax assets primarily related to net operating losses. As of December 31, 2010, the Company had federal net operating loss carryforwards of approximately $259.2 million (which will expire in 2025 through 2030) and foreign tax credit carryovers of approximately $21.1 million (which will expire in 2015 through 2020). The Company has state net operating loss carryforwards of approximately $189.9 million (which expire, depending on the jurisdiction, between 2011 and 2030) and state tax credits of $2.0 million (which expire between 2011 and 2014). A full valuation allowance has been recognized with respect to these carryforwards and credits because it is more likely than not that these assets will not be realized. The Company also has net operating loss carryforwards in foreign jurisdictions. These net operating losses total approximately $38.7 million (of the net operating losses that expire, expiring between 2011 and 2025). The Company has concluded that a valuation allowance relating to approximately $37.4 million of these net operating losses is required due to the uncertainty of their realization. The net operating losses for tax return purposes are different than the net operating losses for financial statement purposes, due to the reduction of net operating losses for financial statement purposes, primarily due to uncertain tax positions. The carrying value of the Company's valuation allowance against all its deferred tax assets at December 31, 2010 and 2009 totaled $448.3 million and $391.5 million, respectively. The increase in valuation allowance of $56.8 million is attributable to an overall increase in net deferred tax assets primarily related to net operating losses. As of December 31, 2009, Affinion Holdings and its subsidiaries had federal net operating loss carryforwards of approximately $327.7 million (which will expire in 2025 through 2029) and foreign tax credit carryovers of approximately $18.0 million (which will expire in 2015 through 2019). Affinion Holdings and its subsidiaries have state net operating loss carryforwards of approximately $162.4 million (which expire, depending on the jurisdiction, between 2010 and 2029) and state tax credits of $1.6 million (which expire between 2010 and 2013). Full valuation allowance has been recognized with respect to these carryforwards and credits because it is more likely than not that these assets will not be realized. Affinion Holdings and its subsidiaries also have net operating loss carryforwards in foreign jurisdictions. These net operating losses total approximately $45.1 million (of the net operating losses that expire, expiring between 2010 and 2024). Affinion Holdings and its subsidiaries have concluded that a valuation allowance relating to approximately $40.3 million of these net operating losses is required due to the uncertainty of their realization. The carrying value of Affinion Holdings' valuation allowance against all of its deferred tax assets at December 31, 2009 and 2008 totaled $426.0 million and $379.1 million, respectively. The increase in valuation allowance of $46.9 million is attributable to an overall increase in net deferred tax assets primarily related to net operating losses. As of December 31, 2009, the Company had federal net operating loss carryforwards of approximately $207.5 million (which will expire in 2025 through 2029) and foreign tax credit carryovers of approximately $18.0 million (which will expire in 2015 through 2019). The Company has state net operating loss carryforwards of approximately $130.9 million (which expire, depending on the jurisdiction, between 2010 and 2029) and state tax credits of $1.6 million (which expire between 2010 and 2013). Full valuation allowance has been recognized with respect to these carryforwards and credits because it is more likely than not that these assets will not be realized. The Company also has net operating loss carryforwards in foreign jurisdictions. These net operating losses total approximately $45.1 million (of the net operating losses that expire, expiring between 2010 and 2024). The Company has concluded that a valuation allowance relating to approximately $40.3 million of these net operating losses is required due to the uncertainty of their realization. The carrying value of the Company's valuation allowance against all its deferred tax assets at December 31, 2009 and 2008 totaled F-23

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$391.5 million and $348.7 million, respectively. The increase in valuation allowance of $42.8 million is attributable to an overall increase in net deferred tax assets primarily related to net operating losses. With the exception of a South African subsidiary, foreign taxable income is recognized currently for federal and state income tax purposes because such operations are entities disregarded for federal and state income tax purposes. The Company does not provide for deferred taxes on the excess of the amount for financial reporting over the tax basis in its South African subsidiary because it is essentially permanent in duration. As of December 31, 2010, there is a $1.1 million deficit in retained earnings of the South African subsidiary. The effective income tax rate differs from the U.S. federal statutory rate as follows:
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Federal statutory rate State and local income taxes, net of federal expense Change in valuation allowance and other Taxes on foreign operations at rates different than U.S. federal rates Foreign tax credits Non-deductible expenses

35.0% 1.6 (44.7) (2.3) 3.1 (2.6) (9.9)%

35.0% 15.8 (92.0) (4.0) 14.8 (0.8) (31.2)%

35.0% 1.4 (54.8) 2.1 7.3 (0.3) (9.3)%

As noted above, the effective tax rate has fluctuated significantly year over year. These fluctuations are primarily the result of the change in loss before income taxes and non-controlling interest to $128.8 million for the year ended December 31, 2010 compared to $37.4 million and $80.5 million for the years ended December 31, 2009 and 2008, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company recognized $0.2 million, $0.2 million and $0.4 million of interest in income tax expense related to uncertain tax positions arising in 2010, 2009 and 2008, respectively. The Company's gross unrecognized tax benefits decreased by $1.6 million and $1.9 million for the years ended December 31, 2010 and 2009, respectively, and increased by $2.5 million for the year ended December 31, 2008 as a result of tax positions for the applicable year. A reconciliation of the beginning and ending amount of tax reserves for uncertain tax positions for the years ended December 31, 2010, 2009 and 2008 is as follows:
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Unrecognized tax benefits January 1 Gross increase prior period tax positions Gross decrease prior period tax positions Gross increase current period tax positions Gross decrease current period tax positions Unrecognized tax benefits December 31

9.9 0.2 (1.8) 8.3

11.8 0.4 0.2 (2.5) 9.9

9.3 2.0 (1.1) 2.5 (0.9) 11.8

The Company's income tax returns are periodically examined by various tax authorities. In connection with these and future examinations, certain tax authorities, including the Internal Revenue Service, may raise issues and impose additional assessments. The Company regularly evaluates the likelihood of additional assessments resulting from these examinations and establishes liabilities, through the provision for income taxes, for potential amounts that may result therefrom. The recognition of uncertain tax benefits are not expected to have a material impact on the Company's effective tax rate or results of operations. Federal, state and local jurisdictions are subject to examination by the taxing authorities for all open years as prescribed by applicable statute. For significant foreign jurisdictions, tax years in Germany and the U.K. remain open. No income tax waivers have been executed that would extend the period subject to examination beyond the period prescribed by the statute. The Company does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will change significantly within the next 12 months. Any income tax liabilities or refunds relating to periods prior to October 17, 2005 are the responsibility of Cendant. 11. COMMITMENTS AND CONTINGENCIES Leases The Company has noncancelable operating leases covering various facilities and equipment. Rent expense totaled $16.4 million for the year ended December 31, 2010, $13.4 million, net of sublease rental income of $0.1 million, for the year F-24

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ended December 31, 2009 and $13.1 million, net of sublease rental income of $0.4 million, for the year ended December 31, 2008. At both December 31, 2009 and 2008, the Company has accrued $1.1 million included in other long-term liabilities on the consolidated balance sheets, in connection with asset retirement obligations relating to its leased facilities. Future minimum lease payments required under non-cancelable operating leases, net of sublease receipts, as of December 31, 2010 are as follows:
Amount

2011 2012 2013 2014 2015 Thereafter Future minimum lease payments Litigation

16.5 15.8 15.6 13.2 12.4 71.0 144.5

In the ordinary course of business, the Company is involved in claims, legal proceedings and governmental inquiries related to employment matters, contract disputes, business practices, trademark and copyright infringement claims and other commercial matters. The Company is also a party to lawsuits which were brought against the Company and its affiliate and which purport to be a class action in nature and allege that the Company violated certain federal or state consumer protection statutes (as described below). The Company intends to vigorously defend itself against such lawsuits. On November 12, 2002, a class action complaint (the "November 2002 Class Action") was filed against Sears, Roebuck & Co., Sears National Bank, Cendant Membership Services, Inc., and Allstate Insurance Company in the Circuit Court of Alabama for Greene County alleging, among other things, breach of contract, unjust enrichment, breach of duty of good faith and fair dealing and violations of the Illinois consumer fraud and deceptive practices act. The case was removed to the U.S. District Court for the Northern District of Alabama but was remanded to the Circuit Court of Alabama for Greene County. The Company has filed a motion to compel arbitration, which was granted by the court on January 31, 2008. In granting the Company's motion, the court further ordered that any arbitration with respect to this matter take place on an individual (and not class) basis. On February 28, 2008, plaintiffs filed a motion for reconsideration of the court's order. On April 9, 2010, the Court denied the plaintiffs' motion for reconsideration. The time for plaintiffs to file an appeal has expired and, to date, no arbitration claim has been filed by plaintiffs. On June 17, 2010, a class action complaint was filed against the Company and Trilegiant in the United States District Court for the District of Connecticut. The complaint asserts various causes of action on behalf of a putative nationwide class and a California-only subclass in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, Connecticut Unfair Trade Practices Act, California Consumers Legal Remedies Act, and California False Advertising Law. On September 29, 2010, the Company filed a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 24, 2011, the court denied the Company's motion. The case is currently pending before the court. There has been limited discovery and motion practice to date. On November 10, 2010, a class action complaint was filed against the Company, Trilegiant, 1-800-Flowers.com, and Chase Bank USA, N.A. in the United States District Court for the Eastern District of New York. The complaint asserts various causes of action on behalf of several putative nationwide classes that largely overlap with one another. The claims asserted are in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act, Connecticut Unfair Trade Practices Act, and New York's General Business Law. On January 28, 2011, pursuant to the court's motion procedures, the Company filed a letter seeking permission to file a motion to compel arbitration of all of the claims asserted in the lawsuit. On February 16, 2011, the court entered a briefing schedule on the Company's proposed motion, which requires that all briefing be concluded by June 8, 2011. The court did not indicate when it would rule on such motion. The Company and Trilegiant are also a party to lawsuits arising out of the inquiries made by state attorneys general relating to the marketing of Trilegiant's membership programs. On October 14, 2010, the Company and Trilegiant filed a declaratory relief action against the State of South Carolina, in the Court of Common Pleas of South Carolina for the County of Richland, Fifth Judicial Circuit, seeking a declaratory judgment that their marketing practices comply with South Carolina law. The Company and Trilegiant also seek a declaratory judgment that the State may not appoint private counsel to bring an action against the Company and Trilegiant on the State's behalf. The State has filed a motion to dismiss both requests for declaratory judgment. The court has not yet ruled on the State's motion. In response to the action commenced by the Company and Trilegiant on December 17, 2010, the State F-25

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of South Carolina appointed private counsel and filed a civil action against the Company and Trilegiant, in the Court of Common Pleas of South Carolina for the County of Spartanburg, Seventh Judicial Circuit under the South Carolina Unfair Trade Practices Act, seeking civil penalties, restitution and an injunction. On December 31, 2010, the State filed its First Amended Complaint naming the Company, Trilegiant, and certain current and former officers as defendants. Also on December 31, 2010, the State filed its Notice of Motion and Motion for a Temporary Injunction. The parties have agreed to informally "stay" all of the above proceedings to attempt to resolve the matters through settlement. On November 24, 2010, the State of Iowa filed an action against the Company, Trilegiant, and the Company's Chief Executive Officer, in the Iowa District Court for Polk County. The State alleges violations of Iowa's Buying Club Law and Consumer Fraud Act, and seeks injunctive relief as well as monetary relief. The State has not yet formally served its complaint on defendants because the parties are discussing possible steps toward resolution. Based on the representations made by the State, the Company expects its Chief Executive Officer to be removed as a defendant in the complaint. Other Contingencies On May 27, 2009, the U.S. Senate Committee on Commerce, Science, and Transportation (the "Committee") initiated an investigation into Webloyalty Holdings, Inc. ("Webloyalty") and Vertrue Inc., a competitor of the Company, in connection with their e-commerce marketing practices, including those relating to consumers' account number acquisition. On July 10, 2009, the Committee expanded the scope of its investigation to include the Company. In the course of such investigation, the Committee requested that the Company provide certain information about its domestic online marketing practices, including those relating to the acquisition of consumers' credit or debit card account numbers automatically from its partners when a consumer enrolls in one of its programs immediately after making a purchase through one of its partners' web sites ("Online Data-pass Marketing"). On January 6, 2010, the Company sent a letter to the Committee informing them of its decision, after careful consideration of the fluid and iterative nature of the internet, to cease Online Data-pass Marketing for its membership programs and make certain additional changes to the disclosures in the Company's online marketing and fulfillment. Specifically, the Company, when marketing its membership programs online, now require consumers to provide all 16 digits of their credit or debit card when enrolling in the Company's membership programs in the online post-transaction environment. On December 29, 2010, legislation entitled the "Restore Online Shoppers' Confidence Act" was enacted. The legislation prohibits Online Data-pass Marketing and requires additional disclosure relating to the online marketing of, and billing for, membership programs in the online post-transaction environment. Since the Company had ceased Online Data-pass Marketing more than eleven months prior to the enactment of such legislation, it does not expect such legislation to have a material adverse effect on its business. In addition, between December 2008 and December 2010, the Company received inquiries from numerous state attorneys general relating to the marketing of its membership programs and its compliance with consumer protection statutes. The Company has responded to the states' request for documents and information and is in active discussions with such states regarding their investigations and the resolution of these matters. Settlement of such matters may include payment by the Company of the costs of the states' investigation, restitution to consumers and injunctive relief. In that regard, in August 2010, the Company entered into a voluntary Assurance of Discontinuance with the New York Attorney General's Office. Pursuant to that settlement, the Company agreed to cease in New York its online marketing practices relating to the acquisition of consumers' credit or debit card account numbers automatically from its retailer or merchant marketing partners when a consumer enrolls in one of the Company's programs after making a purchase through one of such partners' web sites as previously agreed to with the U.S. Senate Committee on Commerce, Science and Transportation on January 6, 2010. Additionally, the Company agreed, among other things, with the New York Attorney General's Office to cease in New York "live check" marketing whereby a consumer enrolls in a program or service by endorsing and cashing a check. As part of such settlement, the Company paid $3.0 million in fees, costs, and penalties and approximately $1.6 million as restitution to New York consumers in addition to refund claims. The Company will pay the remaining restitution owed to New York consumers, which amount is not expected to be material, in fiscal year 2011. The Company believes that the amount accrued for the matters discussed above under Litigation and Other Contingencies is adequate (see Note 8 Accounts Payable and Accrued Expenses) and the reasonably possible loss beyond the amount accrued will not have a material adverse effect on its financial condition, results of operations, or cash flows based on information currently available. However, litigation is inherently unpredictable and, although the Company believes F-26

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that accruals are adequate and it intends to vigorously defend itself against such matters, unfavorable resolution could occur, which could have a material adverse effect on its financial condition, results of operations or cash flows. Other Commitments In the ordinary course of business, the Company enters into purchase agreements for its marketing and membership program support and travel services. The commitments covered by these agreements as of December 31, 2010 totaled approximately $15.5 million for 2011, $5.2 million for 2012 and $1.0 million for 2013. In December 2009, the Company entered into an operating lease for a new 140,000 square foot headquarters facility. The lease term for the new headquarters facility extends to 2024. The Company commenced occupancy of the new facility in April 2010. As a result of vacating the prior headquarters facility, the Company recognized a charge during the year ended December 31, 2010 of $8.0 million, comprised principally of future lease costs and related expenses for the prior headquarters facility. At December 31, 2010, $6.8 million related to these facility exit costs is included in other long-term liabilities on the consolidated balance sheet. Surety Bonds and Letters of Credit In the ordinary course of business, the Company is required to provide surety bonds to various state authorities in order to operate its membership, insurance and travel agency programs. As of December 31, 2010, the Company provided guarantees for surety bonds totaling approximately $11.9 million and issued letters of credit totaling $6.9 million. 12. SHARE-BASED COMPENSATION In connection with the closing of the Apollo Transactions on October 17, 2005, Affinion Holdings adopted the 2005 Stock Incentive Plan (the "2005 Plan"). The 2005 Plan authorizes the Board of Directors (the "Board") of Affinion Holdings to grant non-qualified, non-assignable stock options and rights to purchase shares of Affinion Holdings common stock to directors and employees of, and consultants to, Affinion Holdings and its subsidiaries. Options granted under the 2005 Plan have an exercise price no less than the fair market value of a share of the underlying common stock on the date of grant. Stock awards have a purchase price determined by the Board. The Board was authorized to grant up to 4.9 million shares of its common stock under the 2005 Plan over a ten year period. As discussed below, no additional grants may be made under Affinion Holdings' 2005 Plan on or after November 7, 2007, the effective date of the 2007 Plan, as defined below. In November 2007, Affinion Holdings adopted the 2007 Stock Award Plan (the "2007 Plan"). The 2007 Plan authorizes the Board to grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of these awards to directors and employees of, and consultants to, Affinion Holdings and its subsidiaries. Unless otherwise determined by the Board of Directors, options granted under the 2007 Plan will have an exercise price no less than the fair market value of a share of the underlying common stock on the date of grant. Stock awards have a purchase price determined by the Board. The Board was authorized to grant up to 10.0 million shares of Affinion Holdings' common stock under the 2007 Plan over a ten year period. As of December 31, 2010, there were 7.6 million shares available under the 2007 Plan for future grants. For employee stock awards, the Company recognizes compensation expense, net of estimated forfeitures, over the requisite service period, which is the period during which the employee is required to provide services in exchange for the award. The Company has elected to recognize compensation cost for awards with only a service condition and a graded vesting schedule on a straight-line basis over the requisite service period of the entire award. Stock Options During 2010, 2009 and 2008, 0.1 million, 0.9 million and 0.2 million stock options, respectively, were granted to employees pursuant to the 2007 Plan. The stock options granted in 2010, 2009 and 2008 had exercise prices of $12.63, $15.25 and $13.02, respectively, equal to the estimated fair market value of a share of the underlying common stock on the date of grant. The stock options granted to employees from the 2007 Plan have the following terms: Vesting period Option term Ratably over 4 years 10 years

During 2010 and 2009, Affinion Holdings granted less than 0.1 million stock options and 0.1 million stock options, respectively, to members of the Board of Directors with exercise prices of $12.63 and $15.25, respectively, equal to the estimated fair value of a share of the underlying common stock on the dates of grant. These options were fully vested as of F-27

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the date of grant and have a 10-year option term. During 2008, there were no stock options granted to members of the Board of Directors. The fair value of each option award issued pursuant to the 2007 Plan during the years ended December 31, 2010, 2009 and 2008 was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions in the following table. Expected volatilities are based on historical volatilities of comparable companies. The expected term of the options granted represents the period of time that options are expected to be outstanding, and is based on the average of the requisite service period and the contractual term of the option.
2010 Grants 2009 Grants 2008 Grants

Expected volatility Expected life (in years) Risk-free interest rate Expected dividends

66% 6.25 2.79%

66% 6.25 2.24%

48% 6.25 3.89%

A summary of option activity is presented below (number of options in thousands):

2005 Plan Grants to Employees Tranche A 2005 Plan Grants to Employees Tranche B 2005 Plan Grants to Employees Tranche C

Grants to Board of Directors

2007 Plan Grants to Employees

Outstanding options at January 1, 2008 Granted Exercised Forfeited or expired Outstanding options at December 31, 2008 Granted Exercised Forfeited or expired Outstanding options at December 31, 2009 Granted Exercised Forfeited or expired Outstanding options at December 31, 2010 Vested or expected to vest at December 31, 2010 Exercisable options at December 31, 2010 Weighted average remaining contractual term (in years) Weighted average grant date fair value per option 2008 Weighted average grant date fair value per option 2009 Weighted average grant date fair value per option 2010 $

2,120 (3) (76) 2,041 (233) 1,808 (3) (154) 1,651 1,651 1,570 5.0 $

1,056 (53) 1,003 (103) 900 (93) 807 807 5.0 $

1,056 (53) 1,003 (103) 900 (93) 807 807 5.0 $ $ $

318 318 108 426 15 441 441 441 6.6 9.44 7.94 $ $ $

642 189 (52) 779 904 (62) 1,621 100 (209) 1,512 1,512 607 7.8 6.74 9.44 7.94

The weighted average exercise price of outstanding options at December 31, 2010 and 2009 was $5.67 and $5.59, respectively. The weighted average exercise price of options granted exercised and forfeited during 2010 were $12.63, $1.43 and $6.31, respectively. Based on the estimated fair values of options granted, stock compensation expense for the years ended December 31, 2010, 2009 and 2008 totaled $4.2 million, $5.0 million and $2.9 million, respectively. As of December 31, 2010, there was $4.6 million of unrecognized compensation cost related to unvested stock options, which will be recognized over a weighted average period of approximately 1.1 years. Restricted Stock In January 2007, the Board granted 21,000 shares of restricted stock of Affinion Holdings with a purchase price of $0.01 per share to the Company's former Chief Financial Officer. The award would have vested 100% upon the earlier of three years of service or a change in control of Affinion Holdings. The fair value of the award was estimated to be $0.2 million, based upon the estimated grant date fair value per share of common stock of Affinion Holdings, and was being amortized on a straight-line basis to general and administrative expense over the service period. In January 2009, this grant was forfeited. In May 2007, the Board granted 42,000 shares of restricted stock of Affinion Holdings with a purchase price of $0.01 per share to Affinion International's Chief Financial Officer. The award vested 100% upon the earlier of three years of service or a change in control of Affinion Holdings. The fair value of the award was estimated to be $0.4 million, based upon the estimated grant date fair value per share of common stock of Affinion Holdings, and was being amortized on a straight-line basis to general and administrative expense over the service period. This award vested in May 2010. F-28

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A summary of restricted stock activity is presented below (number of shares of restricted stock in thousands):
Weighted Average Grant Date Fair Value

Number of Restricted Shares

Outstanding restricted unvested awards at January 1, 2008 Granted Vested Forfeited Outstanding restricted unvested awards at December 31, 2008 Granted Vested Forfeited Outstanding restricted unvested awards at December 31, 2009 Granted Vested Forfeited Outstanding restricted unvested awards at December 31, 2010 Weighted average remaining contractual term (in years)

63 $ 63 (21) 42 (42) $

9.52 9.52 9.52 9.52

Based on the estimated fair values of restricted stock granted, stock compensation expense for the years ended December 31, 2010 and 2008 totaled $0.1 million and $0.2 million, respectively. There was no stock compensation expense recognized for the year ended December 31, 2009 related to restricted stock grants. As of December 31, 2010, there was no unrecognized compensation cost related to restricted stock granted. Restricted Stock Units On January 13, 2010, the Board's Compensation Committee approved the Amended and Restated 2010 Retention Award Program (the "RAP"), which provides for awards of restricted stock units ("RSUs") under the 2007 Stock Award Plan and granted approximately 942,000 RSUs to key employees. The RSUs awarded under the RAP have an aggregate cash election dollar value of approximately $9.9 million and are subject to time-based vesting conditions that run through approximately the first quarter of 2012. Generally, the number of RSUs awarded to each participant is equal to the quotient of (i) the aggregate cash election dollar value of RSUs that will be awarded to such participant (the "Dollar Award Value") multiplied by 1.2, divided by (ii) $12.63 (i.e. the value per share of Holdings' common stock as of December 31, 2009). Upon vesting of the RSUs, participants may settle the RSUs in shares of common stock or elect to receive cash in lieu of shares of common stock upon any of the four vesting dates for such RSUs in an amount equal to one-fourth of the Dollar Award Value. In July 2010, the Board issued an additional 34,000 RSUs to key employees under the same terms. In December 2010, the Board issued 75,000 RSUs to a new key employee that vest ratably on each of the first three anniversaries of the employee's date of employment. Due to the ability of the participants to settle their awards in cash, the Company accounts for these RSUs as a liability award. A summary of restricted stock unit activity for the year ended December 31, 2010 is presented below (number of restricted stock units in thousands):
Number of Restricted Stock Units Weighted Average Grant Date Fair Value

Outstanding restricted unvested units at January 1, 2010 Granted Vested Forfeited Outstanding restricted unvested units at December 31, 2010 Weighted average remaining contractual term (in years)

1,051 $ (225) (89) 737 $ 0.8

12.63 12.63 12.63 12.63

Based on the estimated fair value of the restricted stock units granted, stock-based compensation expense for the year ended December 31, 2010 was $4.6 million. As of December 31, 2010, there was $4.1 million of unrecognized compensation cost related to the remaining vesting period of restricted stock units granted under the Plan. This cost will be recorded in future periods as stock-based compensation expense over a weighted average period of approximately 0.6 years. F-29

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13. EMPLOYEE BENEFIT PLANS The Company sponsors a domestic defined contribution savings plan that provides certain eligible employees an opportunity to accumulate funds for retirement. Under the domestic 401(k) defined contribution plan, through December 31, 2008, the Company matched the contributions of participating employees based on 100% of the first 6% of the participating employee's contributions up to 6% of the participating employee's salary. In 2009 and 2010, the Company matched the contributions of participating employees based on 100% of the first 4% of the participating employee's contributions up to 4% of the participating employee's salary under the domestic 401(k) defined contribution plan. The Company also sponsors certain other international defined contribution retirement plans that are customary in each local country. Under these local country defined contribution plans, the Company contributes between 6% and 10% of each participating employee's salary or as otherwise provided by the plan. The Company recorded aggregate defined contribution plan expense of $5.4 million for the year ended December 31, 2010, $4.7 million for the year ended December 31, 2009 and $5.9 million for the year ended December 31, 2008. The Company sponsors certain other international defined benefit retirement plans that are customary in each local country, including a multi-employer plan in one country. Under these local country defined benefit pension plans, benefits are based on a percentage of an employee's final average salary or as otherwise described by the plan. The plans are not material, individually or in the aggregate, to the consolidated financial statements. Through April 2009, the Company maintained a deferred compensation plan that permitted certain employees to defer up to 50% of their annual base salary and 100% of earned annual incentive bonus. The plan was terminated on April 24, 2009 and in 2010, the assets were distributed to the participants. As of December 31, 2009, the assets in the plan and the corresponding liability to the participating employees were $0.8 million. 14. RELATED PARTY TRANSACTIONS Post-Closing Relationships with Cendant Cendant has agreed to indemnify the Company, Affinion Holdings and the Company's affiliates (collectively the "indemnified parties") for breaches of representations, warranties and covenants made by Cendant, as well as for other specified matters, certain of which are described below. Affinion Holdings and the Company have agreed to indemnify Cendant for breaches of representations, warranties and covenants made in the purchase agreement, as well as for certain other specified matters. Generally, all parties' indemnification obligations with respect to breaches of representations and warranties (except with respect to the matters described below) (i) are subject to a $0.1 million occurrence threshold, (ii) are not effective until the aggregate amount of losses suffered by the indemnified party exceeds $15.0 million (and then only for the amount of losses exceeding $15.0 million) and (iii) are limited to $275.1 million of recovery. Generally, subject to certain exceptions of greater duration, the parties' indemnification obligations with respect to representations and warranties survived until April 15, 2007 with indemnification obligations related to covenants surviving until the applicable covenant has been fully performed. In connection with the purchase agreement, Cendant agreed to specific indemnification obligations with respect to the matters described below. Excluded LitigationCendant has agreed to fully indemnify the indemnified parties with respect to any pending or future litigation, arbitration, or other proceeding relating to the facts and circumstances of Fortis and the accounting irregularities in the former CUC International, Inc. announced on April 15, 1998. Certain Litigation and Compliance with Law MattersCendant has agreed to indemnify the indemnified parties up to specified amounts for: (a) breaches of its representations and warranties with respect to legal proceedings that (1) occur after the date of the purchase agreement, (2) relate to facts and circumstances related to the business of AGLLC or Affinion International and (3) constitute a breach or violation of its compliance with law representations and warranties and (b) breaches of its representations and warranties with respect to compliance with laws to the extent related to the business of AGLLC or Affinion International. Cendant, Affinion Holdings and the Company have agreed that losses up to $15.0 million incurred with respect to these matters will be borne solely by the Company and losses in excess of $15.0 million will be shared by the parties in accordance with agreed upon allocations. The Company has the right at all times to control litigation related to shared losses and Cendant has consultation rights with respect to such litigation. The Company will retain all liability with respect to the November 2002 Class Action and will not be indemnified by Cendant for losses related thereto. F-30

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Prior to 2009, Cendant (i) distributed the equity interests it previously held in its hospitality services business ("Wyndham") and its real estate services business ("Realogy") to Cendant stockholders and (ii) sold its travel services business ("Travelport") to a third party. Cendant continues as a re-named publicly traded company which owns the vehicle rental business ("Avis/Budget," together with Wyndham and Realogy, the "Cendant Entities"). Subject to certain exceptions, Wyndham and Realogy have agreed to share Cendant's contingent and other liabilities (including its indemnity obligations to the Company described above and other liabilities to the Company in connection with the Apollo Transactions) in specified percentages. If any Cendant Entity defaults in its payment, when due, of any such liabilities, the remaining Cendant Entities are required to pay an equal portion of the amounts in default. Wyndham continues to hold a portion of the preferred stock and warrants issued in connection with the Apollo Transactions, while Realogy was subsequently acquired by an affiliate of Apollo. The Company entered into agreements pursuant to which the Company will continue to have cost-sharing arrangements with Cendant and/or its subsidiaries relating to office space and customer contact centers. These agreements have expiration dates and financial terms that are generally consistent with the terms of the related intercompany arrangements prior to the Apollo Transactions. The revenue earned for such services was $1.7 million for the year ended December 31, 2008 and is included in net revenues in the consolidated statements of operations. There was no revenue earned for such services for the years ended December 31, 2010 and 2009. The expense incurred for such services was $0.4 million for the year ended December 31, 2008 and is included in operating costs in the consolidated statement of operations. There was no expense incurred for the years ended December 31, 2010 and 2009. Certain marketing agreements permit the Company to continue to solicit customers of certain Cendant subsidiaries for the Company's membership programs through various direct marketing methods. The marketing agreements generally provide for a minimum amount of marketing volume or a specified quantity of customer data to be allotted to the relevant party. The payment terms of the marketing agreements provide for either (i) a fee for each call transferred, (ii) a bounty payment for each user that enrolls in one of the Company's membership programs or (iii) a percentage of net membership revenues. These agreements generally expire in December 2010, subject to automatic one year renewal periods, and are generally terminable by the applicable Cendant party following December 31, 2007 upon six months written notice to the Company. In the event that a Cendant subsidiary terminated an agreement prior to December 31, 2010, the Cendant subsidiary was required to pay a termination fee based on the projected marketing revenues that would have been generated from such agreement had the marketing agreement been in place through December 31, 2010. During 2010, a supplemental agreement was entered into which had the effect of extending the remaining marketing agreements to December 31, 2012. The expense incurred for such services was $2.0 million, $3.1 million and $3.6 million for the years ended December 31, 2010, 2009 and 2008, respectively, and is included in marketing and commissions expense in the accompanying consolidated statements of operations. In addition, as a result of the failure by certain current and former Cendant subsidiaries to meet the specified minimum volume commitments under certain of the marketing agreements and the early termination of one of the marketing agreements by one of the Cendant subsidiaries, the Company recognized revenue of $5.4 million, $23.2 million, and $3.8 million for the years ended December 31, 2010, 2009 and 2008, respectively, which is included in net revenues in the accompanying consolidated statements of operations. Under the loyalty and rewards program administration agreements, the Company continues to administer loyalty programs for certain Cendant subsidiaries. The agreements provide for the Company to earn fees for the following services: an initial fee to implement a new loyalty program, a program administration fee, a redemption fee related to redeemed rewards and a booking fee related to travel bookings by loyalty program members. The loyalty and reward program agreements expired on December 31, 2009, subject to automatic one year renewal periods, unless a party elects not to renew the arrangement upon six months' prior written notice. A termination notice was received related to one of the programs and administration of that program ceased during 2010. The contract to administer the other program was renewed for a three year term. The amount included in net revenues in the consolidated statements of operations for such services attributable to agreements with Realogy and Wyndham was $4.7 million, $8.7 million and $10.4 million for the years ended December 31, 2010, 2009 and 2008, respectively. In connection with these agreements, the Company formed Affinion Loyalty, LLC ("Loyalty"), a specialpurpose, bankruptcy-remote subsidiary which is a wholly-owned subsidiary of Affinion Loyalty Group, Inc. ("ALG"). Pursuant to the loyalty agreements, ALG has provided a copy of the object code, source code and related documentation of certain of its intellectual property to Loyalty under a non-exclusive limited license. Loyalty entered into an escrow agreement relating to such intellectual property with Cendant and its affiliates in connection with the parties entering into the loyalty and reward agreements. Loyalty sub-licenses such intellectual property to Cendant on a non-exclusive basis but will only provide access to such intellectual property either directly or indirectly through the escrow agent in the event that ALG (i) becomes bankrupt or insolvent, (ii) commits a material, uncured breach of a loyalty and reward agreement, or (iii) transfers or assigns its intellectual property in such a way as to prevent it from performing its obligations under any agreement relating to Cendant's loyalty and rewards programs. Upon access to the escrowed materials, Cendant will be able to use the escrowed materials for a limited term and for only those purposes for which ALG was using it to provide the services under the loyalty and reward agreements prior to the release of the escrowed materials to Cendant. F-31

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On June 30, 2008, the Company entered into an Assignment and Assumption Agreement ("AAA") with Avis/Budget, Wyndham and Realogy. Prior to this transaction, the ex-Cendant entities provided certain loyalty program-related benefits and services to credit card holders of a major financial institution and received a fee from this financial institution based on spending by the credit card holders. Under the AAA, the Company assumed all of the liabilities and obligations of the ex-Cendant entities relating to the loyalty program, including the fulfillment of the then-outstanding loyalty program points obligations. In connection with the transaction, on the June 30, 2008 closing date, the Company received cash and receivables with a fair value substantially equivalent to the fair value of the fulfillment obligation relating to the loyalty program points outstanding as of the closing date. The receivables are due and payable to the Company over a three year period following the closing date. Affinion International entered into an agreement pursuant to which it agreed to continue to use RCI Europe as its exclusive provider of travel services for the benefit of Affinion International members in the U.K., Germany, Switzerland, Austria, Italy, Belgium, Luxembourg, Ireland and the Netherlands. Pursuant to this agreement, RCI had a right of first refusal to offer travel services in other countries where Affinion International members are located. Affinion International indemnified RCI in the event its profit margin under this arrangement fell below 1.31%. Under the terms of the agreement, RCI Europe elected to terminate the agreement for convenience. As such, the agreement terminated on October 31, 2008. The expense for such services was $4.3 million for the year ended December 31, 2008 and is included in operating costs in the consolidated statements of operations. On August 22, 2008, the Company entered into an agreement to acquire certain assets and assume certain liabilities of RCI Europe. The acquisition closed during the fourth quarter of 2008 for nominal consideration. Under the agreement, the Company acquired all of the assets and all of the liabilities of RCI Europe's travel services business that served the Company's customers in Europe. Following this acquisition, the Company provides travel services directly to its customers. The Company entered into agreements pursuant to which the Company will continue to have cost-sharing arrangements with RCI Europe relating to office space and certain other transition services. The revenue earned for such services was $0.2 million, $0.2 million and less than $0.1 million for the years ended December 31, 2010, 2009 and 2008, respectively, and is included in net revenues in the consolidated statements of operations. The expense incurred for such services was $1.1 million, $1.1 million and $0.1 million for the years ended December 31, 2010, 2009 and 2008, respectively, and is included in operating costs in the consolidated statement of operations. The Company earns referral fees from Wyndham for hotel stays and travel packages. The amount included in net revenues in the consolidated statements of operations for such services was $1.1 million, $1.0 million and $1.5 million for the years ended December 31, 2010, 2009 and 2008, respectively. Other Agreements On October 17, 2005, Apollo entered into a consulting agreement with the Company for the provision of certain structuring and advisory services. The consulting agreement will also allow Apollo and its affiliates to provide certain advisory services for the period of twelve years or until Apollo owns less than 5% of the beneficial economic interests of the Company, whichever is earlier. The agreement may be terminated earlier by mutual consent. The Company is required to pay Apollo an annual fee of $2.0 million for these services commencing in 2006. The amount expensed related to this consulting agreement was $2.0 million for each of the years ended December 31, 2010, 2009 and 2008 and is included in general and administrative expenses in the consolidated statements of operations. If a transaction is consummated involving a change of control or an initial public offering, then, in lieu of the annual consulting fee and subject to certain qualifications, Apollo may elect to receive a lump sum payment equal to the present value of all consulting fees payable through the end of the term of the consulting agreement. In addition, the Company may engage Apollo to provide certain services if it engages in any merger, acquisition or similar transaction. If the Company engages another party to provide these services, the Company may be required to pay Apollo a transaction fee. The Company will also indemnify Apollo and its affiliates and their directors, officers and representatives for potential losses relating to the services to be provided under the consulting agreement. During 2006 Apollo acquired one of the Company's vendors, SOURCECORP Incorporated, that provides document and information services and litigation settlement administration services to the Company. The fee incurred for these services for the years ended December 31, 2010, 2009 and 2008 was $1.1 million, $1.2 million and $1.4 million, respectively, and is included in operating expenses in the consolidated statements of operations. On June 11, 2009, the Company utilized cash on hand and available funds under its revolving credit facility to purchase $64.0 million face amount of Affinion Holdings' outstanding debt from an affiliate of Apollo for $44.8 million. As a result of Affinion Holdings' election to pay interest by adding such interest to the principal amount of the debt for the interest periods ended September 1, 2009, February 26, 2010 and August 30, 2010, the Company increased the carrying F-32

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amount of the debt securities by $7.4 million, including $6.1 million and $1.3 million during the years ended December 31, 2010 and 2009, respectively. Through October 2010, these debt securities, along with an additional $5.0 million of debt securities purchased from a third-party for $4.4 million in November, 2009, were classified as held-to-maturity debt securities and were included in other non-current assets on the December 31, 2009 balance sheet at their aggregate amortized cost of $54.9 million. In October 2010, Affinion Holdings redeemed its outstanding debt and the Company received proceeds of $78.9 million. The excess of the proceeds in the amount of $11.2 million over the Company's carrying amount of $67.7 million at the time of the redemption was treated as a capital contribution for accounting purposes. On January 28, 2010, the Company acquired an ownership interest of approximately 5% in Alclear Holdings, LLC ("Alclear") for $1.0 million. A family member of one of the Company's directors controls and partially funded Alclear and serves as its chief executive officer. The Company provided support services to Alclear and recognized revenue of $0.7 million for the year ended December 31, 2010. 15. FINANCIAL INSTRUMENTS Interest Rate Swaps The Company entered into an interest rate swap as of December 14, 2005. This swap converted a notional amount of the Company's floating rate debt into a fixed rate obligation. The notional amount of the swap was $150.0 million through the swap period ended December 31, 2009 and on January 1, 2010 reduced to a notional amount of $50.0 million through December 31, 2010 when the swap terminated. In January 2008, the Company entered into an interest rate swap effective February 21, 2008. This swap converted a notional amount of the Company's floating rate debt into a fixed rate obligation. The notional amount of the swap was $498.6 million through the swap period ended February 22, 2010 at which time it increased to $598.6 million through its termination date of February 21, 2011, such that, in conjunction with the swap entered into in December 2005, substantially all of the Company's then-outstanding variable rate debt was converted into fixed rate debt. In January 2009, the Company entered into an interest rate swap effective February 21, 2011. The swap has a notional amount of $500.0 million and terminates on October 17, 2012. Under the swap, the Company agreed to pay a fixed rate of interest of 2.985% in exchange for receiving floating payments based on a three-month LIBOR on the notional amount for each applicable period. Each of the three interest rate swaps was recorded at fair value, either as an asset or liability. The changes in the fair value of the swaps, which are not designated as hedging instruments, are included in interest expense in the accompanying consolidated statements of operations. For the years ended December 31, 2010, 2009 and 2008, the Company recorded interest expense of $19.9 million, $13.9 million and $18.6 million, respectively, related to the interest rate swaps. As disclosed in Note 2Summary of Significant Accounting Policies, as a matter of policy, the Company does not use derivatives for trading or speculative purposes. The following table provides information about the Company's financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company's long-term debt.
Fair Value At December 31, 2010

2011

2012

2013

2014

2015

2016 and Thereafter

Total

Fixed rate debt Average interest rate Variable rate debt Average interest rate (a) Variable to fixed - Interest rate swap (b) Average pay rate Average receive rate (a) (b)

0.4 $ 0.4 $ 0.4 $ 0.2 $ 355.5 $ 9.43% 9.43% 9.43% 9.43% 9.43% $ 8.7 $ 8.7 $ 8.7 $ 8.8 $ 8.8 $ 5.00% 5.00% 5.00% 5.00% 5.00% 2.55% 0.40% 2.98% 1.00%

475.0 $ 831.9 7.88% 824.7 $ 868.4 5.00%

$ $ $

835.2 867.9 (22.1)

Average interest rate is based on rates in effect at December 31, 2010. The fair value of the interest rate swaps is included in accounts payable and accrued expenses ($3.9 million) and other long-term liabilities ($18.2 million) at December 31, 2010. The fair value has been determined after consideration of interest rate yield curves and the creditworthiness of the parties to the interest rate swaps. F-33

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Foreign Currency Forward Contract In August 2010, the Company entered into a foreign currency forward contract under which the Company agreed to sell GBP 3.5 million and receive $5.5 million thirty days after the contract date. The contract was subsequently extended for additional periods of approximately thirty days. During the year ended December, 2010, the Company recognized a realized gain of less than $0.1 million. Credit Risk and Exposure Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of receivables, profit-sharing receivables from insurance carriers, prepaid commissions and interest rate swaps. Such risk was managed by evaluating the financial position and creditworthiness of such counterparties. As of December 31, 2010 and 2009, approximately $73.7 million and $68.6 million, of the profit-sharing receivables from insurance carriers were due from one insurance carrier. Receivables and profit-sharing receivables from insurance carriers are from various marketing, insurance and business partners and the Company maintains an allowance for losses, based upon expected collectibility. Commission advances are periodically evaluated as to recovery. Fair Value The Company determines the fair value of financial instruments as follows: a. b. Cash and Cash Equivalents, Restricted Cash, Receivables, Profit-Sharing Receivables from Insurance Carriers and Accounts PayableCarrying amounts approximate fair value at December 31, 2010 and 2009 due to the short-term maturities of these assets and liabilities. InvestmentsAt December 31, 2010 and 2009, the carrying amounts of equity investments, which are included in other current assets on the consolidated balance sheets, approximate fair value, which is based on quoted market prices or other available market information. At December 31, 2009, the investment in held-to-maturity debt instruments of Affinion Holdings was included in other non-current assets on the consolidated balance sheet at amortized cost of $54.9 million. As of December 31, 2009, the fair value of the investment in held-to-maturity debt instruments was $64.8 million based on third-party indicative valuations. The debt instruments were redeemed by Affinion Holdings in October 2010 and the Company received proceeds of $78.9 million. The excess of the proceeds in the amount of $11.2 million over the Company's carrying amount of $67.7 million at the time of the redemption was treated as a capital contribution for accounting purposes. Long-Term DebtThe Company's estimated fair value of its long-term fixed-rate debt at December 31, 2010 and 2009 is based upon available information for debt having similar terms and risks. The fair value of the publicly-traded debt is the published market price per unit multiplied by the number of units held or issued without consideration of transaction costs. The fair value of the non-publicly-traded debt, substantially all of which is variable-rate debt, is based on third party indicative valuations and estimates prepared by the Company after consideration of the creditworthiness of the counterparties. Interest Rate SwapsAt December 31, 2010 and 2009, the Company's estimated fair value of its interest rate swaps, which is included in other long-term liabilities on the consolidated balance sheets, is based upon available market information. The fair value of the interest rate swaps are based on significant other observable inputs, adjusted for contract restrictions and other terms specific to the interest rate swaps. The Company primarily uses the income approach, which uses valuation techniques to convert future amounts to a single present amount. The fair value has been determined after consideration of interest rate yield curves and the creditworthiness of the parties to the interest rate swaps. The counterparties to the interest rate swaps are major financial institutions. The counterparty to the swaps entered into in 2005 and 2008 had a longterm rating of Aa1 by Moody's, A+ by Standard & Poor's and AA- by Fitch Ratings as of February 24, 2011. The counterparty to the swap entered into in 2009 had a long-term rating of Aa3 by Moody's, A+ by Standard & Poor's and Fitch Ratings as of December 31, 2010. Foreign Currency Forward ContractAt December 31, 2010, the Company's estimated fair value of its foreign currency forward contract is based upon available market information. The fair value of the foreign currency forward contract is based on significant other observable inputs, adjusted for contract restrictions and other terms specific to the foreign currency forward contract. The fair value has been determined after consideration of foreign currency exchange rates and the creditworthiness of the party to the foreign currency forward contract. The counterparty to the foreign currency forward contract is a major financial institution with a long-term rating of Aa1 by Moody's, A+ by Standard & Poor's and AA- by Fitch Ratings as of February 24, 2011. The Company does not expect any losses from non-performance by this counterparty.

c.

d.

e.

Current accounting guidance establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy in the new guidance prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, giving the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Level 1 inputs to a fair value measurement are quoted market prices (unadjusted) in active F-34

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markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. F-35

Table of Contents

The fair values of certain financial instruments as of December 31, 2010 are shown in the table below:
Fair Value Measurements at December 31, 2010 Quoted Prices in Active Markets for Identical Assets (Level 1) (in millions) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Fair Value at December 31, 2010

Trading securities (included in other current assets) Interest rate swaps (included in accounts payable and accrued expenses) Interest rate swaps (included in other long-term liabilities)

0.1 (3.9) (18.2)

0.1

(3.9) (18.2)

The fair values of certain financial instruments as of December 31, 2009 are shown in the table below:
Fair Value Measurements at December 31, 2009 Quoted Prices in Active Markets for Identical Assets (Level 1) (in millions) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Fair Value at December 31, 2009

Trading securities (included in other current assets) Interest rate swaps (included in other long-term liabilities) 16. SEGMENT INFORMATION

0.1 (19.1)

0.1

(19.1)

Management evaluates the operating results of each of its reportable segments based upon several factors, of which the primary factors are revenue and "Segment EBITDA," which the Company defines as income from operations before depreciation and amortization. The presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies. The Segment EBITDA of the Company's four reportable segments does not include general corporate expenses or. General corporate expenses include costs and expenses that are of a general corporate nature or managed on a corporate basis, including primarily share-based compensation expense and consulting fees paid to Apollo. These items have been excluded from the presentation of the Segment EBITDA for the Company's four reportable segments because they are not reported to the chief operating decision maker for purposes of allocating resources among operating segments or assessing operating segment performance. The accounting policies of the reportable segments are the same as those described in Note 2Summary of Significant Accounting Policies. Net Revenues
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Affinion North America Membership products Insurance and package products Loyalty products Eliminations Total North America Affinion International International products Total Net Revenues (a)

689.9 345.6 102.5 (3.4) 1,134.6 241.7 1,376.3

710.8 339.2 77.3 (3.7) 1,123.6 253.3 1,376.9

712.6 375.1 72.2 (4.2) 1,155.7 254.2 1,409.9

Inter-segment net revenues were not significant to the net revenues of any one segment. F-36

Table of Contents

Segment EBITDA
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Affinion North America Membership products Insurance and package products Loyalty products Total North America Affinion International International products Total products Corporate Total Segment EBITDA

109.6 94.1 32.0 235.7 29.8 265.5 (13.9) 251.6

149.2 98.1 28.0 275.3 30.2 305.5 (8.3) 297.2

129.8 127.9 22.4 280.1 31.2 311.3 (6.7) 304.6

Provided below is a reconciliation of Segment EBITDA to income from operations.

Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

Segment EBITDA Depreciation and amortization Income (loss) from operations Depreciation and Amortization

$ $

251.6 (195.2) 56.4

$ $

297.2 (201.0) 96.2

$ $

304.6 (260.2) 44.4

Year Ended December 31, 2010

Year Ended December 31, 2009

Year Ended December 31, 2008

Membership products Insurance and package products Loyalty products International products Total Depreciation and Amortization Segment Assets

87.2 64.8 11.4 31.8 195.2

86.5 71.5 12.0 31.0 201.0

129.3 83.5 12.2 35.2 260.2

December 31, 2010

December 31, 2009

Membership products Insurance and package products Loyalty products International products Total products Corporate Total Assets Capital Expenditures

536.4 367.8 228.8 217.8 1,350.8 164.4 1,515.2

541.9 422.5 126.6 285.8 1,376.8 92.6 1,469.4

Year Ended December 31, 2010

Year Ended December 31, 2009

Year Ended December 31, 2008

Membership products Insurance and package products Loyalty products International products Corporate Total Capital Expenditures

$ F-37

16.2 3.3 5.2 10.4 35.1 4.8 39.9

25.0 2.1 3.9 8.9 39.9 39.9

18.0 2.1 4.0 11.5 35.6 1.1 36.7

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Total Revenues
Year Ended December 31, 2010 Year Ended December 31, 2009 Year Ended December 31, 2008

U.S. U.K. Other Total Revenues Total Assets

1,134.6 121.5 120.2 1,376.3

1,123.6 132.3 121.0 1,376.9

1,155.7 143.2 111.0 1,409.9

December 31, 2010

December 31, 2009

U.S. U.K. Other Total Assets 17.

1,297.4 86.5 131.3 1,515.2

1,183.6 123.9 161.9 1,469.4

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Provided below is unaudited selected quarterly financial data for 2010 and 2009:
First Quarter Second Quarter Third Quarter Fourth Quarter

2010 Net revenues Marketing and commissions Operating costs General and administrative Facility exit costs Depreciation and amortization Net loss 2009 Net revenues Marketing and commissions Operating costs General and administrative Depreciation and amortization Net loss 18.

$ $ $ $ $ $ $ $ $ $ $ $ $

343.2 138.7 93.9 35.4 48.5 (12.5) 334.0 139.8 87.1 31.6 50.3 (20.1)

$ $ $ $ $ $ $ $ $ $ $ $ $

340.5 141.1 89.3 38.2 8.0 48.6 (34.5) 333.5 152.1 85.9 24.7 51.2 (2.8)

$ $ $ $ $ $ $ $ $ $ $ $ $

346.5 143.8 92.5 33.0 50.1 (13.0) 361.1 161.0 88.2 29.2 51.7 (16.0)

$ $ $ $ $ $ $ $ $ $ $ $ $

346.1 159.7 100.1 51.0 48.0 (81.6) 348.3 165.3 95.2 19.6 47.8 (10.2)

GUARANTOR/NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION

The following supplemental condensed consolidating financial information presents, in separate columns, the condensed consolidating balance sheets as of December 31, 2010 and 2009, and the related condensed consolidating statements of operations and cash flows for the years ended December 31, 2010, 2009 and 2008 for (i) the Company (Affinion Group, Inc.) on a parent-only basis, with its investment in subsidiaries recorded under the equity method, (ii) the Guarantor Subsidiaries on a combined basis, (iii) the Non-Guarantor Subsidiaries on a combined basis and (iv) the Company on a consolidated basis. The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries, all of which are 100% owned by the Company. There are no significant restrictions on the ability of the Company to obtain funds from any of its guarantor subsidiaries by dividends or loan. The supplemental financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful. F-38

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CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2010

Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Assets Current assets: Cash and cash equivalents Restricted cash Receivables, net Receivables from related parties Profit-sharing receivables from insurance carriers Prepaid commissions Income taxes receivable Intercompany loans receivable Other current assets Total current assets Property and equipment, net Contract rights and list fees, net Goodwill Other intangibles, net Investment in subsidiaries Intercompany loan receivable Intercompany receivables Other non-current assets Total assets Liabilities and Deficit Current liabilities: Current portion of long-term debt Accounts payable and accrued expenses Payables to related parties Intercompany loans payable Deferred revenue Income taxes payable Total current liabilities Long-term debt Deferred income taxes Deferred revenue Intercompany loan payable Intercompany payables Other long-term liabilities Total liabilities Total Affinion Group, Inc. deficit Non-controlling interest in subsidiary Total deficit Total liabilities and deficit

104.8 3.4 1.6 12.5 4.2 126.5 8.2 1,719.3 32.1 43.8 1,929.9

3.2 21.5 76.3 5.8 73.7 51.8 1.6 36.2 270.1 84.4 19.7 371.6 358.7 945.0 25.8 2,075.3

13.1 10.4 41.4 0.3 1.3 6.2 1.2 25.5 99.4 20.8 6.2 31.1 51.9 9.5 218.9

$ (12.5) (12.5) (1,719.3) (32.1) (945.0) (2,708.9) $

121.1 35.3 119.3 6.1 75.0 58.0 2.8 65.9 483.5 113.4 25.9 402.7 410.6 79.1 1,515.2

8.7 $ 99.1 14.6 0.1 1.0 123.5 1,684.2 943.9 44.5 2,796.1 (868.0) (868.0) 1,928.1 $ F-39

0.4 177.1 0.7 136.8 315.0 1.0 42.9 13.0 2.8 374.7 1,700.6 1,700.6 2,075.3

91.1 2.0 12.5 27.0 1.8 134.4 11.3 8.0 32.1 1.1 12.0 198.9 18.7 1.3 20.0 218.9

$ (12.5) (12.5) (32.1) (945.0) (989.6) (1,719.3) (1,719.3) (2,708.9) $

9.1 367.3 17.3 163.9 2.8 560.4 1,685.2 54.2 21.0 59.3 2,380.1 (866.2) 1.3 (864.9) 1,515.2

Table of Contents

CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2009

Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Assets Current assets: Cash and cash equivalents Restricted cash Receivables, net Receivables from related parties Profit-sharing receivables from insurance carriers Prepaid commissions Income taxes receivable Intercompany loans receivable Other current assets Total current assets Property and equipment, net Contract rights and list fees, net Goodwill Other intangibles, net Investment in subsidiaries Intercompany loan receivable Intercompany receivables Receivables from related parties Other non-current assets Total assets Liabilities and Deficit Current liabilities: Current portion of long-term debt Accounts payable and accrued expenses Payables to related parties Intercompany loans payable Deferred revenue Income taxes payable Total current liabilities Long-term debt Deferred income taxes Deferred revenue Intercompany loan payable Intercompany payables Other long-term liabilities Total liabilities Total Affinion Group, Inc. deficit Non-controlling interest in subsidiary Total deficit Total liabilities and deficit

3.9 1.1 32.5 7.2 44.7 1.0 1,578.2 34.3 28.8 1,687.0

13.6 22.1 67.2 8.6 68.6 57.4 1.6 25.2 264.3 77.0 18.2 289.4 405.6 747.1 3.5 26.8 1,831.9

52.3 12.9 43.9 2.3 3.2 7.3 0.6 20.7 143.2 20.9 16.1 29.4 68.8 64.2 342.6

$ (32.5) (32.5) (1,578.2) (34.3) (747.1) (2,392.1) $

69.8 35.0 112.2 10.9 71.8 64.7 2.2 53.1 419.7 98.9 34.3 318.8 474.4 3.5 119.8 1,469.4

19.9 $ 65.0 9.6 1.8 0.9 97.2 1,422.3 745.9 29.6 2,295.0 (608.0) (608.0) 1,687.0 $ F-40

0.3 123.5 1.3 165.5 0.1 290.7 0.9 23.0 19.1 16.8 350.5 1,481.4 1,481.4 1,831.9

92.9 3.8 32.5 31.8 5.6 166.6 11.6 11.4 34.3 1.2 19.5 244.6 96.8 1.2 98.0 342.6

$ (32.5) (32.5) (34.3) (747.1) (813.9) (1,578.2) (1,578.2) (2,392.1) $

20.2 281.4 14.7 199.1 6.6 522.0 1,423.2 34.6 30.5 65.9 2,076.2 (608.0) 1.2 (606.8) 1,469.4

Table of Contents

CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010
Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Net revenues $ $ 1,134.6 $ Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions 506.2 Operating costs 268.1 General and administrative 29.5 97.8 Facility exit costs 8.0 Depreciation and amortization 1.0 162.5 Total expenses 30.5 1,042.6 Income from operations (30.5) 92.0 Equity in income of subsidiaries 80.1 Interest income 0.3 0.3 Interest income intercompany 1.2 Interest expense (155.5) 0.3 Interest expense intercompany Loss on extinguishment of debt (37.0) Other income (expense), net 0.1 Loss before income taxes and non-controlling interest (141.4) 92.7 Income tax expense (1.2) (8.0) Net loss (142.6) 84.7 Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. $ (142.6) $ 84.7 $

241.7 $

1,376.3

77.1 107.7 30.2 31.8 246.8 (5.1) 11.0 (2.8) (1.2) (1.9) (3.6) (3.6) (1.0) (4.6) $

(80.1) (1.2) 1.2 (80.1) (80.1) (80.1) $

583.3 375.8 157.6 8.0 195.2 1,319.9 56.4 11.6 (158.0) (37.0) (1.8) (128.8) (12.8) (141.6) (1.0) (142.6)

CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009
Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Net revenues $ $ 1,123.6 $ Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions 526.7 Operating costs 246.1 General and administrative 14.4 64.1 Depreciation and amortization 170.0 Total expenses 14.4 1,006.9 Income from operations (14.4) 116.7 Equity in income of subsidiaries 91.4 Interest income 0.1 Interest income - intercompany 0.1 Interest expense (125.4) (0.6) Interest expense - intercompany Other income (expense), net 0.1 Loss before income taxes and non-controlling interest (48.3) 116.3 Income tax (expense) benefit (1.7) (8.4) Net loss (50.0) 107.9 Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. $ (50.0) $ 107.9 $ F-41

253.3 $

1,376.9

91.5 110.3 26.6 31.0 259.4 (6.1) 8.0 (3.7) (0.1) (12.1) (14.0) (1.6) (15.6) (0.9) (16.5) $

(91.4) (0.1) 0.1 (91.4) (91.4) (91.4) $

618.2 356.4 105.1 201.0 1,280.7 96.2 8.1 (129.7) (12.0) (37.4) (11.7) (49.1) (0.9) (50.0)

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CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008
Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Net revenues $ $ 1,155.7 $ Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions 549.7 Operating costs 247.5 General and administrative 11.9 69.0 Depreciation and amortization 225.0 Total expenses 11.9 1,091.2 Loss from operations (11.9) 64.5 Equity in loss of subsidiaries 62.7 Interest income 0.1 1.0 Interest expense (136.2) (2.0) Other expense net (0.1) Loss before income taxes and non-controlling interest (85.3) 63.4 Income tax (expense) benefit (3.4) (5.4) Net loss (88.7) 58.0 Less: net income attributable to non-controlling interest Net loss attributable to Affinion Group, Inc. $ (88.7) $ 58.0 $ F-42

254.2 $

1,409.9

97.2 112.5 17.5 35.2 262.4 (8.2) 0.6 (4.7) 16.4 4.1 1.3 5.4 (0.7) 4.7 $

(62.7) (62.7) (62.7) (62.7) $

646.9 360.0 98.4 260.2 1,365.5 44.4 1.7 (142.9) 16.3 (80.5) (7.5) (88.0) (0.7) (88.7)

Table of Contents

CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010
Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated

Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of favorable and unfavorable contracts Amortization of debt discount and financing costs Unrealized loss on interest rate swaps Unrealized foreign currency transaction loss Loss on extinguishment of debt Facility exit costs Share-based compensation Equity in (income) loss of subsidiaries Interest accretion on held-to-maturity debt securities Deferred income taxes Payment received for assumption of loyalty points program liability Net change in assets and liabilities: Restricted cash Receivables Receivables from and payables to related parties Profit-sharing receivables from insurance carriers Prepaid commissions Other current assets Contract rights and list fees Other non-current assets Accounts payable and accrued expenses Deferred revenue Income taxes receivable and payable Other long-term liabilities Other, net Net cash provided by operating activities Investing Activities Capital expenditures Acquisition-related payments, net of cash acquired Redemption (purchase) of held-to-maturity debt securities of Affinion Group Holdings, Inc Restricted cash Net cash used in investing activities Financing Activities Proceeds from issuance of term loan Proceeds from issuance of senior notes Deferred financing costs Repayment of term loan Redemption of senior notes Principal payments on borrowings Dividends paid to parent company Intercompany receivables and payables Intercompany loans Intercompany dividends Capitalization of subsidiary Repurchase of employee equity award of a subsidiary Distribution to non-controlling interest of a subsidiary Net cash provided by financing activities Effect of changes in exchange rates on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and Cash Equivalents, End of Period F-43

$ (142.6) $ 0.9 10.6 2.9 37.0 8.8 (80.1) (0.4) (3.4) (0.6) (3.3) 3.0 (0.1) 30.6 (1.7) 4.7 2.2 (131.5) (4.8) (4.8) 875.0 471.5 (35.5) (655.3) (467.6) (119.8) 205.5 20.0 29.7 (86.3) 237.2 100.9 3.9 $ 104.8 $

84.7 $ 162.5 (2.2) 8.0 7.4 6.5 0.6 14.8 (0.8) (5.2) 5.5 (9.7) (2.2) 4.4 17.1 (34.7) (0.1) (3.4) 253.2 (24.7) (167.8) (192.5) (0.3) (205.3) 134.5 (71.1) (10.4) 13.6 3.2 $

(3.6) $ 31.8 1.9 2.3 (6.0) 0.6 (0.5) (6.4) 1.8 0.9 (5.9) 0.3 (0.3) (7.1) (5.0) (6.9) 2.2 0.1 (10.4) (4.0) 78.9 1.5 66.0 (0.2) (20.0) (29.7) (48.2) (3.6) (1.0) (102.7) (2.6) (39.2) 52.3 13.1 $

(80.1) $ 80.1

(141.6) 195.2 (2.2) 10.6 2.9 1.9 37.0 8.0 11.1 (6.0) 7.0 6.5 (2.2) 13.7 (10.5) (3.4) 6.4 (12.6) (2.2) 4.6 47.4 (43.5) (5.1) (5.6) 4.4 121.8 (39.9) (171.8) 78.9 1.5 (131.3) 875.0 471.5 (35.5) (655.3) (467.6) (0.3) (119.8) (3.6) (1.0) 63.4 (2.6) 51.3 69.8 121.1

Table of Contents

CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2009
Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of favorable and unfavorable contracts Amortization of debt discount and financing costs Unrealized loss on interest rate swaps Unrealized foreign currency transaction loss Amortization of share-based compensation Equity in (income) loss of subsidiaries Interest accretion on held-to-maturity debt securities Deferred income taxes Payment received for assumption of loyalty points program liability Net change in assets and liabilities: Restricted cash Receivables Receivables from and payables to related parties Profit-sharing receivables from insurance carriers Prepaid commissions Other current assets Contract rights and list fees Other non-current assets Accounts payable and accrued expenses Deferred revenue Income taxes receivable and payable Other long-term liabilities Other, net Net cash provided by operating activities Investing Activities Capital expenditures Acquisition-related payments, net of cash acquired Purchase of held-to-maturity debt securities of Affinion Group Holdings, Inc. Restricted cash Net cash used in investing activities Financing Activities Proceeds from issuance of senior notes Deferred financing costs Repayments under line of credit, net Principal payments on borrowings Dividends paid to parent company Intercompany receivables and payables Intercompany loans Intercompany dividends Capitalization of subsidiary Distribution to non-controlling interest of a subsidiary Net cash provided by financing activities Effect of changes in exchange rates on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and Cash Equivalents, End of Period F-44

$ (50.0) $ 0.2 8.2 (0.9) 5.0 (91.4) 0.1 (0.6) (0.1) (3.5) 0.2 (26.5) 1.8 (0.1) 0.5 (157.1) 0.5 0.5 136.5 (4.5) (57.0) (6.4) (26.2) 192.4 (25.5) 0.5 (49.3) 160.5 3.9 $ 3.9 $

107.9 $ 169.9 (2.2) 7.6 6.7 1.7 (19.2) 2.2 28.3 (3.1) (2.6) (1.9) (16.9) 7.7 (43.3) 1.4 (0.8) (0.1) 243.3 (31.5) (2.3) 0.2 (33.6) (0.3) (198.2) (0.5) (199.0) 10.7 2.9 13.6 $

(15.6) $ 30.9 13.6 (4.3) (3.2) (0.3) (9.0) (3.1) (1.6) 1.2 (2.4) (1.2) 15.3 0.7 (0.4) (3.8) (0.2) 16.6 (8.9) (20.2) (49.2) (0.1) (78.4) 5.8 25.5 49.3 (0.7) 79.9 0.8 18.9 33.4 52.3 $

(91.4) $ 91.4

(49.1) 201.0 (2.2) 8.2 (0.9) 13.6 5.0 (4.3) 4.5 6.7 1.4 (28.8) (1.0) 26.7 (1.9) (8.5) (1.9) (17.9) (3.5) (40.8) 0.9 (4.6) 0.2 102.8 (39.9) (22.5) (49.2) 0.1 (111.5) 136.5 (4.5) (57.0) (6.7) (26.2) (0.7) 41.4 0.8 33.5 36.3 69.8

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CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2008
Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries

Eliminations

Consolidated

Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Amortization of favorable and unfavorable contracts Amortization of debt discount and financing costs Unrealized loss on interest rate swap Unrealized foreign currency transaction gain Amortization of share-based compensation Equity in (income) loss of subsidiaries Deferred income taxes Payment received for assumption of loyalty points program liability Net change in assets and liabilities: Restricted cash Receivables Receivables from and payables to related parties Profit-sharing receivables from insurance carriers Prepaid commissions Other current assets Contract rights and list fees Other non-current assets Accounts payable and accrued expenses Deferred revenue Income taxes receivable and payable Other long-term liabilities Other, net Net cash provided by operating activities Investing Activities Capital expenditures Acquisition-related payments, net of cash acquired Restricted cash Net cash used in investing activities Financing Activities Borrowings under line of credit, net Principal payments on borrowings Dividends paid to parent company Intercompany receivables and payables Intercompany loans Intercompany dividends Distribution to non-controlling interest of a subsidiary Net cash used in financing activities Effect of changes in exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and Cash Equivalents, End of Period F-45

(88.7) $ 5.9 15.9 3.1 (62.7) (0.5) (2.1) 0.5 0.3 41.5 0.4 2.8 (1.4) (85.0) (1.1) (1.1)

58.0 $ 225.0 (2.2) 8.2 7.4 (0.1) (5.7) 1.1 (38.1) 1.6 (4.5) (5.1) (1.9) (42.6) (29.2) (4.4) 0.1 (0.2) 167.4 (24.1) (0.5) (24.6) (0.3) (142.4) (0.2) (142.9) (0.1) 3.0 2.9 $

5.4 $ 35.2 (0.8) (16.5) (6.7) 1.0 (2.1) (0.7) (1.4) 3.0 (2.1) (0.8) 5.8 5.4 0.7 (5.0) 0.3 20.7 (11.5) (13.2) (8.7) (33.4) (3.1) 41.1 (0.4) 37.6 (2.7) 22.2 11.2 33.4 $

(62.7) $ (62.7)

(88.0) 260.2 (3.0) 5.9 15.9 (16.5) 3.1 1.5 7.4 0.9 (8.3) (1.7) (39.5) 4.6 (6.1) (5.1) (2.4) 4.7 (23.8) (3.3) (2.1) (1.3) 103.1 (36.7) (13.7) (8.7) (59.1) 18.5 (0.3) (37.0) (0.4) (19.2) (2.7) 22.1 14.2 36.3

18.5 (37.0) 145.5 (41.1) 0.2 86.1 $ $

Table of Contents

19. SUBSEQUENT EVENTS On January 14, 2011, the Company and Affinion Holdings entered into, and consummated, an Agreement and Plan of Merger that resulted in the acquisition of Webloyalty by the Company. In accordance with the Agreement and Plan of Merger, on January 14, 2011, the Company acquired all of the capital stock of Webloyalty, and the interest of security holders of Webloyalty immediately prior to the Merger were converted into Affinion Holdings' securities, as follows: (i) the shares of common stock of Webloyalty were converted into shares of Affinion Holdings' common stock, (ii) options to purchase shares of Webloyalty's common stock granted under Webloyalty's equity plans, whether vested or unvested, were converted into options to purchase shares of Affinion Holdings' common stock, (iii) warrants to purchase shares of Webloyalty's common stock were converted into warrants to purchase Affinion holdings' common stock and (iv) awards of restricted shares of Webloyalty's common stock (to the extent unvested) were converted into awards of restricted shares of Affinion Holdings' common stock. Webloyalty is a leading online marketing services company that provides, designs and administers online subscription loyalty solutions that offer valuable discounts, services and benefits for its subscribers and provides its clients with programs that enhance their relationships with their customers. The Company believes that the Company's and Webloyalty's product suites are highly complementary, allowing for a relatively seamless integration of benefits, as well as the opportunity to leverage the individual services and features to build a better stronger offer for the consumer and thereby enhance the value proposition for the Company's affinity marketing partners. Additionally, the significant scale of the Company's marketing operations will benefit substantially through the integration of the innovative technologies Webloyalty has created in improving the design and targeting of offers. Also, Webloyalty has a strong presence in certain European markets where the Company seeks to expand its operations and accelerate its rate of growth. In connection with the Webloyalty acquisition, Webloyalty and its domestic subsidiaries have become guarantors under the Company's senior secured 1 credit facility, the indentures governing the Company's 7.875% senior notes and 11 /2% senior subordinated notes and the indentures governing Affinion Holdings' notes. The purchase price allocation for Webloyalty is not complete as the acquisition occurred in January 2011, and the Company is still in the process of valuing the consideration paid, identifying the assets acquired and liabilities assumed and allocating the purchase price among the assets acquired and liabilities assumed. Therefore, the Company is unable to disclose pro forma revenue, loss before income taxes and non-controlling interest or preliminary purchase accounting. As of December 31, 2010, the Company had incurred $2.4 million of acquisition costs. On January 14, 2011, the Company and Apollo entered into an Amended and Restated Consulting Agreement ("Consulting Agreement"), pursuant to which Apollo and its affiliates will continue to provide Affinion with certain advisory services on substantially the same terms as the existing consulting agreement described in Note 14 Related Party Transactions, except that the annual fee paid by Affinion will increase to $2.6 million from $2.0 million, commencing January 1, 2012, with an additional one-time fee of $0.6 million being paid promptly after January 14, 2011 in respect of calendar year 2011. On January 18, 2011, the Company declared and paid a dividend of approximately $123.4 million to Affinion Holdings. Affinion Holdings used cash on hand and the proceeds of the cash dividend to (i) redeem a portion of its outstanding preferred stock, (ii) pay a cash dividend to its stockholders (including holders of restricted stock units), (iii) pay a one-time cash bonus to its option holders and (iv) pay additional amounts for transaction fees and expenses. On February 11, 2011, the Company obtained incremental term loans in an aggregate principal amount of $250.0 million under the Company's amended and restated senior secured credit facility. The Company is using the proceeds of the incremental term loans (a) for working capital and other corporate purposes, (b) to fund future strategic initiatives and (c) to pay a dividend to Affinion Holdings, to be used (i) to fund a dividend of $133.4 million to Affinion Holdings' shareholders, (ii) to fund the redemption of all of Affinion Holdings' preferred stock, (iii) for general corporate purposes, (iv) for near-term interest payments of Affinion Holdings and (v) for certain other purposes. On February 18, 2011, a class action complaint was filed against Webloyalty and one of its clients in the District Court for the Western District of Virginia. The complaint asserts various causes of action on behalf of a putative nationwide class, including unfair and deceptive acts and practices, unjust enrichment, invasion of privacy, money had and received, larceny, obtaining money by false pretense, trover, conversion, detinue, trespass, fraud, misrepresentation and computer fraud and violations under the Electronic Communications Privacy Act in connection with the sale by Webloyalty of its membership programs. The complaint was served on the Company on March 3, 2011. The Company has not yet responded to the complaint, but the Company intends to vigorously defend itself against this lawsuit. F-46

Exhibit 4.7 SUPPLEMENTAL INDENTURE NO. 6 SUPPLEMENTAL INDENTURE No. 6 (this "Supplemental Indenture"), dated as of February 11, 2011 among Webloyalty Holdings, Inc. ("WL Holdings"), a Delaware corporation and an indirect subsidiary of Affinion Group, Inc. (or its permitted successor), a Delaware corporation (the "Issuer"), Webloyalty.com, Inc. ("WL"), a Delaware corporation and an indirect subsidiary of the Issuer, Lift Media, LLC, a Delaware limited liability company and an indirect subsidiary of the Issuer ("LM", and together with WL Holdings and WL, the "Additional Subsidiary Guarantors"), the Issuer, and Wells Fargo Bank, National Association, as Trustee under the Indenture (the "Trustee"). WITNESSETH: WHEREAS the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an Indenture (the "Indenture"), dated as of April 26, 2006, providing for the issuance of Senior Subordinated Notes (the "Notes"); WHEREAS, Section 4.11 and Section 10.06 of the Indenture provide that under certain circumstances the Issuer shall cause the Additional Subsidiary Guarantors to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary Guarantors shall Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and WHEREAS, pursuant to Section 9.01(v) of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Additional Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture. SECTION 2. Guarantees. The Additional Subsidiary Guarantors hereby agree, jointly and severally with all other Guarantors, to guarantee the Issuer's obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture (including Article 11). SECTION 3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. SECTION 4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. SECTION 6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 7. Effect of Headings. The section headings herein are for convenience only and shall not effect the construction of this Supplemental Indenture. [Rest of Page Intentionally Left Blank] 2

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.

AFFINION GROUP, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer WEBLOYALTY HOLDINGS, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer WEBLOYALTY.COM, INC. By: /s/ Richard Fernandes Name: Title: LIFT MEDIA, LLC By: /s/ Richard Fernandes Name: Title:

Richard Fernandes Chief Executive Officer

Richard Fernandes Chief Operating Officer Supplemental Indenture No. 6 (Senior Sub)

WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Lynn M. Steiner Name: Title:

Lynn M. Steiner Vice President

Supplemental Indenture No. 6 (Senior Sub)

Exhibit 4.8 EXECUTION COPY

AFFINION GROUP, INC. as Issuer the GUARANTORS named herein $475,000,000 7.875% SENIOR NOTES DUE 2018 INDENTURE Dated as of November 19, 2010 WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

TABLE OF CONTENTS

Page ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions SECTION 1.02. Other Definitions SECTION 1.03. Incorporation by Reference of Trust Indenture Act SECTION 1.04. Rules of Construction ARTICLE 2 THE NOTES SECTION 2.01. Amount of Notes; Issuable in Series SECTION 2.02. Form and Dating SECTION 2.03. Execution and Authentication SECTION 2.04. Registrar and Paying Agent SECTION 2.05. Paying Agent to Hold Money in Trust SECTION 2.06. Holder Lists SECTION 2.07. Transfer and Exchange SECTION 2.08. Replacement Notes SECTION 2.09. Outstanding Notes SECTION 2.10. Temporary Notes SECTION 2.11. Cancellation SECTION 2.12. Defaulted Interest SECTION 2.13. CUSIP Numbers, ISINs, etc. SECTION 2.14. Calculation of Principal Amount of Notes ARTICLE 3 REDEMPTION SECTION 3.01. Redemption SECTION 3.02. Applicability of Article SECTION 3.03. Notices to Trustee SECTION 3.04. Selection of Notes to Be Redeemed SECTION 3.05. Notice of Optional Redemption SECTION 3.06. Effect of Notice of Redemption SECTION 3.07. Deposit of Redemption Price SECTION 3.08. Notes Redeemed in Part i 1 31 32 33

34 34 34 35 35 36 36 37 37 38 38 38 38 38

39 39 39 39 40 40 41 41

ARTICLE 4 COVENANTS SECTION 4.01. Payment of Notes SECTION 4.02. Reports and Other Information SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock SECTION 4.04. Limitation on Restricted Payments SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries SECTION 4.06. Asset Sales SECTION 4.07. Transactions with Affiliates SECTION 4.08. Change of Control SECTION 4.09. Compliance Certificate SECTION 4.10. Further Instruments and Acts SECTION 4.11. Future Guarantors SECTION 4.12. Liens SECTION 4.13. Maintenance of Office or Agency ARTICLE 5 MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default SECTION 6.02. Acceleration SECTION 6.03. Other Remedies SECTION 6.04. Waiver of Past Defaults SECTION 6.05. Control by Majority SECTION 6.06. Limitation on Suits SECTION 6.07. Rights of the Holders to Receive Payment SECTION 6.08. Collection Suit by Trustee SECTION 6.09. Trustee May File Proofs of Claim SECTION 6.10. Priorities SECTION 6.11. Undertaking for Costs SECTION 6.12. Waiver of Stay or Extension Laws ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee SECTION 7.02. Rights of Trustee ii 41 41 43 49 56 58 61 63 65 65 65 66 66

67

69 71 72 72 72 72 73 73 73 73 74 74

74 75

SECTION 7.03. Individual Rights of Trustee SECTION 7.04. Trustee's Disclaimer SECTION 7.05. Notice of Defaults SECTION 7.06. Reports by Trustee to the Holders SECTION 7.07. Compensation and Indemnity SECTION 7.08. Replacement of Trustee SECTION 7.09. Successor Trustee by Merger SECTION 7.10. Eligibility; Disqualification SECTION 7.11. Preferential Collection of Claims Against Issuer ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE SECTION 8.01. Discharge of Liability on Notes; Defeasance SECTION 8.02. Conditions to Defeasance SECTION 8.03. Application of Trust Money SECTION 8.04. Repayment to the Issuer SECTION 8.05. Indemnity for Government Obligations SECTION 8.06. Reinstatement ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of the Holders SECTION 9.02. With Consent of the Holders SECTION 9.03. Compliance with Trust Indenture Act SECTION 9.04. Revocation and Effect of Consents and Waivers SECTION 9.05. Notation on or Exchange of Notes SECTION 9.06. Trustee to Sign Amendments SECTION 9.07. Payment for Consent SECTION 9.08. Additional Voting Terms; Calculation of Principal Amount ARTICLE 10 GUARANTEES SECTION 10.01. Guarantees SECTION 10.02. Limitation on Liability; Release SECTION 10.03. Successors and Assigns SECTION 10.04. No Waiver SECTION 10.05. Modification SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors iii

76 76 77 77 77 78 79 79 79

80 81 82 82 83 83

83 84 85 85 85 86 86 86

86 88 89 89 90 90

ARTICLE 11 [INTENTIONALLY OMITTED] ARTICLE 12 [INTENTIONALLY OMITTED] ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls SECTION 13.02. Notices SECTION 13.03. Communication by the Holders with Other Holders SECTION 13.04. Certificate and Opinion as to Conditions Precedent SECTION 13.05. Statements Required in Certificate or Opinion SECTION 13.06. When Notes Disregarded SECTION 13.07. Rules by Trustee, Paying Agent and Registrar SECTION 13.08. Legal Holidays SECTION 13.09. Governing Law; Waiver of Jury Trial SECTION 13.10. No Recourse Against Others SECTION 13.11. Successors SECTION 13.12. Multiple Originals SECTION 13.13. Table of Contents; Headings SECTION 13.14. Indenture Controls SECTION 13.15. Severability SECTION 13.16. Currency of Account; Conversion of Currency; Foreign Exchange Restrictions SECTION 13.17. U.S.A. Patriot Act SECTION 13.18. Force Majeure Appendix A Rule 144A/Regulation S/IAI Appendix Exhibit 1 Form of Initial Note or Additional Notes Exhibit A Form of Exchange Note or Private Exchange Note Exhibit 2 Form of Letter of Representation Appendix B Form of Supplemental Indenture for Future Guarantors iv 90 91 91 91 92 92 92 92 92 93 93 93 93 93 93 93 95 95

CROSS-REFERENCE TABLE
TIA Section Indenture Section

310

311

312

313

314

315

316

317

318

(a)(1) (a)(2) (a)(3) (a)(4) (b) (c) (a) (b) (c) (a) (b) (c) (a) (b)(1) (b)(2) (c) (d) (a) (b) (c)(1) (c)(2) (c)(3) (d) (e) (f) (a) (b) (c) (d) (e) (a) (last sentence) (a)(1)(A) (a)(1)(B) (a)(2) (b) (a)(1) (a)(2) (b) (a)

7.10 7.10 N.A. N.A. 7.08; 7.10 N.A. 7.11 7.11 N.A. 2.06 13.03 13.03 7.06 N.A. 7.06 7.06 7.06 4.02; 4.09 N.A. 13.04 13.04 N.A. N.A. N.A. 4.10 7.01 7.05 7.01 7.01 6.11 13.06 6.05 6.04 N.A. 6.07 6.08 6.09 2.05 13.01

N.A. means Not Applicable. Note: This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture. v

INDENTURE dated as of November 19, 2010 among Affinion Group, Inc., a Delaware corporation (the "Issuer"), the Subsidiary Guarantors (as defined herein) and Wells Fargo Bank, National Association, as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of Notes issued under this Indenture. ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "11 /2% Senior Subordinated Notes" means the $355.5 million principal amount of 11 /2% Senior Subordinated Notes due 2015 that were issued by the Issuer on April 26, 2006. "Acquired Indebtedness" means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged or consolidated with or into or becomes a Restricted Subsidiary of such specified Person, and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person, in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such Person, as applicable. "Acquisition" means the purchase by the Issuer on October 17, 2005 pursuant to the Stock Purchase Agreement of all the equity interests of Affinion Group, LLC and all of the share capital of Affinion International Holdings Limited. "Additional Interest" means all additional interest owing on the Notes pursuant to the Registration Rights Agreement. "Additional Notes" means the 7.875% Senior Notes due 2018 issued by the Issuer pursuant to this Indenture from time to time after the Issue Date. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this Indenture, Cendant Corporation and
1
1

its Affiliates shall not be deemed Affiliates of the Issuer so long as (1) such entities would be Affiliates of the Issuer only by virtue of their beneficial ownership of Capital Stock of the Issuer and (2) such entities beneficially own, as a group, less of the voting power of the Issuer than is beneficially owned by the Sponsor. "Applicable Premium" shall mean the excess of: (a) the present value at the applicable redemption date of (i) the redemption price of the Notes being redeemed on December 15, 2014 (such redemption price being set forth in the table in the third paragraph of Paragraph 5 of the form of the Notes set forth in Appendix A) plus (ii) all required interest payments on such Notes through December 15, 2014 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of such Notes. "Asset Sale" means: (1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary of the Issuer (each referred to in this definition as a "disposition") or (2) the issuance or sale of Equity Interests (other than directors' qualifying shares or shares or interests required to be held by foreign nationals) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary of the Issuer) (whether in a single transaction or a series of related transactions), in each case other than: (a) a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business; (b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions set forth in Section 5.01 herein or any disposition that constitutes a Change of Control; (c) for purposes of Section 4.06 only, any Restricted Payment or Permitted Investment (other than a Permitted Investment to the extent such transaction results in the receipt of Cash Equivalents or Investment Grade Securities by the Issuer or its Restricted Subsidiaries) that is permitted to be made, and is made, under Section 4.04 herein. (d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate Fair Market Value of less than $7.5 million; (e) any disposition of property or assets or the issuance of securities by a Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the Issuer; (f) any foreclosures on assets or property of the Issuer or its Subsidiaries; -2-

(g) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (h) any sale of inventory, equipment or other assets in the ordinary course of business; (i) any grant in the ordinary course of business of any license of patents, trademarks, know-how and any other intellectual property; (j) any exchange of assets for assets (including a combination of assets and Cash Equivalents) related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Board of Directors of the Issuer, which in the event of an exchange of assets with a Fair Market Value in excess of (1) $10.0 million shall be evidenced by an Officers' Certificate, and (2) $25.0 million shall be set forth in a resolution approved in good faith by at least a majority of the Board of Directors of the Issuer; (k) in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements in which the Issuer enters into a multi-year services arrangement with the transfer of such assets) of comparable or greater value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by senior management or the Board of Directors of the Issuer, which in the event of a swap with a Fair Market Value in excess of (1) $10.0 million shall be evidenced by an Officers' Certificate and (2) $25.0 million shall be set forth in a resolution approved in good faith by at least a majority of the Board of Directors of the Issuer; and (l) cash advances by any Material Subsidiary (as defined in the Credit Agreement) to the Issuer or any Subsidiary (as defined in the Credit Agreement) that is a Parent of such Subsidiary (as defined in the Credit Agreement). "Bank Indebtedness" means any and all amounts payable under or in respect of the Credit Agreement or the other Senior Credit Documents, as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof. "Board of Directors" means as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof. -3-

"Business Day" means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or place of payment. "Capital Stock" means: (1) in the case of a corporation or a company, corporate stock or shares; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Capitalized Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP. "Cash Contribution Amount" means the aggregate amount of cash contributions made to the capital of the Issuer or any Guarantor described in the definition of "Contribution Indebtedness." "Cash Equivalents" means: (1) U.S. dollars, pounds sterling, euros, national currency of any participating member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business; (2) securities issued or directly and fully guaranteed or insured by the government of the United States or any country that is a member of the European Union or any agency or instrumentality thereof, in each case with maturities not exceeding two years from the date of acquisition; (3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250 million, or the foreign currency equivalent thereof, and whose long-term debt is rated "A" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency); -4-

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least "A-1" or the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition; (6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; (7) Indebtedness issued by Persons (other than Permitted Holders or any of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher from Moody's (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and (8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above. "Cendant" means Cendant Corporation. "Change of Control" means any of the following events: (1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person, other than any Permitted Holder; (2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any Parent of the Issuer (for purposes of calculating the total voting power of the Voting Stock held by a group, the voting power beneficially owned by a Permitted Holder shall be excluded to the extent such Permitted Holder retains the sole economic rights with respect to the subject Voting Stock); or -5-

(3) (A) prior to the first public offering of common Capital Stock of the Parent or the Issuer, the first day on which the Board of Directors of the Parent or the Issuer shall cease to consist of a majority of directors who (i) were members of the Board of Directors of the Issuer on the Issue Date or (ii) were either (x) nominated for election by the Board of Directors of the Parent or the Issuer, a majority of whom were directors on the Issue Date or whose election or nomination for election was previously approved by a majority of directors nominated for election pursuant to this clause (x) or who were designated or appointed pursuant to clause (y) below, or (y) designated or appointed by a Permitted Holder (each of the directors selected pursuant to clauses (A)(i) and (A)(ii), a "Continuing Director") and (B) after the first public offering of common Capital Stock of either Parent or the Issuer, (i) if such public offering is of common Capital Stock of the Parent , the first day on which a majority of the members of the Board of Directors of the Parent are not Continuing Directors or (ii) if such public offering is of common Capital Stock of the Issuer, the first day on which a majority of the members of the Board of Directors of the Issuer are not Continuing Directors. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control. "Code" means the Internal Revenue Code of 1986, as amended. "Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period (without giving effect to the amount added to Net Income in calculating Consolidated Net Income for the excess of the provision for taxes over cash taxes) plus: (1) provision for taxes based on income, profits or capital of such Person and its Restricted Subsidiaries for such period, including, without limitation, state franchise and similar taxes, and including an amount equal to the amount of tax distributions actually made to the holders of Capital Stock of such Person or any Parent of such Person in respect of such period in accordance with Section 4.04(b)(xii), which shall be included as though such amounts had been paid as income taxes directly by such Person, in each case, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (2) Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that any such Fixed Charges were deducted in computing such Consolidated Net Income; plus (3) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus -6-

(4) the amount of any restructuring charges or expenses (which, for the avoidance of doubt, shall include retention and supplemental bonus payments payable in connection with the Acquisition or otherwise, exit costs, severance payments, systems establishment costs or excess pension charges), to the extent that any such charges or expenses were deducted in computing such Consolidated Net Income; plus (5) for any quarter in the four quarter period ended September 30, 2010, all adjustments to net income (or loss) used in connection with the calculation of pro forma "Adjusted EBITDA" for the last twelve months ended September 30, 2010 (as set forth in the Offering Memorandum under Note 3 to the section entitled "SummarySummary Historical Consolidated and Pro Forma Combined Financial Data") to the extent such adjustments are not fully reflected in the applicable quarter and continue to be applicable; plus (6) the amount of management, monitoring, consulting and advisory fees and related expenses paid to the Permitted Holders (or any accruals relating to such fees and related expenses) during such period; provided that such amount shall not exceed in any four quarter period the greater of (x) $2.5 million or (y) 1.0% of Consolidated Cash Flow of the Issuer (calculated without giving effect to this clause (6)); minus (7) non-cash items increasing such Consolidated Net Income for such period (excluding the recognition of deferred revenue or any non-cash items which represent the reversal of any accrual of, or reserve for, anticipated cash charges in any prior period and any items for which cash was received in any prior period and excluding amounts increasing Consolidated Net Income pursuant to clause (15) of the definition of Consolidated Net Income); in each case, on a consolidated basis and determined in accordance with GAAP. For purposes of calculating Consolidated Cash Flow, the calculation shall exclude the effects of purchase accounting as a result of the Transactions. Notwithstanding the preceding, the provision for taxes based on the income or profits of, the Fixed Charges of, the depreciation and amortization and other non-cash expenses or non-cash items of and the restructuring charges or expenses of, a Restricted Subsidiary of the Issuer shall be added to (or subtracted from, in the case of non-cash items described in clause (7) above) Consolidated Net Income to compute Consolidated Cash Flow of the Issuer (A) in the same proportion that the Net Income of such Restricted Subsidiary was added to compute such Consolidated Net Income of the Issuer and (B) only to the extent that a corresponding amount would be permitted at the date of determination to be dividended or distributed to the Issuer by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Leverage Ratio" means, with respect to any Person at any date, the ratio of (a) the aggregate amount of all Indebtedness of such Person and its Restricted Subsidiaries less cash and cash equivalents (excluding restricted cash), in each case, determined -7-

on a consolidated basis in accordance with GAAP as of such date to (b) the Consolidated Cash Flow of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of its Restricted Subsidiaries Incurs or redeems any Indebtedness subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Consolidated Leverage Ratio is made, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period. The provisions applicable to pro forma transactions and Indebtedness set forth in the second paragraph of the definition of "Fixed Charge Coverage Ratio" shall apply for purposes of making the computation referred to in this paragraph. "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, plus the amount that the provision for taxes exceeds cash taxes paid by such Person and its Restricted Subsidiaries in such period; provided that: (1) any net after-tax extraordinary or nonrecurring or unusual gains, losses, income, expense or charges (less all fees and expenses relating thereto), including, without limitation, any severance, relocation or other restructuring costs and transition expenses Incurred as a direct result of the transition of the Issuer to an independent operating company in connection with the Transactions and fees, expenses or charges related to any offering of Equity Interests of such Person, any Investment, any acquisition or any offering of Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses or charges related to the Transactions and the offering of the Notes, in each case, shall be excluded; (2) any increase in amortization or depreciation or any one-time non-cash charges resulting from purchase accounting in connection with any acquisition that is consummated on or after October 17, 2005 shall be excluded; (3) the cumulative effect of a change in accounting principles during such period shall be excluded; (4) any net after-tax gains or losses on disposal of discontinued operations shall be excluded; (5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Issuer) shall be excluded; (6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness shall be excluded; (7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity -8-

method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period; (8) solely for the purpose of covenant described in Section 4.04 herein the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary or its equity holders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person or a Restricted Subsidiary of such Person (subject to the provisions of this clause (8)), to the extent not already included therein; (9) any non-cash impairment charge or asset write-off resulting from the application of Statement of Financial Accounting Standards No. 142 and 144, and the amortization of intangibles arising pursuant to No. 141, shall be excluded; (10) any non-cash expenses realized or resulting from employee benefit plans or post-employment benefit plans, grants of stock appreciation or similar rights, stock options or other rights to officers, directors and employees of such Person or any of its Restricted Subsidiaries shall be excluded; (11) any one-time non-cash compensation charges shall be excluded; (12) non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 and related interpretations shall be excluded; (13) the effects of purchase accounting as a result of the Transactions shall be excluded; (14) accruals and reserves that are established within twelve months after October 17, 2005 and that are so required to be established in accordance with GAAP shall be excluded; and (15) to the extent not already reflected in Consolidated Net Income, the amount of any accrual, reserve or other charge that reduces Net Income of such Person that was taken in respect of expected or actual Losses by reason of (x) any legal proceedings existing on October 17, 2005, or relating to the same facts and circumstances of such proceedings, or (y) a breach or violation of law, in each case, shall be excluded; provided that (as certified in an Officers' Certificate delivered to the Trustee) the Issuer has (i) a reasonable good faith belief that it is entitled to be indemnified by Cendant pursuant to -9-

the Stock Purchase Agreement in respect of such Losses in an amount greater than or equal to the amount to be excluded from the calculation of Consolidated Net Income pursuant to this clause (15) and (ii) has provided Cendant a notice in respect of the Issuer's intent to seek indemnity; provided further that (x) if Net Income is increased as a result of any amounts received from Cendant in respect of such an indemnity and the right to be so indemnified was used in a prior period to increase Consolidated Net Income pursuant to this clause (15), such amounts received shall be excluded from Consolidated Net Income and (y) to the extent the actual indemnity received is less than the expected indemnity amount excluded in a prior period pursuant to this clause (15), Consolidated Net Income shall be reduced by the difference in the period in which such lower actual indemnity amounts are received or in which a final judgment of a court of competent jurisdiction is made that the Issuer is entitled to no indemnity. Notwithstanding the foregoing, for the purpose of the covenant described in Section 4.04 herein, there shall be excluded from the calculation of Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Issuer or a Restricted Subsidiary of the Issuer in respect of or that originally constituted Restricted Investments. "Contingent Obligations" means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent: (1) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (2) to advance or supply funds: (a) for the purchase or payment of any such primary obligation; or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or (3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof. "Contribution Indebtedness" means Indebtedness of the Issuer or any Guarantor in an aggregate principal amount not greater than twice the aggregate amount of cash contributions (other than Excluded Contributions and amounts applied to make a Restricted Payment in accordance with Section 4.04(b)(ii) made to the capital of the Issuer or such Guarantor after October 17, 2005 (other than any cash contributions in connection with the Transactions); provided, however that: (1) if the aggregate principal amount of such Contribution Indebtedness is greater than the aggregate amount of such cash contributions to the capital of the Issuer or such Guarantor, as applicable, the amount in excess shall be Indebtedness (other than Secured Indebtedness) with a Stated Maturity later than the Stated Maturity of the Notes; (2) -10-

such Contribution Indebtedness (a) is Incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers' Certificate on the date of Incurrence thereof; and (3) such cash contribution is not and has not been included in the calculation of permitted Restricted Payments under the covenant described in Section 4.04 herein. "Credit Agreement" means (i) the Amended and Restated Credit Agreement dated as of April 9, 2010, among the Issuer, Holdings, the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent, and the other agents party thereto, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any one or more agreements or indentures extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of "Credit Agreement," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default. "Designated Non-cash Consideration" means the Fair Market Value of non-cash consideration received by the Issuer or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers' Certificate setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration. "Designated Preferred Stock" means Preferred Stock of the Issuer or any Parent of the Issuer (other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers' Certificate, on the issuance date thereof -11-

"Disqualified Stock" means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event: (1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or (3) is redeemable at the option of the holder thereof, in whole or in part, in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that (x) if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability and (y) such Capital Stock shall not constitute Disqualified Stock if such Capital Stock matures or is mandatorily redeemable or is redeemable at the option of the holders thereof as a result of a change of control or asset sale so long as the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto); provided further that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Equity Offering" means any public or private sale after the Issue Date of common stock or Preferred Stock of any Person (other than Disqualified Stock), other than: (1) public offerings with respect to the Capital Stock of such Person registered on Form S-4 or Form S-8; (2) any such public or private sale that constitutes an Excluded Contribution; (3) an issuance to any Subsidiary; and (4) any Cash Contribution Amounts. -12-

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "Exchange Notes" has the meaning assigned to the term "Exchange Securities" in the Registration Rights Agreement. "Exchange Offer" has the meaning assigned to the term "Registered Exchange Offer" in the Registration Rights Agreement. "Exchange Offer Registration Statement" has the meaning assigned to such term in the Registration Rights Agreement. "Excluded Contributions" means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer from: (1) contributions to its common Capital Stock, and (2) the sale (other than to a Subsidiary of the Issuer or pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer, in each case designated as Excluded Contributions pursuant to an Officers' Certificate executed by an Officer of the Issuer). "Existing 10 /8% Senior Notes" means the $270.0 million principal amount of 10 /8% Senior Notes due 2013 that were issued by the Issuer on 1 October 17, 2005 and the $34.0 million principal amount of 10 /8% Senior Notes due 2013 that were issued by the Issuer on May 3, 2006. "Fair Market Value" means, with respect to any asset or property, the price that could be negotiated in an arm's-length transaction between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. "Fixed Charge Coverage Ratio" means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of such period. -131
1

In addition, for purposes of calculating the Fixed Charge Coverage Ratio referred to above, Investments, acquisitions, dispositions, mergers, consolidations or discontinued operations (as determined in accordance with GAAP) that have been made by the Issuer or any Restricted Subsidiary during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations or discontinued operations (including the Transactions) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger or consolidation or discontinued any operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to an Investment, acquisition, disposition, merger, consolidation or discontinued operation (including the Transactions) and the amount of income or earnings relating thereto, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Issuer and shall comply with the requirements of Rule 11-02 of Regulation S-X promulgated by the Commission, except that such pro forma calculations may include operating expense reductions for such period resulting from the transaction which is being given pro forma effect that have been realized or for which substantially all the steps necessary for realization have been taken or are reasonably expected to be taken within twelve months following any such transaction, including, but not limited to, the execution or termination of any contracts, the reduction of costs related to administrative functions or the termination of any personnel, as applicable; provided that, in either case, such adjustments are set forth in an Officers' Certificate signed by the Issuer's chief financial officer and another Officer which states (i) the amount of such adjustment or adjustments, (ii) that such adjustment or adjustments are based on the reasonable good faith beliefs of the Officers executing such Officers' Certificate at the time of such execution and (iii) that any related incurrence of Indebtedness is permitted pursuant to this Indenture; provided further that the aggregate of all operating expense reductions that have not been realized that may be included in such pro forma calculation as of the relevant Calculation Date shall not exceed 15% of the pro forma Consolidated Cash Flow of the Issuer on such Calculation Date. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if the related hedge has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been -14-

based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate. "Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of: (1) the consolidated interest expense (net of interest income) to the extent it relates to Indebtedness of such Person and its Restricted Subsidiaries for such period and to the extent such expense was deducted in computing Consolidated Net Income, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations (but excluding the amortization or writeoff of deferred financing fees or expenses of any bridge or other financing fee in connection with the Transactions, the refinancing of the Credit Agreement and the offering of the Notes; plus (2) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus (3) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such guarantee or Lien is called upon; plus (4) to the extent not included in clause (1) above, the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock or Preferred Stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests (other than Disqualified Stock) of the Issuer or to the Issuer or a Restricted Subsidiary of the Issuer, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. "Flow Through Entity" means an entity that is treated as a partnership not taxable as a corporation, a grantor trust or a disregarded entity for U.S. federal income tax purposes or subject to treatment on a comparable basis for purposes of state, local or foreign tax law. "Foreign Subsidiary" means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect subsidiary of such Restricted Subsidiary. "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American -15-

Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case which are in effect on October 17, 2005. For the purposes of this Indenture, the term "consolidated" with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary shall be accounted for as an Investment. "guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations. "Guarantee" means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Person in accordance with the provisions of this Indenture. "Guarantor" means any Person that Incurs a Guarantee provided, that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under: (1) currency exchange or interest rate swap agreements, cap agreements and collar agreements; and (2) other agreements or arrangements designed to manage exposure or protect such Person against fluctuations in currency exchange or interest rates. "holder" or "noteholder" or "Holder" means the Person in whose name a Note is registered on the registrar's books. "Holdings" means Affinion Group Holdings, Inc., a Delaware corporation, and its successors. "Holdings Senior Notes" means the $325.0 million principal amount of 11.625% Senior Notes due 2015 that were issued by Holdings on October 5, 2010 (and any exchange notes issued therefor). "Incur" means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. "Indebtedness" means, with respect to any Person: (1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, -16-

notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property, except any such balance that constitutes a current account payable, trade payable or similar obligation Incurred, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; (2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and (3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Person; provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) the Seller Preferred Stock whether or not reflected as a liability of the Issuer; (5) obligations to make payments in respect of money back guarantees offered to customers in the ordinary course of business; (6) obligations to make payments to one or more insurers in respect of premiums collected by the Issuer on behalf of such insurers or in respect profit-sharing arrangements entered into with such insurers, in each case in the ordinary course of business, or (7) the financing of insurance premiums with the carrier of such insurance or take or pay obligations contained in supply agreements, in each case entered into in the ordinary course of business. Notwithstanding anything in this Indenture, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture. "Indenture" means this Indenture, as amended or supplemented from time to time. "Independent Financial Advisor" means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Similar Business, in each case of nationally -17-

recognized standing that is, in the good faith determination of the Board of Directors of the Issuer, qualified to perform the task for which it has been engaged. "Initial Notes" means the 7.875% Senior Notes due 2018 issued by the Issuer pursuant to this Indenture on the Issue Date. "Initial Purchasers" means Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and such other initial purchasers party to the purchase agreement entered into in connection with the offer and sale of the Notes. "Investment Grade Securities" means: (1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents), (2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody's or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries, (3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and (4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and marketing partners and commission, travel and similar advances to officers, employees and consultants, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and Section 4.04 herein: (1) "Investments" shall include the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if positive) equal to: (a) the Issuer's "Investment" in such Subsidiary at the time of such redesignation less -18-

(b) the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by senior management or the Board of Directors of the Issuer. "Issue Date" means November 19, 2010, the date on which the Initial Notes are issued. "Joint Venture" means any Person, other than an individual or a Subsidiary of the Issuer, (i) in which the Issuer or a Restricted Subsidiary of the Issuer holds or acquires an ownership interest (whether by way of Capital Stock or otherwise) and (ii) which is engaged in a Similar Business. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest and, any filing of or agreement to give any financing statement under the Uniform Commercial Code or equivalent statutes of any jurisdiction (other than a filing for informational purposes)); provided that in no event shall an operating lease be deemed to constitute a Lien. "Management Group" means all of the individuals consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent company of the Issuer, as the case may be, on October 17, 2005 together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of the Issuer or any direct or indirect parent company of the Issuer, as the case may be, as applicable, was approved by (x) a vote of a majority of the directors of the Issuer or any direct or indirect parent of the Issuer as applicable, then still in office who were either directors on October 17, 2005 or whose election or nomination was previously so approved or (y) the Permitted Holders and (2) executive officers and other management personnel of the Issuer or any direct or indirect parent company of the Issuer, as the case may be, as applicable, hired at a time when the directors on October 17, 2005 together with the directors so approved constituted a majority of the directors of the Issuer or any direct or indirect parent company of the Issuer, as the case may be, as applicable. "Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof. "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, less an amount equal to the amount of tax distributions actually made to the holders of Capital Stock of such Person or any Parent of such Person in respect of a period in accordance with Section 4.04(b)(xii) herein as if such amounts had been paid as income taxes -19-

directly by such Person but only to the extent such amounts have not already been accounted for as taxes reducing the net income (loss) of such Person. "Net Proceeds" means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale, including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required other than pursuant to Section 4.06(b) or (c) to be paid as a result of such transaction (including to obtain any consent therefor), any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and any distributions and the payments required to be made to minority interest holders in Subsidiaries or Joint Ventures as a result of such Asset Sale; provided that Net Proceeds shall not include proceeds of a Subsidiary Spin-Off to the extent such proceeds are applied to redeem the Notes pursuant to the provisions described in the fourth and fifth paragraphs of Paragraph 5 of the form of the Notes set forth in Appendix A. "Non-Guarantor Restricted Subsidiary" means any Restricted Subsidiary of the Issuer that is not a Subsidiary Guarantor. "Notes" means the Initial Notes and any Additional Notes and Exchange Notes issued pursuant to this Indenture, in each case, in the forms set forth in Appendix A. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers' acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the holders of the Notes. "Offering Memorandum" means the final confidential offering memorandum dated November 8, 2010 relating to the offer and sale by the Issuer of $475,000,000 principal amount of the Initial Notes. "Officer" means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer or any of the Issuer's Restricted Subsidiaries. -20-

"Officers' Certificate" means a certificate signed on behalf of the Issuer by two Officers of the Issuer or any of the Issuer's Restricted Subsidiaries, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer or any of the Issuer's Restricted Subsidiaries, that meets the requirements set forth in this Indenture. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee. "Parent" means, with respect to any Person, any direct or indirect parent company of such Person whose only material assets consist of the common Capital Stock of such Person. "Pari Passu Indebtedness" means: (1) with respect to the Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment with the Notes; and (2) with respect to any Guarantor, its applicable Guarantee and any Indebtedness which ranks pari passu in right of payment with such Guarantor's Guarantee. "Permitted Holders" means, at any time, (1) the Sponsor and (2) the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder. "Permitted Investment" means: (1) any Investment in the Issuer or any Restricted Subsidiary; (2) any Investment in Cash Equivalents or Investment Grade Securities; (3) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Issuer, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary of the Issuer; (4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.06 herein or any other disposition of assets not constituting an Asset Sale; (5) any Investment existing on October 17, 2005 and any Investments made pursuant to binding commitments in effect on October 17, 2005; -21-

(6) advances to employees not in excess of $15 million and outstanding at any one time in the aggregate; provided that advances that are forgiven shall continue to be deemed outstanding; (7) any Investment acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; (8) Hedging Obligations permitted under Section 4.03(b)(x) hereof; (9) any Investment by the Issuer or any of its Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) since October 17, 2005 that are at that time outstanding (without giving effect to the sale of Investments made pursuant to this clause (9) to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries do not consist of Cash Equivalents), not to exceed the greater of (x) $95 million and (y) 4.0% of Total Assets of the Issuer at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of the Issuer at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary; (10) additional Investments by the Issuer or any of its Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) since October 17, 2005 that are at that time outstanding (without giving effect to the sale of Investments made pursuant to this clause (10) to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries do not consist of Cash Equivalents), not to exceed the greater of (x) $110 million and (y) 7.5% of Total Assets of the Issuer at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (11) loans and advances to officers, directors and employees for business-related travel expenses, moving and relocation expenses and other similar expenses, in each case Incurred in the ordinary course of business; (12) Investments the payment for which consists of Equity Interests of the Issuer or any Parent of the Issuer (other than Disqualified Stock); provided, however, that such Equity Interests shall not increase the amount available for Restricted Payments -22-

under the calculation set forth in Section 4.04 (a)(3) hereof until such time as the Investment in such Equity Interests is no longer outstanding; (13) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons; (14) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property in each case in the ordinary course of business; (15) Investments of a Restricted Subsidiary of the Issuer acquired after October 17, 2005 or of an entity merged into, amalgamated with, or consolidated with a Restricted Subsidiary of the Issuer in a transaction that is not prohibited by the covenant described under Article 5 hereof after October 17, 2005 to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation; (16) any Investment in the Notes; (17) guarantees not prohibited by or required pursuant to, as the case may be, the covenants described in Sections 4.03 and 4.11 hereof; and (18) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except for transactions described in Section 4.07(b)(ii), (vi), (vii), (viii), (ix), (xi) and (xvi)). "Permitted Liens" means, with respect to any Person: (1) pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations, including those to secure health, safety, insurance and environmental obligations, of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business; (2) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review; (3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings; -23-

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued at the request of and for the account of such Person in the ordinary course of its business; (5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; (6) (A) Liens securing an aggregate principal amount of Pari Passu Indebtedness not to exceed the greater of (x) the aggregate principal amount of Pari Passu Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(i) herein, and (y) the maximum principal amount of Indebtedness that, as of such date, and after giving effect to the Incurrence of such Indebtedness and the application of the proceeds therefrom on such date, would not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed 3.00 to 1.00 and (B) Liens securing Indebtedness permitted to be Incurred pursuant to clauses (ii), (iv) (provided, that, such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (iv)), (xii) or (xix) (provided, that, in the case of clause (xix), such Liens do not extend to any property or assets of the Issuer or any Guarantor) of Section 4.03(b) herein; (7) Liens existing on October 17, 2005 (other than with respect to Obligations in respect of the Credit Agreement); (8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of the Issuer; (9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary of the Issuer acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary of the Issuer; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other assets or property owned by the Issuer or any Restricted Subsidiary of the Issuer; (10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary of the Issuer permitted to be Incurred in accordance with Section 4.03 herein; -24-

(11) Liens securing Hedging Obligations permitted to be Incurred Section 4.03(b)(x) herein; (12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (13) leases and subleases of real property granted to others in the ordinary course of business that do not (i) materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries or (ii) secure any Indebtedness; (14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business; (15) Liens in favor of the Issuer or any Guarantor; (16) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer's customer at the site at which such equipment is located; (17) Liens securing insurance premiums financing arrangements, provided that such Liens are limited to the applicable unearned insurance premiums; (18) Liens on the Equity Interests of Unrestricted Subsidiaries; (19) grants of software and other licenses in the ordinary course of business; (20) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (7), (8) and (9); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; (21) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made; (22) Liens securing obligations Incurred in the ordinary course of business that do not exceed $15 million at any one time outstanding; -25-

(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business; (24) Liens incurred to secure cash management services in the ordinary course of business; (25) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods; and (26) deposits made in the ordinary course of business to secure liability to insurance carriers. "Person" means any individual, corporation, partnership, limited liability company, Joint Venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock" means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up. "Presumed Tax Rate" means the highest effective marginal statutory combined U.S. federal, state and local income tax rate prescribed for an individual residing in New York City (taking into account (i) the deductibility of state and local income taxes for U.S. federal income tax purposes, assuming the limitation of Section 68(a)(2) of the Code applies and taking into account any impact of Section 68(f) of the Code, and (ii) the character (long-term or short-term capital gain, dividend income or other ordinary income) of the applicable income). "Rating Agency" means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to rate the Notes for reasons outside of the Issuer's control, a "nationally recognized statistical rating organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer or any Parent of the Issuer as a replacement agency for Moody's or S&P, as the case may be. "Registration Rights Agreement" means (1) with respect to the Initial Notes, the Registration Rights Agreement, to be dated the Issue Date, among the Issuer and the Initial Purchasers and (2) with respect to any Additional Notes, any registration rights agreement among the Issuer and the other parties thereto relating to the registration by the Issuer of such Additional Notes under the Securities Act. "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated this Indenture all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer. "S&P" means Standard & Poor's Ratings Group or any successor to the rating agency business thereof. -26-

"Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary of the Issuer or between Restricted Subsidiaries of the Issuer. "SEC" means the Securities and Exchange Commission. "Secured Indebtedness" means any Indebtedness secured by a Lien. "Secured Indebtedness Leverage Ratio" means, with respect to any Person, at any date the ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries as of such date of calculation (determined on a consolidated basis in accordance with GAAP) to (ii) Consolidated Cash Flow of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date on which such additional Indebtedness is Incurred. In the event that the Issuer or any of its Restricted Subsidiaries Incurs or redeems any Indebtedness subsequent to the commencement of the period for which the Secured Indebtedness Leverage Ratio is being calculated but prior to the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the "Secured Leverage Calculation Date"), then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period. The provisions applicable to pro forma transactions and Indebtedness set forth in the second paragraph of the definition of "Fixed Charge Coverage Ratio" shall apply for purposes of making the computation referred to in this paragraph. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. "Seller Preferred Stock" means the shares of the preferred stock issued by Holdings in the Transactions, or subsequently issued shares in respect of payable-in-kind dividend payments therein or issued upon stock splits or redemptions or otherwise in respect thereof "Senior Credit Documents" means the collective reference to any Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented or otherwise modified from time to time. "Senior Subordinated Bridge Loan Facility" means the senior subordinated bridge loan facility among the Issuer, the financial institutions named therein and Credit Suisse, Cayman Islands Branch (or an affiliate thereof), as administrative agent, entered into on October 17, 2005 in connection with the consummation of the Transactions. "Shelf Registration Statement" has the meaning assigned to such term in the Registration Rights Agreement. -27-

"Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC or any successor provision. "Similar Business" means any business or activity of the Issuer or any of its Subsidiaries currently conducted or proposed as of the Issue Date, or any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof, or is complementary, incidental, ancillary or related thereto. "Sponsor" means Apollo Management L.P. or one or more investment funds controlled by Apollo Management, L.P. and any of their respective Affiliates. "Sponsor Consulting Agreement" means the Consulting Agreement between the Sponsor and the Issuer dated as of October 17, 2005. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "Stock Purchase Agreement" means the Purchase Agreement dated as of July 26, 2005, as amended and supplemented on October 17, 2005, by and among Cendant, the Issuer and Holdings, pursuant to which Cendant agreed to sell to the Issuer all of the equity interests of Affinion Group, LLC (formerly Cendant Marketing Group, LLC) and Affinion International Holdings Limited (formerly Cendant International Holdings Limited). "Subordinated Indebtedness" means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee. "Subsidiary" means, with respect to any Person (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Wholly Owned Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity and (3) any Person that is consolidated in the consolidated financial statements of the specified Person in accordance with GAAP. -28-

"Subsidiary Guarantor" means each Subsidiary of the Issuer that is a Guarantor. "Subsidiary Spin-Off" means any public sale after the Issue Date of common stock of any Restricted Subsidiary of the Issuer in connection with a spin-off or a similar transaction involving the disposition of a business operation, unit or division. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture. "Total Assets" means, with respect to any Person, the total consolidated assets of such Person and its Restricted Subsidiaries, as shown on the most recent balance sheet. "Transaction Documents" means the Stock Purchase Agreement, the Credit Agreement and, in each case, any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time "Transactions" means, collectively, the Acquisition and the entering into of the credit agreement dated as of October 17, 2005 among Holdings, the Issuer, the lenders from time to time party thereto, Credit Suisse, Cayman Islands Branch (or an affiliate thereof), as administrative agent, and the other 1 agents party thereto, the Senior Subordinated Bridge Loan Facility and the indenture governing the Existing 10 /8% Senior Notes. "Treasury Rate" means, for any date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to the applicable redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from the applicable redemption date to December 15, 2014; provided, however, that if the period from the applicable redemption date is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given except that if the period from the redemption date to December 15, 2014 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. "Trust Officer" means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject, and who shall have direct responsibility for the administration of this Indenture. "Trustee" means the respective party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. -29-

"Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "Unrestricted Subsidiary" means: (1) initially Affinion Loyalty, LLC and Affinion Investments, LLC; (2) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and (3) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer (other than any Subsidiary of the Subsidiary to be so designated); provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of its Restricted Subsidiaries (other than Equity Interests of Unrestricted Subsidiaries); provided further, however, that either: (a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or (b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04. The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation: (x) (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under Section 4.03(a) herein or (2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and (y) no Event of Default shall have occurred and be continuing. Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions. -30-

"U.S. Government Obligations" means securities that are: (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, that, (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Weighted Average Life to Maturity" means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments. "Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that is a Restricted Subsidiary. "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares or shares or interests required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such Person. SECTION 1.02. Other Definitions.
Defined in Term Section

"Affiliate Transaction" "Asset Sale Offer" "Bankruptcy Law" "Base Currency" "Change of Control Offer" -31-

4.07 4.06(c) 6.01 12.16 4.08(b)

"covenant defeasance option" "Custodian" "Definitive Note" "Depository" "Event of Default" "Excess Proceeds" "Exchange Offer Registration Statement" "Global Notes" "Guaranteed Obligations" "IAI" "incorporated provision" "Judgment Currency" "legal defeasance option" "Losses" "Notes Custodian" "Offer Period" "Paying Agent" "protected purchaser" "Purchase Agreement" "Private Exchange" "Private Exchange Note" "QIB" "Rates of Exchange" "Refinancing Indebtedness" "Refunding Capital Stock" "Registered Exchange Offer" "Registrar" "Registration Rights Agreement" "Regulation S" "Regulation S Global Note" "Restricted Payments" "Retired Capital Stock" "Rule 144A" "Rule 144A Global Note" "Shelf Registration Statement" "Specified Merger/Transfer Transaction" "Successor Issuer" "Successor Guarantor" "Transfer Restricted Notes"

8.01(b) 6.01 Appendix A Appendix A 6.01 4.06(c) Appendix A Appendix A 10.01(a) Appendix A 12.01 12.16(b) 8.01(b) 4.03(b) Appendix A 4.06(e) 2.04 2.08 Appendix A Appendix A Appendix A Appendix A 12.16(b) 4.03(b) 4.04(b) Appendix A 2.04 Appendix A Appendix A Appendix A 4.04(a) 4.04(b) Appendix A Appendix A Appendix A 5.01(a) 5.01 (a) 5.01(b) Appendix A

SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture incorporates by reference certain provisions of the TIA. The following TIA terms have the following meanings: "Commission" means the SEC. "indenture securities" means the Notes and the Guarantees. -32-

"indenture security holder" means a Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Issuer, the Guarantors and any other obligor on the Notes. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) "or" is not exclusive; (d) "including" means including without limitation; (e) words in the singular include the plural and words in the plural include the singular; (f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; (g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; (h) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP; and (i) whenever in this Indenture there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Notes, such mention shall be deemed to include mention of the payment of additional interest and Additional Interest, to the extent that, in such context, additional interest or Additional Interest are, were, or would be payable in respect thereof. -33-

ARTICLE 2 THE NOTES SECTION 2.01. Amount of Notes; Issuable in Series. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $475,000,000. Subject to Section 4.03, the Issuer may issue Additional Notes from time to time after the Issue Date without notice or the consent of Holders. The Initial Notes, any Exchange Notes and any Additional Notes subsequently issued under this Indenture will be treated as a single class for all purposes hereunder, including, without limitation, waivers, amendments, redemptions and offers to purchase. SECTION 2.02. Form and Dating. Provisions relating to the Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustee's certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee's certificate of authentication shall each be substantially in the form set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Exchange Notes and the Trustee's certificate of authentication and (ii) any Additional Notes issued other than as Transfer Restricted Notes and the Trustee's certificate of authentication shall each be substantially in the form set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and only in denominations of $2,000 and any integral multiples of $1,000. SECTION 2.03. Execution and Authentication. (a) The Trustee shall authenticate and make available for delivery upon a written order of the Issuer signed by one Officer (i) Notes for original issue on the date hereof in an aggregate principal amount of $475,000,000, (ii) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein and (iii) the Exchange Notes for issue in a Registered Exchange Offer or Private Exchange pursuant to the Registration Rights Agreement for a like principal amount of Initial Notes and, if applicable, any Additional Notes. Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and integral multiples of $1,000. (b) One duly authorized Officer shall sign the Notes for the Issuer by manual signature. (c) If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. -34-

(d) A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. (e) The Trustee may appoint one or more authenticating agents reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. (f) The Trustee is hereby authorized to enter into a letter of representations with the Depository in the form provided by the Issuer and to act in accordance with such letter. SECTION 2.04. Registrar and Paying Agent. (a) The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the "Registrar"), and where Notes may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrars. The Issuer initially appoints the Trustee as (i) Registrar, and Paying Agent in connection with the Notes and (ii) the Custodian with respect to the Global Notes. (b) The Issuer shall enter into an appropriate agency agreement, satisfactory in form to the Trustee, with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Issuer or any of the Issuer's domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar. (c) The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the principal of and interest on any Note, the Issuer shall deposit with each Paying Agent (or if the Issuer or a Wholly Owned Subsidiary of the Issuer is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal -35-

and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. If the Issuer or a Wholly Owned Subsidiary of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders. SECTION 2.07. Transfer and Exchange. (a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of the same series of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrar's request. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeem in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before the redemption date of the Notes. (b) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Guarantors, the Trustee, each Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, any Guarantor, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary. (c) Any Holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry. -36-

(d) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange. SECTION 2.08. Replacement Notes. (a) If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note of the same series if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and (c) satisfies any other reasonable requirements of the Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Issuer, the Trustee, a Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note (including attorneys' fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof. (b) Every replacement Note is an additional obligation of the Issuer and the Guarantors. (c) The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes. SECTION 2.09. Outstanding Notes. (a) Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those redeemed pursuant to Article 3 and those described in this Section 2.09 as not outstanding. Subject to Section 13.06, a Note does not cease to be outstanding because the Issuer, a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note. (b) If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08. (c) If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue. -37-

SECTION 2.10. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Issuer consider appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Notes and make them available for delivery in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as Definitive Notes. SECTION 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver, at the expense of the Issuer, canceled Notes to the Issuer pursuant to written direction by an Officer. The Issuer may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture. SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest then borne by the Notes, as the case may be (plus interest on such defaulted interest to the extent lawful), in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or electronically transmit or cause to be mailed or electronically transmitted to each affected Holder, with a copy to the Trustee, a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.13. CUSIP Numbers, ISINs, etc. The Issuer in issuing the Notes may use CUSIP numbers, ISINs and "Common Code" numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers, ISINs and "Common Code" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption, that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall advise the Trustee of any change in the CUSIP numbers, ISINs and "Common Code" numbers. SECTION 2.14. Calculation of Principal Amount of Notes. The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes outstanding at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes then outstanding, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented by (b) the aggregate principal amount, as of such date of -38-

determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officers' Certificate. ARTICLE 3 REDEMPTION SECTION 3.01. Redemption. The Notes may be redeemed, in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the form of Notes set forth in Appendix A, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest and Additional Interest, if any, to the redemption date. SECTION 3.02. Applicability of Article. Redemption of Notes at the election of the Issuer or otherwise, as permitted or required by the Notes or any provision of this Indenture, shall be made in accordance with the Notes, such provision and this Article. SECTION 3.03. Notices to Trustee. If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the applicable Note, they shall notify the Trustee in writing of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. The Issuer shall give notice to the Trustee provided for in this paragraph at least 40 days but not more than 60 days before a redemption date if the redemption is pursuant to Paragraph 5 of the applicable Note, unless a shorter period is acceptable to the Trustee. Such notice shall be accompanied by an Officers' Certificate and Opinion of Counsel from the Issuer to the effect that such redemption shall comply with the conditions herein. If fewer than all the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Issuer and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being mailed or electronically transmitted to any Holder and shall thereby be void and of no effect. SECTION 3.04. Selection of Notes to Be Redeemed. In the case of any partial redemption, selection of the Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or if the Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof shall be issued in the name of the holder thereof upon cancellation of the original Note. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest and Additional Interest (if any) on, the Notes to be redeemed. -39-

SECTION 3.05. Notice of Optional Redemption. (a) At least 30 days but not more than 60 days before a redemption date (or such shorter period as is provided for in a redemption pursuant to Section 3.10), the Issuer shall mail or electronically transmit or cause to be mailed by first-class mail or electronically transmitted a notice of redemption to each Holder whose Notes are to be redeemed. Any such notice shall identify the Notes to be redeemed and shall state: (i) the redemption date; (ii) the redemption price and the amount of accrued interest to the redemption date; (iii) the name and address of a Paying Agent; (iv) that Notes called for redemption must be surrendered to a Paying Agent to collect the redemption price, plus accrued interest; (v) if fewer than all the outstanding Notes of a series are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes of a series to be redeemed and the aggregate principal amount of Notes of a series to be outstanding after such partial redemption; (vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (vii) the CUSIP number, ISIN or "Common Code" number, if any, printed on the Notes being redeemed; (viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN or "Common Code" number, if any, listed in such notice or printed on the Notes; and (ix) the applicable provision in this Indenture or the Notes pursuant to which the Issuer is redeeming such Notes. (b) At the Issuer's request, the Trustee shall give the notice of redemption in the Issuer's name and at the Issuer's expense. In such event, the Issuer shall provide the Trustee with the information required by this Section 3.05 no later than 45 days before the Redemption Date (unless a shorter notice shall be agreed to by the Trustee). SECTION 3.06. Effect of Notice of Redemption. Once notice of redemption is mailed or electronically transmitted in accordance with Section 3.05, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to any Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the interest payment date, the -40-

accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.07. Deposit of Redemption Price. With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if the Issuer or a Wholly Owned Subsidiary of the Issuer is a Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed. SECTION 3.08. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuer's expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Notes. (a) The Issuer shall promptly pay the principal of (and premium, if any) and interest, on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest on the Notes shall be considered paid on the date it is due if on such date the Trustee or any Paying Agent (other than the Issuer or any of its Affiliates) holds in accordance with this Indenture money sufficient to pay all principal and interest then due. (b) The Issuer shall pay interest on overdue principal at the rate specified therefor in the Notes and shall pay interest on overdue installments of interest at the same rate borne by the Notes to the extent lawful. SECTION 4.02. Reports and Other Information. (a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall file with the SEC (or attempt to file with the SEC if the SEC will not accept such a filing), and provide the Trustee and Holders with copies thereof, without cost to each Holder, within 15 days after it files (or attempts to file) them with the SEC, (i) within the time periods specified by the Exchange Act, an annual report on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form); -41-

(ii) within the time periods specified by the Exchange Act, a quarterly report on Form 10-Q (or any successor or comparable form); and (iii) all current reports that would be required to be filed with the SEC on Form 8-K. In addition, the Issuer shall make such information available to prospective investors upon request. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively (subject to Article 7 hereof) on Officers' Certificates). (b) For so long as the Notes remain outstanding during any period when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the Issuer shall furnish to the Holders and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (c) Notwithstanding the foregoing, the Issuer shall be deemed to have furnished such reports referred to above to the Trustee and the Holders if it has filed such reports with the SEC via the EDGAR filing system or posted such reports on the Issuer's website, as applicable, and such reports are publicly available. In addition, such requirements shall be deemed satisfied prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement by the filing with the SEC of the Exchange Offer Registration Statement and/or Shelf Registration Statement in accordance with the provisions of the Registration Rights Agreement, and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act and such Registration Statement and/or amendments thereto are filed at times that otherwise satisfy the time requirements set forth in Section 4.02(a). (d) If at any time any Parent of the Issuer becomes a Guarantor (there being no obligation of any Parent to do so), holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or of any direct or indirect parent corporation of the Issuer (and performs the related incidental activities associated with such ownership) and complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to Holders pursuant to this Section 4.02 may, at the option of the Issuer, be filed by and be those of such Parent rather than the Issuer. (e) Notwithstanding the foregoing, the Issuer shall not be required to furnish any information, certifications or reports required by Items 307 and 308 of Regulation S-K prior to the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement, as applicable. -42-

SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (1) the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (2) the Issuer shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary of the Issuer may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio for the Issuer's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period. (b) The limitations set forth in Section 4.03(a) shall not apply to: (i) the Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Agreement and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $1,020 million outstanding at any one time; (ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (excluding any Additional Notes) and the Guarantees, as applicable (and any Exchange Notes and guarantees thereof); (iii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness described in Section 4.03(b)(i) 1 and (ii)) after giving effect to the use of proceeds of the offering of the Notes, including, without limitation, Indebtedness under the 11 /2% Senior Subordinated Notes; (iv) (1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (2) Acquired Indebtedness; provided, however, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (iv), when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred (or deemed Incurred as provided under clause (xiv) below) pursuant to this clause (iv), does not exceed the greater of (x) $95 million and (y) 4.0% of Total Assets of the Issuer at the time of Incurrence; -43-

(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or selfinsurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; (vi) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or the disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; (vii) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness is subordinated in right of payment to the obligations of the Issuer under the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness; (viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock; (ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except (x) to the Issuer or another Restricted Subsidiary or (y) a pledge of Indebtedness referred to in this clause (ix) shall be deemed to be held by the pledgor and shall not be deemed a transfer until the pledgee commences actions to foreclose on such Indebtedness) shall be deemed, in each case, to be an Incurrence of such Indebtedness; (x) Hedging Obligations that are Incurred not for speculative purposes and either (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (2) for -44-

the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary, in each case, reasonably required in the conduct of the business (giving effect to any growth or expansion of such business), including those to secure health, safety, insurance and environmental obligations of the Issuer and its Restricted Subsidiaries as conducted in accordance with good and prudent business industry practice; (xii) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100 million at any one time outstanding; (xiii) any guarantee by the Issuer or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor's Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable; (xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund, refinance or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under the first paragraph of this covenant and clauses (ii), (iii), (iv), (xiv), (xv), (xviii) and (xix) of this Section 4.03(b), including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness: (1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced; (2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) at least 91 days later than the maturity date of the Notes; -45-

(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock; (4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing; (5) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer that is not a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and (6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under Section 4.03(b)(iv) or (xix), shall be deemed to have been Incurred and to be outstanding under such Section 4.03(b)(iv) or (xix), as applicable, and not this Section 4.03(b)(xiv) for purposes of determining amounts outstanding under such Section 4.03(b)(iv) or (xix), provided, further, that subclauses (1) and (2) of this Section 4.03(b)(xiv) shall not apply to any refunding, refinancing or defeasance of (A) the Notes or (B) any Secured Indebtedness; (xv) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged or amalgamated into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided further, however, that after giving effect to such acquisition, merger or amalgamation: (1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or (2) the Fixed Charge Coverage Ratio of the Issuer would be greater than or equal to such ratio immediately prior to such acquisition; (xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its Incurrence; -46-

(xvii) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee, provided that if (i) the Indebtedness represented by such letter of credit or bank guarantee is incurred under any of the clauses of this Section 4.03(b) and (ii) the Indebtedness incurred under this clause (xvii) is at any time no longer supported by such letter of credit or bank guarantee, then the Indebtedness previously incurred under this clause (xvii) shall be classified under the preceding paragraph or under another available clause in this paragraph and if such Indebtedness may not be so reclassified, then an Event of Default under this Indenture shall be deemed to have occurred; (xviii) Contribution Indebtedness; (xix) if the Issuer could not Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Non-Guarantor Restricted Subsidiaries Incurred for working capital purposes and any refinancings of such Indebtedness; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xix), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred (or deemed Incurred pursuant to Section 4.03(b)(xiv) above) pursuant to this clause (xix), does not exceed $25 million; and (xx) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries to fund losses, damages, liabilities, claims, costs and expenses (including attorney's fees, interest, penalties, judgments and settlements, collectively, "Losses"), by reason of any litigation existing on October 17, 2005 disclosed in the Offering Memorandum (including the financial statements incorporated by reference therein) or relating to the same facts and circumstances of such proceedings; provided that (as certified in an Officers' Certificate delivered to the Trustee) (1) the Issuer has provided to Cendant or its successor notice in respect of such Losses and has a reasonable good faith belief it is entitled to be indemnified by Cendant or such successor pursuant to the Stock Purchase Agreement in respect of such Losses and (2) the Indebtedness Incurred pursuant to this clause (xx) is in an amount equal to or less than the amount of the Losses for which indemnification is claimed; provided further that (1) after 30 days of the Issuer's receiving funds in satisfaction of such indemnity or (2) if Cendant or such successor gives written notice to the Issuer or a Restricted Subsidiary that it disputes the Issuer's entitlement to indemnity with respect to any Losses and (A) such dispute is not challenged by the Issuer within 30 days of receipt of such notice or (B) there is a final judgment of a court of competent jurisdiction confirming that the Issuer is not entitled to such indemnity which judgment is not discharged, waived or stayed for a period of 60 days, any amounts Incurred pursuant to this clause (xx) in respect of such indemnity that remain outstanding shall no longer be permitted under this clause (xx) and shall be deemed to be Incurred on such date. (c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock -47-

described in Section 4.03(b)(i) through (xx) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.03 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to one or more of such clauses Section 4.03(b)(i) through (xx) or pursuant to Section 4.03(a). Notwithstanding the foregoing, Indebtedness under the Credit Agreement outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause 4.03(b)(i) above and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness outstanding on the Issue Date. Accrual of interest, the accretion of accreted value, amortization or original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03. (d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollarequivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. (e) (i) the Issuer shall not Incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of the Issuer unless it is subordinate in right of payment to the Notes to the same extent and (ii) the Issuer shall not permit any Guarantor to Incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Guarantor unless it is subordinate in right of payment to such Guarantor's Guarantee to the same extent. For purposes of this Section 4.03(e), no Indebtedness shall be deemed to be subordinated in right of payment to any other Indebtedness of the Issuer or any Guarantor, as applicable, solely by reason of any Liens or Guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them. -48-

SECTION 4.04. Limitation on Restricted Payments. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of the Issuer's or any of its Restricted Subsidiaries' Equity Interests, including any payment with respect to such Equity Interests made in connection with any merger, amalgamation or consolidation involving the Issuer (other than (A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or (B) dividends or distributions by a Restricted Subsidiary on its common Equity Interests so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities); (ii) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any Parent of the Issuer, including in connection with any merger, amalgamation or consolidation; (iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any Restricted Subsidiary (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses 4.03(b)(vii) and (ix)); or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment: (1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (2) immediately after giving effect to such transaction on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been Incurred, (i) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) and (ii) the Consolidated Leverage Ratio of the Issuer would have been less than 5.0 to 1; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after October 17, 2005 (including Restricted Payments permitted by clauses (i), (iv) (only to the extent of one-half of the amount paid pursuant to such clause), (vi) (vii), (viii) and (xviii) of Section 4.04(b), but excluding all other Restricted -49-

Payments permitted by the next succeeding paragraph), is less than the sum, without duplication, of: (A) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from July 1, 2005 to the end of the Issuer's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); provided, however, that, to the extent the Consolidated Leverage Ratio of the Issuer on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been Incurred would have been less than 3.0 to 1, then 75% of the Consolidated Net Income of the Issuer for the aforementioned period shall be included pursuant to this clause (3)(A), plus (B) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer after October 17, 2005 from the issue or sale of Equity Interests of the Issuer or any Parent of the Issuer (excluding (without duplication) Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and the Cash Contribution Amount) including Equity Interests (other than Refunding Capital Stock, Disqualified Stock or Designated Preferred Stock) issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries), plus (C) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash after October 17, 2005 (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock, the Cash Contribution Amount and contributions by a Restricted Subsidiary), plus (D) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary after October 17, 2005 in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Issuer or any Restricted Subsidiary after October 17, 2005 from: (I) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary of the Issuer) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from -50-

the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any of its Restricted Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to Section 4.04(b)(vii) or (x)), (II) the sale (other than to the Issuer or a Restricted Subsidiary of the Issuer) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to Section 4.04(b)(vii) or (x) or to the extent such Investment constituted a Permitted Investment) or (III) a distribution, dividend or other payment from an Unrestricted Subsidiary, plus (E) in the event any Unrestricted Subsidiary of the Issuer has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary of the Issuer after October 17, 2005, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investments of the Issuer in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to (b)(vii) or (x) of this Section 4.04 or constituted a Permitted Investment). The Fair Market Value of property other than cash covered by clauses 3(B), (C), (D) and (E) above shall be determined in good faith by the Board of Directors of the Issuer and (x) in the event of property with a Fair Market Value in excess of $10.0 million, shall be set forth in an Officers' Certificate or (y) in the event of property with a Fair Market Value in excess of $25.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Issuer. (b) The provisions of Section 4.04(a) shall not prohibit: (i) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture; (ii) (a) the repurchase, retirement or other acquisition of any Equity Interests ("Retired Capital Stock") of the Issuer, any Parent of the Issuer or Subordinated -51-

Indebtedness of the Issuer, any Parent of the Issuer or any Subsidiary Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale (other than the Cash Contribution Amount, Excluded Contributions or the sale of any Disqualified Stock or Designated Preferred Stock or any Equity Interests sold to a Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer or any of its Subsidiaries) of Equity Interests of the Issuer or any Parent of the Issuer or contributions to the equity capital of the Issuer (collectively, including any such contributions, "Refunding Capital Stock") and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer or any of its Subsidiaries) of Refunding Capital Stock; (iii) the redemption, repayment, repurchase or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the holders of such Subordinated Indebtedness) of, new Indebtedness of the Issuer or any Subsidiary Guarantor which is Incurred in accordance with Section 4.03 so long as (A) the principal amount of such new Indebtedness does not exceed the principal amount of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired plus any fees incurred in connection therewith), (B) such Indebtedness is Incurred by the Issuer or by a Subsidiary Guarantor in respect of refinanced Indebtedness of a Subsidiary Guarantor and, in each case, is subordinated to the Notes, or the related Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired for value, (C) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) at least 91 days later than the maturity date of the Notes, and (D) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired; (iv) the repurchase, retirement or other acquisition for value (or dividends to any Parent of the Issuer to finance any such repurchase, retirement or other acquisition for value) of Equity Interests of the Issuer or any Parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer, any Parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option -52-

plan or any other management or employee benefit plan or other agreement or arrangement made after October 17, 2005; provided, however, that the aggregate amounts paid under this clause (iv) do not exceed $12.5 million in any calendar year commencing with 2005 (with unused amounts in any calendar year being permitted to be carried over to the following two calendar years subject to a maximum payment (without giving effect to the following proviso) of $25 million in any calendar year); provided further however, that such amount in any calendar year may be increased by an amount not to exceed: (A) the cash proceeds received by the Issuer or any of its Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock or Designated Preferred Stock) of the Issuer after October 17, 2005 to members of management, directors or consultants of the Issuer, any Parent of the Issuer and Restricted Subsidiaries of the Issuer (provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(b)(iii)(C)); plus (B) the cash proceeds of key man life insurance policies received by the Issuer, any Parent of the Issuer (to the extent contributed to the Issuer) or the Restricted Subsidiaries of the Issuer after October 17, 2005; less (C) the amount of any Restricted Payments previously made pursuant to Sections 4.04(b)(iv)(A) and (B); (v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued or incurred in accordance with Section 4.03; (vi) the declaration and payment of dividends or distributions (a) to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after October 17, 2005 and (b) to any Parent of the Issuer, the proceeds of which shall be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any Parent of the Issuer issued after October 17, 2005; provided, however, that (A) in the case of subclause (a) and (b) of this Section 4.04(b)(vi), for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under Section 4.03(a) and (B) the aggregate amount of dividends declared and paid pursuant to subclause (a) and (b) of this Section 4.04(b)(vi) does not exceed the net cash proceeds actually received by the Issuer or any Restricted Subsidiary of the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; (vii) Investments in Unrestricted Subsidiaries since October 17, 2005 having an aggregate Fair Market Value, taken together with all other Investments made pursuant -53-

to this clause (vii) that are at that time outstanding, not to exceed $35 million at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided that the dollar amount of Investments made pursuant to this clause (vii) shall not be reduced by the sale, disposition or other transfer of such Investments unless the proceeds of such sale, disposition or other transfer are received by the Issuer and/or its Restricted Subsidiaries; (viii) the payment of dividends on the Issuer's common Capital Stock (or the payment of dividends to any Parent of the Issuer to fund the payment by such Parent of the Issuer of dividends on such entity's common Capital Stock) of up to 7.5% per annum of the net cash proceeds received by or contributed to the Issuer from any public offering of common Capital Stock, other than public offerings with respect to common Capital Stock of the Issuer or any Parent of the Issuer registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution; (ix) Investments that are made with Excluded Contributions; (x) other Restricted Payments since October 17, 2005 in an aggregate amount not to exceed $40 million; (xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer by, Unrestricted Subsidiaries (other than to the extent such Investments were made pursuant to clauses (vii) or (x) of this Section 4.04(b) or pursuant to clauses (9) or (10) of the definition of Permitted Investments); (xii) (a) with respect to each tax year or portion thereof that any direct or indirect parent of the Issuer qualifies as a Flow Through Entity, the distribution by the Issuer to the holders of Capital Stock of such direct or indirect parent of the Issuer of an amount equal to the product of the amount of aggregate net taxable income of the Issuer allocated by the Issuer to the holders of Capital Stock of the Issuer for such period and the Presumed Tax Rate for such period; and (b) with respect to any tax year or portion thereof that any direct or indirect parent of the Issuer does not qualify as a Flow Through Entity, payment of dividends or other distributions to any direct or indirect parent of the Issuer that files a consolidated U.S. federal tax return that includes the Issuer and its subsidiaries in an amount not to exceed the amount that the Issuer and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes, as the case may be, in respect of such year if the Issuer and its Restricted Subsidiaries had paid such taxes directly as a stand-alone taxpayer or stand-alone group; (xiii) the declaration and payment of dividends to, or the making of loans to, any Parent of the Issuer (a) in amounts required for such entity to pay general corporate overhead expenses (including salaries, bonuses, benefits paid to management and employees of any Parent and professional and administrative expenses) for any direct or indirect parent entity of the Issuer to the extent such expenses are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries and (b) in amounts -54-

required for any Parent of the Issuer to pay interest and/or principal on Indebtedness that satisfies each of the following: (i) the proceeds of which were contributed to the Issuer or any of its Restricted Subsidiaries, (ii) that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with Section 4.03 and (iii) that was incurred (A) to refund, refinance or defease Indebtedness of such Parent of the Issuer or the Issuer and (B) pursuant to Section 4.03(a) or Section 4.03(b)(xiv); (xiv) any Restricted Payment used to fund the Transactions and the fees and expenses related thereto or made in connection with the consummation of the Transactions (including payments made pursuant to or as contemplated by the Transaction Documents, whether payable on October 17, 2005 or thereafter), or owed by any Parent of the Issuer, the Issuer or Restricted Subsidiaries of the Issuer to Affiliates, in each case to the extent permitted by Section 4.07; (xv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; (xvi) payments of cash, or dividends, distributions or advances by the Issuer or any Restricted Subsidiary to allow any such entity to make payments of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of Capital Stock of any such Person; provided, however, that the aggregate amount of such payments, dividends, distributions or advances does not exceed $4 million; (xvii) (a) the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness, Disqualified Stock or Preferred Stock of the Issuer and its Restricted Subsidiaries and (b) the payment of dividends, distributions and advances to any Parent of the Issuer to allow such Parent to purchase, repurchase, redeem or otherwise acquire or retire for value shares of Seller Preferred Stock, in each case pursuant to provisions similar to those of Section 4.06 and 4.08; provided that, prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes as a result of such Change of Control or Asset Sale, as the case may be, and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer, as the case may be; and (xviii) the payment of dividends, distributions and advances to any Parent of the Issuer to allow such Parent to make interest payments with respect to any Indebtedness of Holdings, including the Holdings Senior Notes. provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (iv), (v), (vi), (vii), (viii), (x), (xi), (xvii) and (xviii) of this Section 4.04(b), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof. -55-

The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued by this covenant shall be determined in good faith by senior management or the Board of Directors of the Issuer. (c) As of the Issue Date, all of the Issuer's Subsidiaries (except for Affinion Loyalty, LLC and Affinion Investments, LLC) shall be Restricted Subsidiaries. The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the last sentence of the definition of "Investments." Such designation shall only be permitted if Restricted Payments or Permitted Investments in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to: (a) (i) pay dividends or make any other distributions to the Issuer or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to the Issuer or any of its Restricted Subsidiaries; (b) make loans or advances to the Issuer or any of its Restricted Subsidiaries; or (c) sell, lease or transfer any of its properties or assets to the Issuer or any of its Restricted Subsidiaries; except in each case for such encumbrances or restrictions existing under or by reason of: (1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement, other Senior Credit 1 Documents and the indentures governing the 11 /2% Senior Subordinated Notes and the Holdings Senior Notes; (2) this Indenture and the Notes (and any Exchange Notes and Guarantees thereof); (3) applicable law or any applicable rule, regulation or order; (4) any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not -56-

created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (5) contracts or agreements for the sale of assets, including customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary; (6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness; (7) restrictions on cash or other deposits or net worth imposed by customers, suppliers or other vendors under contracts entered into in the ordinary course of business; (8) customary provisions in joint venture agreements and other similar agreements (including customary provisions in agreements relating to any Joint Venture); (9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in Section 4.05(c) on the property so acquired; (10) customary provisions contained in leases, licenses, contracts and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in Section 4.05(c) on the property subject to such lease; (11) [Reserved]; (12) other Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Issuer that is Incurred subsequent to the Issue Date and permitted pursuant to Section 4.03; provided that such encumbrances and restrictions contained in any agreement or instrument shall not materially affect the Issuer's ability to make anticipated principal or interest payments on the Notes (as determined in good faith by senior management or the Board of Directors of the Issuer); and (13) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) of this Section 4.05 imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Issuer, no more restrictive as a whole with respect to such encumbrances and restrictions than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. -57-

For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common Capital Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary of the Issuer to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances. SECTION 4.06. Asset Sales. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Issuer or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Board of Directors of the Issuer) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of: (i) any liabilities (as shown on the Issuer's or such Restricted Subsidiary's most recent balance sheet) of the Issuer or any Restricted Subsidiary of the Issuer (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets, (ii) any notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary of the Issuer from such transferee that are converted by the Issuer or such Restricted Subsidiary of the Issuer into cash within 180 days of the receipt thereof (to the extent of the cash received), and (iii) any Designated Non-cash Consideration received by the Issuer or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by the Board of Directors of the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of $50 million or 2.5% of Total Assets of the Issuer at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a). (b) Within 365 days after the receipt by the Issuer or any Restricted Subsidiary of the Issuer of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary of the Issuer may apply the Net Proceeds from such Asset Sale, at its option: (i) to repay (x) Secured Indebtedness, including Indebtedness under the Credit Agreement and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto, (y) Pari Passu Indebtedness (provided that if the Issuer or any Guarantor shall so reduce Obligations under Pari Passu Indebtedness (other than Pari Passu Indebtedness that is Secured Indebtedness), the Issuer shall equally and ratably reduce Obligations under the Notes if the Notes are then -58-

prepayable or, if the Notes may not then be prepaid, by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes that would otherwise be prepaid) or (z) Indebtedness of a Non-Guarantor Restricted Subsidiary, in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer; or (ii) to make an investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Issuer), or capital expenditures or assets, in each case used or useful in a Similar Business; and/or (iii) to make an investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Issuer), properties or assets that replace the properties and assets that are the subject of such Asset Sale or Event of Loss; provided that in the case of this Section 4.06(b)(ii) and (iii), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as to purchase (x) such purchase is consummated within 545 days after the receipt by the Issuer or any Restricted Subsidiary of the Net Proceeds of any Asset Sale and (y) if such purchase is not consummated within the period set forth in subclause (x), the Net Proceeds not so applied shall be deemed to be Excess Proceeds (as defined below). (c) Pending the final application of any Net Proceeds from an Asset Sale, the Issuer or such Restricted Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in Cash Equivalents or Investment Grade Securities. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in clause (b) of this Section 4.06 (it being understood that any portion of such Net Proceeds used to make an offer to purchase the Notes, as described in Section 4.06(b)(i), shall be deemed to have been invested whether or not such offer is accepted) shall be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $25 million, the Issuer shall make an offer to all holders of Notes (and, at the option of the Issuer, to holders of any Pari Passu Indebtedness) (an "Asset Sale Offer") to purchase the maximum principal amount of Notes (and such Pari Passu Indebtedness) that is an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $25 million by mailing or -59-

electronically transmitting the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in accordance with Section 4.06(f) in the case of Notes (and any such Pari Passu Indebtedness shall be selected in accordance with the agreement governing such Pari Passu Indebtedness). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. (d) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof. (e) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, the Issuer shall deliver to the Trustee an Officers' Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Sections 4.06(b) and (c). On such date, the Issuer shall also irrevocably deposit with the Trustee or with a paying agent (or, if a Wholly Owned Restricted Subsidiary of the Issuer is acting as a Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by the Issuer, and to be held for payment in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the "Offer Period"), the Issuer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuer. The Trustee (or a Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the Excess Proceeds delivered by the Issuer to the Trustee is greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuer immediately after the expiration of the Offer Period for application in accordance with this Section 4.06. (f) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receive not later than one Business Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, the principal amount of the Notes (and Pari Passu Indebtedness) to be purchased shall be determined pro rata based on the principal amounts so tendered and the selection of the actual Notes of each series for purchase shall be -60-

made by the Trustee on a pro rata basis to the extent practicable; provided, however, that no Notes of $2,000 or less shall be purchased in part. (g) Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid or electronically transmitted, at least 30 but not more than 60 days before the purchase date to each Holder at such Holder's registered address and to the Trustee. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased. (h) A new Note in principal amount equal to the unpurchased portion of any Note purchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the purchase date, unless the Issuer defaults in payment of the purchase price, interest shall cease to accrue on Notes or portions thereof purchased. SECTION 4.07. Transactions with Affiliates. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an "Affiliate Transaction") involving aggregate consideration in excess of $5 million, unless: (i) such Affiliate Transaction is on terms that are not less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and (ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer approving such Affiliate Transaction and set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with Section 4.07(a)(i). (b) The provisions of Section 4.07(a) shall not apply to the following: (i) transactions between or among the Issuer and/or any of its Restricted Subsidiaries; (ii) Restricted Payments permitted by the provisions of Section 4.04 and Investments under the definition of "Permitted Investments;" (iii) the entering into of any agreement (and any amendments or modifications to such agreements) to pay, and the payment of, (i) management, consulting, monitoring and advisory fees and expenses to the Sponsor in an aggregate amount in any fiscal year not to exceed the greater of (x) $5 million and (y) 2% of Consolidated Cash Flow, and expense reimbursement, in each case made pursuant to any agreement, or any agreement contemplated by such agreement, each as described or incorporated by reference in the Offering Memorandum and (ii) the termination fees pursuant to the Sponsor Consulting -61-

Agreement not to exceed the amount set forth in the Sponsor Consulting Agreement as in effect on October 17, 2005; (iv) the payment of reasonable and customary fees to, and indemnity provided on behalf of officers, directors, employees or consultants of the Issuer, any Parent of the Issuer or any Restricted Subsidiary of the Issuer; (v) payments by the Issuer or any of its Restricted Subsidiaries to the Sponsor made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) approved by a majority of the Board of Directors of the Issuer in good faith or (y) made pursuant to any agreement, or any agreement contemplated by such agreement, each as described or incorporated by reference in the Offering Memorandum; (vi) transactions in which the Issuer or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 4.07(a)(i); (vii) payments or loans (or cancellation of loans) to employees or consultants that are (x) approved by a majority of the Board of Directors of the Issuer in good faith, (y) made in compliance with applicable law and (z) otherwise permitted under this Indenture; (viii) any agreement as in effect as of October 17, 2005 and any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on October 17, 2005) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of the Issuer; (ix) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, the Transaction Documents and any amendment thereto or similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after October 17, 2005 shall only be permitted by this clause (ix) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on October 17, 2005; (x) transactions to effect the Transactions and the payment of all fees and expenses related to the Transactions, as described or incorporated by reference in the Offering Memorandum; -62-

(xi) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are fair to the Issuer or the Restricted Subsidiaries, in the reasonable determination of the members of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as would reasonably have been entered into at such time with an unaffiliated party; (xii) if otherwise permitted under this Indenture, the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Permitted Holder or to any director, officer, employee or consultant of the Issuer or any Parent of the Issuer; (xiii) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or of a Restricted Subsidiary of the Issuer, as appropriate, in good faith; (xiv) the entering into of any tax sharing agreement or arrangement and any payment permitted by Section 4.04(b)(xii); (xv) any contribution to the capital of the Issuer; (xvi) transactions between the Issuer or any of its Restricted Subsidiaries and any Person, a director of which is also a director of the Issuer or any direct or indirect parent company of the Issuer; provided, however, that such director abstains from voting as a director of the Issuer or such direct or indirect parent company, as the case may be, on any matter involving such other Person; (xvii) pledges of Equity Interests of Unrestricted Subsidiaries; and (xviii) any employment agreements entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business. SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of Control, each holder shall have the right to require the Issuer to repurchase all or any part of such holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), except to the extent the Issuer has previously elected to redeem Notes pursuant to Paragraph 5 in the form of the Notes set forth in Appendix A. -63-

(b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes pursuant to Paragraph 5 of the form of the Notes set forth in Appendix A, the Issuer shall mail or electronically transmit (or cause to be mailed or electronically transmitted) a notice (a "Change of Control Offer") to each holder with a copy to the Trustee stating: (i) that a Change of Control has occurred and that such holder has the right to require the Issuer to purchase such holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date); (ii) the circumstances and relevant facts and financial information regarding such Change of Control; (iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent); and (iv) the instructions determined by the Issuer, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased. The Issuer shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer. (c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. The Holders shall be entitled to withdraw their election if the Trustee or the Issuer receive not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (d) On the purchase date, all Notes purchased by the Issuer under this Section shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest to the Holders entitled thereto. (e) Notwithstanding the foregoing provisions of this Section, the Issuer shall be deemed to have made a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with -64-

the requirements set forth in Section 4.08(b) applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. (f) At the time the Issuer delivers Notes to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officers' Certificate stating that such Notes are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder. (g) Prior to any Change of Control Offer, the Issuer shall deliver to the Trustee an Officers' Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with. (h) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.08. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this paragraph by virtue thereof. SECTION 4.09. Compliance Certificate. (a) The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuer they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto. The Issuer also shall comply with Section 314(a)(4) of the TIA. (b) When any Default has occurred and is continuing under this Indenture, the Issuer shall deliver to the Trustee, within 30 days after the occurrence thereof by registered or certified mail or facsimile transmission, an Officer's Certificate specifying such event, notice or other action or inaction, its status and what action the Issuer is taking or proposes to take in respect thereto. SECTION 4.10. Further Instruments and Acts. Upon request of the Trustee, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.11. Future Guarantors. (a) The Issuer shall cause each Restricted Subsidiary that Guarantees any Indebtedness of the Issuer or any of the Guarantors (excluding a Guarantee of Indebtedness of a Non-Guarantor Restricted Subsidiary issued by a Non-Guarantor Restricted Subsidiary) to execute and deliver to the Trustee a Supplemental Indenture pursuant to which such Restricted Subsidiary shall unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any and interest on the Notes on a senior or pari passu basis and all other obligations under this Indenture. -65-

(b) Notwithstanding Section 4.11(a), in the event any Guarantor is released and discharged in full from all of its obligations under Guarantees of (1) each Credit Agreement and (2) all other Indebtedness of the Issuer and its Restricted Subsidiaries, then the Guarantee of such Guarantor shall be automatically and unconditionally released or discharged; provided that such Restricted Subsidiary has not incurred any Indebtedness or issued any Preferred Stock in reliance on its status as a Guarantor under Section 4.03 unless such Guarantor's obligations under such Indebtedness or Preferred Stock, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted under one of the exceptions available at the time of such release to Restricted Subsidiaries under Section 4.03(b). (c) Each Guarantee shall be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Guarantee shall be released in accordance with Article Ten of this Indenture. SECTION 4.12. Liens. The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under this Indenture with respect to the Notes and the Notes are secured on an equal and ratable basis with the obligations so secured (or, in the case of Indebtedness subordinated to the Notes or the related Guarantees, prior or senior thereto, with the same relative priority as the Notes shall have with respect to such subordinated Indebtedness) until such time as such obligations are no longer secured by a Lien. SECTION 4.13. Maintenance of Office or Agency. (a) The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the corporate trust office of the Trustee as set forth in Section 13.02. (b) The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. (c) The Issuer hereby designate the corporate trust office of the Trustee or its Agent, as such office or agency of the Issuer in accordance with Section 2.04. -66-

ARTICLE 5 MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets. (a) The Issuer may not consolidate, amalgamate or merge with or into or wind up into (whether or not the Issuer is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless: (i) the Issuer is a surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (the Issuer or such Person, as the case may be, being herein called the "Successor Issuer"); (ii) the Successor Issuer (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee; (iii) immediately after giving effect to such transaction no Default or Event of Default shall have occurred and be continuing; (iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable fourquarter period (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction), either (A) the Successor Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or (B) the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction; (v) each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person's obligations under this Indenture and the Notes; (vi) if the Successor Issuer is not organized as a corporation after such transaction, a successor corporation which is a Subsidiary of the Successor Issuer shall -67-

continue to be co-obligor of the Notes and shall have by supplemental indenture confirmed its obligations under this Indenture and the Notes; and (vii) the Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. The Successor Issuer (if other than the Issuer) shall succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and the Issuer shall automatically be released and discharged from its obligations under this Indenture and the Notes, but in the case of a lease of all or substantially all of its assets, the Issuer shall not be released from the obligations to pay the principal of and interest on the Notes. Notwithstanding the foregoing Section 5.01(a)(iii) and (iv), (a) any Restricted Subsidiary may consolidate or amalgamate with, merge into, sell, assign or transfer, lease, convey or otherwise dispose of all or part of its properties and assets to the Issuer or to another Restricted Subsidiary and (b) the Issuer may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of incorporating or organizing the Issuer in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby (any transaction described in this sentence a "Specified Merger/Transfer Transaction"). This Section 5.01 shall not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and its Restricted Subsidiaries. For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer. (b) Subject to Section 10.02(b), each Subsidiary Guarantor shall not, and the Issuer shall not permit any Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless: (i) either (A) such Subsidiary Guarantor is a surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition is made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the "Successor Guarantor") and the Successor Guarantor (if other than such Subsidiary Guarantor) expressly assumes all the obligations of such Subsidiary Guarantor -68-

under this Indenture and such Subsidiary Guarantor's Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee; or (B) such sale or other disposition or consolidation or merger complies with Section 4.06; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (iii) any Successor Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. The Successor Guarantor shall succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture and such Subsidiary Guarantor's Guarantee, and such Subsidiary Guarantor shall automatically be released and discharged from its obligations under this Indenture and such Subsidiary Guarantor's guarantee. Notwithstanding Section 5.01(b)(ii), (i) a Subsidiary Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated or organized solely for the purpose of incorporating or organizing such Subsidiary Guarantor in another state of the United States, the District of Columbia or any territory of the United States, so long as the amount of Indebtedness of the Subsidiary Guarantor is not increased thereby and (ii) a Subsidiary Guarantor may merge, amalgamate or consolidate with another Subsidiary Guarantor or the Issuer. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. An "Event of Default" with respect to all of the Notes occurs if: (a) a default in any payment of interest on, or Additional Interest with respect to, the Notes when due that continues for 30 days; (b) a default in the payment of principal or premium, if any, of the Notes when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (c) the failure by the Issuer or any of its Restricted Subsidiaries to comply with the provisions set forth in Article Five of this Indenture; -69-

(d) the failure by the Issuer or any of its Restricted Subsidiaries to comply for 30 days after notice with any of its obligations under Article Four of this Indenture (other than a failure to purchase Notes); (e) the failure by the Issuer or any of the Restricted Subsidiaries of the Issuer to comply for 60 days after notice with its other agreements contained in the Notes or this Indenture, (f) the failure by the Issuer or any Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to a Restricted Subsidiary of the Issuer) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $30 million or its foreign currency equivalent (the "crossacceleration provision"), (g) the Issuer or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or (iv) makes a general assignment for the benefit of its creditors (v) or takes any comparable action under any foreign laws relating to insolvency, (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Issuer or any Significant Subsidiary in an involuntary case; (ii) appoints a Custodian of the Issuer or any Significant Subsidiary or for any substantial part of its property; or (iii) orders the winding up or liquidation of the Issuer or any Significant Subsidiary; or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days, (the provisions under 6.01(g) and (h) are collectively referred to herein as the "bankruptcy provisions");

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(i) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $30 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days (the "judgment default provision"), or (j) any Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary denies or disaffirms its obligations under this Indenture or any Guarantee and such Default continues for 10 days. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A default under Section 5.01(d) and (e) shall not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the Notes outstanding notify the Issuer of the default and the Issuer does not cure such default within the time specified in Section 5.01(d) and (e) hereof after receipt of such notice. SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes outstanding by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(g) or (h) occurs, the principal of, premium, if any, and interest on all the Notes shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. In the event of any Event of Default specified in Section 6.01(f) occurs, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officers' Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes be annulled, waived or rescinded upon the happening of any such events. -71-

The Holders of a majority in principal amount of the Notes by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration; provided, however, that if the Notes were accelerated as a result of an Event of Default described in clause (a) or (b) of Section 6.01, Holders of a majority in principal amount of the outstanding Notes must also agree to rescind such acceleration and its consequences. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 6.04. Waiver of Past Defaults. When a Default is waived, it is deemed cured and the Issuer, the Trustee and the Holders shall be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.06. Limitation on Suits. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless: (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount of the Notes outstanding have requested the Trustee to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity (reasonably satisfactory to the Trustee) against any loss, liability or expense, -72-

(iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. (b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders). SECTION 6.07. Rights of the Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01 (a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; -73-

SECOND: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and THIRD: to the Issuer or, to the extent the Trustee collects any amount on behalf of or which is owed to any Guarantor, to such Guarantor. The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail or electronically transmit to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes. SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements -74-

of this Indenture. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith unless it is proved by a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and (iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct or negligence. -75-

(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney, at the expense of the Issuer and shall incur no liability of any kind by reason of making or not making such inquiry or investigation. (g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder. (i) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. (j) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Guarantee or the Notes, it shall not be accountable for the Issuer's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer or any Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the -76-

Trustee's certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (i) or (j) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received notice thereof in accordance with Section 13.02 hereof from the Issuer, any Guarantor or any Holder. SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing with respect to the Notes and if it is actually known to the Trustee, the Trustee shall mail or electronically transmit to each Holder of the Notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on the Notes, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders. SECTION 7.06. Reports by Trustee to the Holders. As promptly as practicable after each August 1 beginning with the August 1 following the date of this Indenture, and in any event prior to September 1 in each year, the Trustee shall mail or electronically transmit to each Holder a brief report dated as of such August 1 that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA. A copy of each report at the time of its mailing or electronic transmission to the Holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed. The Issuer agrees to notify promptly the Trustee whenever the Notes become listed on any stock exchange and/or of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Issuer shall pay to the Trustee from time to time reasonable compensation for its services, as agreed in writing among the parties. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it (including attorney's fees and expenses), including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Issuer and each Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys' fees and expenses) incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Guarantee against the Issuer or a Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person). The Trustee shall have no liability or responsibility for any action or inaction on the part of any Paying Agent, Registrar, authentication agent (aside from the Trustee acting in such capacities and subject to the terms hereof) or any successor trustee or the Custodian. The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the -77-

indemnified party shall provide reasonable cooperation at the Issuer's expense in the defense. Such indemnified parties may have separate counsel and the Issuer and the Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, that the Issuer shall not be required to pay such fees and expenses if it assumes such indemnified parties' defense and, in such indemnified parties' reasonable judgment, there is no conflict of interest between the Issuer and the Guarantors, as applicable, and such parties in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party's own willful misconduct, negligence or bad faith as proven by a court of competent jurisdiction. To secure the Issuer's and the Guarantors' payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes. The Issuer's and the Guarantors' payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(g) or (h) with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if: (i) the Trustee fails to comply with Section 7.10; (ii) the Trustee is adjudged bankrupt or insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee otherwise becomes incapable of acting. (b) If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. (c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail or electronically transmit a notice of its succession to the Holders. The retiring Trustee shall promptly transfer all -78-

property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07. (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee fails to comply with Section 7.10, unless the Trustee's duty to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of Notes issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer is outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met. SECTION 7.11. Preferential Collection of Claims Against Issuer. The Trustee shall comply with Section 311 (a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311 (a) of the TIA to the extent indicated. -79-

ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of registration or transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes and the obligations under this Indenture with respect to the Holders of the Notes when: (i) either (a) all the Notes theretofore authenticated under this Indenture and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation or (b) all of the Notes under this Indenture (i) have become due and payable, (ii) shall become due and payable at their Stated Maturity within one year or (iii) if redeemable at the option of the Issuer, have been called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; (ii) the Issuer has and/or the Guarantors have paid all other sums payable under this Indenture; and (iii) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. (b) Subject to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all of its obligations under the Notes and this Indenture with respect to the Notes ("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11 and 4.12 for the benefit of the Notes and the operation of Section 5.01 and Sections 6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only) and 6.01(i) for the benefit of the Notes ("covenant defeasance option"). In the event that the Issuer terminates its obligations under the Notes and this Indenture by exercising its legal defeasance option or its covenant defeasance option, the obligations of each Guarantor under its Guarantee shall be terminated simultaneously with the termination of such obligations. -80-

The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Section 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only), 6.01(i) or 6.01(j) or because of the failure of the Issuer to comply with Section 4.08. Any exercise of the Issuer's covenant defeasance option or legal defeasance option shall not have any effect on the Notes and their rights under this Indenture or on the obligations of the Issuer and the Guarantors with respect to the Notes. Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminate. (c) Notwithstanding clauses (a) and (b) above, the Issuer's obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08 and in this Article 8 shall survive until all the Notes have been paid in full. Thereafter, the Issuer's obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and discharge. SECTION 8.02. Conditions to Defeasance. (a) The Issuer may exercise its legal defeasance option or its covenant defeasance option only if: (i) the Issuer irrevocably deposits in trust with the Trustee in respect of cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient or U.S. Government Obligations, the principal of and the interest on which shall be sufficient, or a combination thereof sufficient, to pay the principal of, and premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date; (ii) the Issuer deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment shall provide cash at such times and in such amounts as shall be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be; (iii) 123 days pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(g) or (h) with respect to the Issuer occurs which is continuing at the end of the period; (iv) the deposit does not constitute a default under any other agreement binding on the Issuer and its Restricted Subsidiaries; -81-

(v) the Issuer deliver to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (vi) in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer; (vii) in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and (viii) the Issuer deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article 8 have been complied with. (b) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article 3. SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or Government Obligations (including proceeds thereof) deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased. SECTION 8.04. Repayment to the Issuer. Each of the Trustee and each Paying Agent shall promptly turn over to the Issuer upon request any money or Government Obligations held by it as provided in this Article which, in the written opinion of nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article. -82-

Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies. SECTION 8.05. Indemnity for Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited Government Obligations or the principal and interest received on such Government Obligations. SECTION 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer's and the Guarantors' obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or any Paying Agent is permitted to apply all such money or Government Obligations in accordance with this Article 8; provided, however, that, if the Issuer has made any payment of principal of or interest on, any such Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or any Paying Agent. ARTICLE 9 AMENDMENTS AND WAIVERS SECTION 9.01. Without Consent of the Holders. The Issuer, the Guarantors and the Trustee may amend this Indenture or the Notes without notice to or consent of any Holder: (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a Successor Issuer of the obligations of the Issuer under this Indenture and the Notes in compliance with Article 5; (iii) to provide for the assumption by a Successor Guarantor of the obligations of a Subsidiary Guarantor under this Indenture and its Guarantee in compliance with Article 5 of this Indenture; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code); (v) to add Guarantees with respect to the Notes or to secure the Notes; (vi) to add to the covenants of the Issuer for the benefit of the Holders or to surrender any right or power conferred upon the Issuer; -83-

(vii) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA; (viii) to make any change that does not adversely affect the rights of any Holder; (ix) to effect any provision of this Indenture; or (x) to make certain changes to this Indenture to provide for the issuance of Additional Notes. After an amendment under this Section 9.01 becomes effective, the Issuer shall send or cause to be sent to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. SECTION 9.02. With Consent of the Holders. (a) The Issuer and the Trustee may amend this Indenture or the Notes with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes) and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each Holder of an outstanding Note affected, an amendment may not: (i) reduce the amount of Notes whose Holders must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest on any Note, (iii) reduce the principal of or change the Stated Maturity of any Note, (iv) reduce the premium payable upon the redemption of any Note or change the time when any Note may be redeemed in accordance with Article 3 of this Indenture or Paragraph 5 of Appendix A of this Indenture, (v) make any Note payable in money other than that stated in such Note, (vi) impair the right of any holder to receive payment of principal of, premium, if any, and interest on such Holder's Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Notes, (vii) make any change in the amendment provisions which require each Holder's consent or in the waiver provisions, (viii) expressly subordinate the Notes or any Guarantee thereof to any other Indebtedness of the Issuer or any Guarantor, or -84-

(ix) modify the Guarantees in any manner adverse to the Holders. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. (b) After an amendment under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit (or cause to be mailed or electronically transmitted) to the Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02. SECTION 9.03. Compliance with Trust Indenture Act. From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Notes shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate from the Issuer certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of consents by the Holders of the requisite principal amount of Notes, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee. (b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver. -85-

SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and the Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). SECTION 9.07. Payment for Consent. The Issuer shall not, and shall not permit any of the Subsidiaries of the Issuer to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indentures or the Notes unless such consideration is offered to be paid and is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. SECTION 9.08. Additional Voting Terms; Calculation of Principal Amount. Except as expressly provided in this Indenture, including under Section 9.02, all Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article Nine and Section 2.14. ARTICLE 10 GUARANTEES SECTION 10.01. Guarantees. (a) Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety on a senior basis, to each Holder and to the Trustee (or any Paying Agent, Registrar, authenticating agent and transfer agent acting on the Trustee's behalf), and the Trustee's successor and assigns (or the successor and assign of any Paying Agent, Registrar, authenticating agent and transfer agent acting on the Trustee's behalf) (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Issuer under this Indenture (including obligations to the Trustee (or any Paying Agent, Registrar, authenticating agent and transfer agent acting on the Trustee's behalf) and the Notes, whether for payment of principal of, premium, if any, or interest on in respect of the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the "Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such -86-

Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation. (b) Each Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person under this Indenture, the Notes, any Transaction Document, or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes, any Transaction Document or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes, any Transaction Document or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor, except as provided in Section 10.02(b). (c) Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantor's obligations would be less than the full amount claimed. Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuer or any other Guarantor first be used and depleted as payment of the Issuer's or such Guarantor's obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Guarantor. (d) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations. (e) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes, any Transaction Document or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity. -87-

(f) Each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise. (g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuer to the Holders and the Trustee. (h) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 10.01. (i) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01. (j) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 10.02. Limitation on Liability; Release. (a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. -88-

(b) A Guarantee as to any Restricted Subsidiary shall terminate and be of no further force or effect and such Subsidiary Guarantor shall be deemed to be released from all obligations under this Article 10 upon: (i) (A) the sale, disposition or other transfer (including through merger, amalgamation or consolidation) of the Capital Stock of the applicable Subsidiary Guarantor, following which such Subsidiary Guarantor is no longer a Restricted Subsidiary, if such sale, disposition or other transfer is made in compliance with this Indenture; (B) the Issuer designating a Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of "Unrestricted Subsidiary" (C) in the case of any Restricted Subsidiary which after the Issue Date, is required to guarantee the Notes pursuant to Section 4.11, the release or discharge of the guarantee by such Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock, in each case, which resulted in the obligation to guarantee the Notes; or (D) the Issuer's exercise of the legal defeasance option under Section 8.01(b) or if the Issuer's obligations under this Indenture are otherwise discharged in accordance with Section 8.01(a); and (ii) in the case of Section 10.02(b)(i)(A), such Guarantor is released from its guarantees, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer. A Guarantee shall also be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof. SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee -89-

and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise. SECTION 10.05. Modification. No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances. SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors. Each Person which is required to become a Guarantor after the Issue Date pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Appendix B hereto pursuant to which such Person shall become a Guarantor under this Article 10 and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officers' Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors' rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request. ARTICLE 11 [INTENTIONALLY OMITTED] ARTICLE 12 [INTENTIONALLY OMITTED] ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an "incorporated provision") included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control. -90-

SECTION 13.02. Notices. (a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile, electronically transmitted or mailed by first-class mail addressed as follows: if to the Issuer or a Guarantor: Affinion Group, Inc. 6 High Ridge Park Stamford, CT 06905 Attention of: General Counsel Facsimile: (203) 956-1206 if to the Trustee: Wells Fargo Bank, National Association Corporate Trust Services 625 Marquette Avenue South MAC N9311-110 Minneapolis, MN 55479 Attention of: Affinion Account Manager Facsimile: 612-667-9825 The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (b) Any notice or communication mailed to a Holder shall be mailed, first class mail or electronically transmitted, to the Holder at the Holder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed or electronically transmitted within the time prescribed. (c) Failure to mail or electronically transmit a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed or electronically transmitted in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received. SECTION 13.03. Communication by the Holders with Other Holders. The Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA. SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee: (a) an Officers' Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and -91-

(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include: (a) a statement that the individual making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials. SECTION 13.06. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of the Holders. The Registrar and a Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected. SECTION 13.09. Governing Law; Waiver of Jury Trial. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY -92-

WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 13.10. No Recourse Against Others. No director, officer, employee, incorporator or holder of any Equity Interests in the Issuer, as such, shall have any liability for any obligations of the Issuer under the Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. SECTION 13.11. Successors. All agreements of the Issuer and each Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. One signed copy is enough to prove this Indenture. SECTION 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. SECTION 13.14. Indenture Controls. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control. SECTION 13.15. Severability. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability. SECTION 13.16. Currency of Account; Conversion of Currency; Foreign Exchange Restrictions. (a) U.S. Dollars are the sole currency of account and payment for all sums payable by the Issuer and the Guarantors under or in connection with the Notes, the Guarantees and this Indenture, including damages related thereto. Any amount received or recovered in a currency other than U.S. Dollars by a Holder (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer or otherwise) in respect of any sum expressed to be due to it from the Issuer or a Guarantor shall only constitute a discharge to the Issuer or any such Guarantor to the -93-

extent of the U.S. Dollar amount, which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the U.S. Dollar amount expressed to be due to the recipient under the Notes, the Issuer and the Guarantors shall indemnify it against any loss sustained by it as a result as set forth in Section 13.16(b). In any event, the Issuer and the Guarantors shall indemnify the recipient against the cost of making any such purchase. For the purposes of this Section 13.16, it shall be sufficient for the Holder of a Note to certify in a satisfactory manner (indicating sources of information used) that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable, it being required that the need for a change of date be certified in the manner mentioned above). (b) The Issuer and the Guarantors, jointly and severally, covenant and agree that the following provisions shall apply to conversion of currency in the case of the Notes, the Guarantees and this Indenture: (14) (A) If for the purpose of obtaining judgment in, or enforcing the judgment of, any court in any country, it becomes necessary to convert into a currency (the "Judgment Currency") an amount due in any other currency (the "Base Currency"), then the conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which the judgment is given or the order of enforcement is made, as the case may be (unless a court shall otherwise determine). (B) If there is a change in the rate of exchange prevailing between the Business Day before the day on which the judgment is given or an order of enforcement is made, as the case may be (or such other date as a court shall determine), and the date of receipt of the amount due, the Issuer and the Guarantors shall pay such additional (or, as the case may be, such lesser) amount, if any, as may be necessary so that the amount paid in the Judgment Currency when converted at the rate of exchange prevailing on the date of receipt will produce the amount in the Base Currency originally due. (15) In the event of the winding-up of the Issuer or any Guarantor at any time while any amount or damages owing under the Notes, the Guarantees and this Indenture, or any judgment or order rendered in respect thereof, shall remain outstanding, the Issuer and the Guarantors shall indemnify and hold the Holders and the Trustee harmless against any deficiency arising or resulting from any variation in rates of exchange between (i) the date as of which the foreign currency equivalent of the amount due or contingently due under the Notes, the Guarantees and this Indenture (other than under this subsection (b)(2)) is calculated for the purposes of such winding-up and (ii) the final date for the filing of proofs of claim in such winding-up. For the purpose of this subsection (b)(2), the final date for the filing of proofs of claim in the winding-up of the Issuer or any Guarantor shall be the date fixed by the liquidator or otherwise in accordance with the relevant provisions of applicable law as being the latest practicable -94-

date as at which liabilities of the Issuer or such Guarantor may be ascertained for such winding-up prior to payment by the liquidator or otherwise in respect thereto. (A) The obligations contained in subsections (a), (b)(1)(B) and (b)(2) of this Section 13.16 shall constitute separate and independent obligations from the other obligations of the Issuer and the Guarantors under this Indenture, shall give rise to separate and independent causes of action against the Issuer and the Guarantors, shall apply irrespective of any waiver or extension granted by any Holder or the Trustee or either of them from time to time and shall continue in full force and effect notwithstanding any judgment or order or the filing of any proof of claim in the winding-up of the Issuer or any Guarantor for a liquidated sum in respect of amounts due hereunder (other than under subsection (b)(2) above) or under any such judgment or order. Any such deficiency as aforesaid shall be deemed to constitute a loss suffered by the Holders or the Trustee, as the case may be, and no proof or evidence of any actual loss shall be required by the Issuer or any Guarantor or the liquidator or otherwise or any of them. In the case of subsection (b)(2) above, the amount of such deficiency shall not be deemed to be reduced by any variation in rates of exchange occurring between the said final date and the date of any liquidating distribution. (B) The term "rate(s) of exchange" shall mean the rate of exchange quoted by Reuters at 10:00 a.m. (New York time) for spot purchases of the Base Currency with the Judgment Currency other than the Base Currency referred to in subsections (b)(1) and (b)(2) above and includes any premiums and costs of exchange payable. SECTION 13.17. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act. SECTION 13.18. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances. -95-

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. AFFINION GROUP, INC., By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer AFFINION BENEFITS GROUP, LLC AFFINION DATA SERVICES, INC. AFFINION GROUP, LLC AFFINION LOYALTY ACQUISITION, LLC AFFINION LOYALTY GROUP, INC. AFFINION PUBLISHING, LLC CARDWELL AGENCY, INC. CCAA, CORPORATION CONNEXIONS LOYALTY TRAVEL SOLUTIONS LLC GLOBAL PRIVACY SOLUTIONS, LLC INTERNATIONAL TRAVEL FULFILLMENT LLC LONG TERM PREFERRED CARE, INC. LOYALTY TRAVEL AGENCY LLC TRAVELERS ADVANTAGE SERVICES, INC. TRILEGIANT AUTO SERVICES, INC. TRILEGIANT CORPORATION TRILEGIANT INSURANCE SERVICES, INC. TRILEGIANT RETAIL SERVICES, INC. WATCHGUARD REGISTRATION SERVICES, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer CUC ASIA HOLDINGS, by its partners Trilegiant Corporation By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer Trilegiant Retail Services, Inc. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer Indenture Signature Page

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ Lynn M. Steiner Name: Lynn M. Steiner Title: Vice President Indenture Signature Page

APPENDIX A (Rule 144A/REGULATION S/IAI APPENDIX) PROVISIONS RELATING TO INITIAL NOTES, PRIVATE EXCHANGE NOTES AND EXCHANGE NOTES 1. Definitions 1.1 Definitions

For the purposes of this Appendix the following terms shall have the meanings indicated below: "Applicable Procedures" means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time. "Definitive Note" means a certificated Initial Note or Exchange Note or Private Exchange Note bearing, if required, the appropriate restricted notes legend set forth in Section 2.3(e). "Depository" means The Depository Trust Company, its nominees and their respective successors. "Distribution Compliance Period", with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes. "Exchange Notes" means the notes issued pursuant to this Indenture in connection with the Registered Exchange Offer pursuant to the Registration Rights Agreement. "Exchange Offer Registration Statement" means the registration statement to be filed with the SEC pursuant to the Registration Rights Agreement with respect to a proposed offer to exchange the Initial Notes, and Additional Notes, if applicable, for Exchange Notes. "IAI" means an institutional "accredited investor", as defined in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act. "Initial Purchasers" means (a) with respect to the Initial Notes issued on the Issue Date, Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and (b) with respect to each issuance of Additional Notes, the Persons purchasing or underwriting such Additional Notes under the related Purchase Agreement. "Initial Notes" means the initial $475,000,000 in aggregate principal amount of 7.875% Senior Notes due 2018 issued on the Issue Date.

"Notes" means the Initial Notes, the Exchange Notes and the Private Exchange Notes treated as a single class. "Notes Custodian" means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto, and shall initially be the Trustee. "Private Exchange" means the offer by the Issuer, pursuant to the Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each such Initial Purchaser, in exchange for the Initial Notes held by such Initial Purchaser as part of the initial distribution of such Initial Notes, a like aggregate principal amount of Private Exchange Notes. "Private Exchange Notes" means any Notes issued in connection with a Private Exchange. "Purchase Agreement" means (a) with respect to the Initial Notes issued on the Issue Date, the Purchase Agreement dated November 8, 2010, among the Issuer, the Guarantors and the Initial Purchasers and (b) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Issuer, the Guarantors and the Persons purchasing or underwriting such Additional Notes. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registered Exchange Offer" means the offer by the Issuer, pursuant to the Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act. "Registration Rights Agreement" means (1) with respect to the Initial Notes issued on the Issue Date, the Registration Rights Agreement dated November 19, 2010, among the Issuer, the Guarantors and the Initial Purchasers and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Issuer and the Persons purchasing such Additional Notes under the related Purchase Agreement. "Rule 144A Notes" means all Notes offered and sold to QIBs in reliance on Rule 144A. "Securities Act" means the Securities Act of 1933, as amended. "Shelf Registration Statement" means the registration statement issued by the Issuer in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to the Registration Rights Agreement. "Transfer Restricted Notes" means Notes that bear or are required to bear a legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e). 2

1.2

Other Definitions
Defined in Section:

Term

"Agent Members" "Global Note" "IAI Global Note" "Permanent Regulation S Global Note" "Regulation S" "Regulation S Global Note" "Rule 144A" "Rule 144A Global Note" "Temporary Regulation S Global Note" 2. The Notes

2.1(b) 2.1 (a) 2.1 (a) 2.1 (a) 2.1 (a) 2.1 (a) 2.1 (a) 2.1 (a) 2.1 (a)

2.1 (a) Form and Dating. The Initial Notes shall be offered and sold by the Issuer pursuant to the Purchase Agreement. The Initial Notes shall be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act ("Regulation S"). Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the "Rule 144A Global Note"); Initial Notes initially resold to IAIs shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the "IAI Global Note"); and Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global notes in fully registered form (collectively, the "Temporary Regulation S Global Note"), in each case without interest coupons and with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note shall not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note, a permanent global note (the "Permanent Regulation S Global Note", and together with the Temporary Regulation S Global Note, the "Regulation S Global Note") or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note, an IAI Global Note or the Permanent Regulation S Global Note only upon certification in form reasonably satisfactory to the Trustee that (i) beneficial ownership interests in such Temporary Regulation S Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act and (ii) in the case of an exchange for an IAI Global Note, certification that the interest in the Temporary Regulation S Global Note is being transferred to an institutional "accredited investor" under the Securities Act that is an institutional accredited investor acquiring the Notes for its own account or for the account of an institutional accredited investor. 3

Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) or IAI Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, is being transferred to a Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable laws of the States of the United States and other jurisdictions. Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) and Rule 144A Global Notes may be exchanged for an interest in IAI Global Notes if (1) such exchange occurs in connection with a transfer of the Notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note or Rule 144A Global Note, as applicable, first delivers to the trustee a written certificate (substantially in the form of Exhibit 2) to the effect that (A) the Regulation S Global Note or Rule 144A Global Note, as applicable, is being transferred (a) to an "accredited investor" within the meaning of 501(a)(1),(2),(3) and (7) under the Securities Act that is an institutional investor acquiring the Notes for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the Notes of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act and (B) in accordance with all applicable securities laws of the States of the United States and other jurisdictions. Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in this Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable). The Rule 144A Global Note, the IAI Global Note, the Temporary Regulation S Global Note and the Permanent Regulation S Global Note are collectively referred to herein as "Global Notes". The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided. (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository. The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as custodian for the Depository. 4

Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Issuer, the Trustee and any agent of the Issuer, the Guarantors or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Guarantors, the Trustee or any agent of the Issuer, the Guarantors or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note. (c) Definitive Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Definitive Notes. 2.2 Authentication

The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $475,000,000 of Initial Notes, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Issuer pursuant to Section 2.03 of this Indenture and (3) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to the Registration Rights Agreement, for a like principal amount of Initial Notes, in each case upon a written order of the Issuer signed by one Officer. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance and Additional Notes pursuant to Section 2.01 of this Indenture, shall certify that such issuance is in compliance with Section 4.03 of this Indenture. 2.3 Transfer and Exchange (a) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request: (x) to register the transfer of such Definitive Notes; or (y) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange: (i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and (ii) if such Definitive Notes are required to bear a restricted notes legend, they are being transferred or exchanged pursuant to an effective registration statement under 5

the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable: (A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or (B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect; or (C) if such Definitive Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (b) Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A Global Note, an IAI Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with: (i) certification, in the form set forth on the reverse of the Note, that such Definitive Note is either (A) being transferred to a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Note in reliance on Regulation S to a buyer who elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; (ii) written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global Note (in the case of a transfer pursuant to clause (b)(i)(B) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(C)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase, and (iii) if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an opinion of counsel in form reasonably acceptable to the Registrar and the Issuer to the effect that such exchange or transfer is in compliance with the Securities Act 6

and that the restrictions on transfer contained herein and in the applicable restricted notes legend is no longer required in order to maintain compliance with the Securities Act, then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Definitive Note so canceled. If no Rule 144A Global Notes, IAI Global Notes or Permanent Regulation S Global Notes, as applicable, are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon written order of the Issuer in the form of an Officers' Certificate of the Issuer, a new Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount. (c) Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions, instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred. (ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred. (iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. (iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange 7

Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer. (v) In the event that a Transfer Restricted Note represented by a Global Note is exchanged for an unrestricted Global Note pursuant to this Section 2.3, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions hereof (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer. (d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Issuer, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States. (e) Legend. (i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof), in the case of Notes offered otherwise than in reliance on Regulation S, shall bear a legend in substantially the following form: THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER, (II) IN THE UNITED STATES TO A 8

PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a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ach certificate evidencing a Note offered in reliance on Regulation S shall, in lieu of the foregoing, bear a legend in substantially the following form: THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. Each Definitive Note shall also bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER SHALL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. (ii) Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer 9

Restricted Note for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note). (iii) After a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note shall cease to apply, the requirements requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form shall cease to apply, and a certificated Initial Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, shall be available to the transferee of the Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring Holder's certificated Initial Note or Private Exchange Note or directions to transfer such Holder's interest in the Global Note, as applicable. (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form, in each case without the restricted notes legend set forth in Exhibit 1 hereto, shall be available to Holders that exchange such Initial Notes in such Registered Exchange Offer. (v) Upon the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form shall still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto shall be available to Holders that exchange such Initial Notes in such Private Exchange. (vi) Each certificate evidencing a Note shall, in addition to the foregoing, bear a legend in substantially the following form. IN CONNECTION WITH ANY TRANSFER, THE HOLDER SHALL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the 10

books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction. (f) No Obligation of the Trustee.

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 2.4 Certificated Notes

(a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Issuer that it is unwilling or unable to continue as Depository for such Global Note and the Depository fails to appoint a successor depositary or if at any time such Depository ceases to be a "clearing agency" registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Issuer within 90 days of such notice, or (ii) a Default or Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes under this Indenture. (b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal corporate trust office, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion 11

of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $2,000 principal amount and any integral multiple of $1,000 and registered in such names as the Depository shall direct. Any Definitive Note delivered in exchange for an interest in the Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted notes legend and definitive note legend set forth in Exhibit 1 hereto. (c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes. (d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive Notes in definitive, fully registered form without interest coupons. In the event that such Definitive Notes are not issued, the Issuer expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.06 of this Indenture, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owner's Notes as if such Definitive Notes had been issued. 12

EXHIBIT 1 to APPENDIX A (Rule 144A/Regulation S/IAI APPENDIX) [FORM OF FACE OF INITIAL NOTE OR ADDITIONAL NOTE] [Global Notes Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. [[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.] [Restricted Notes Legend for Notes Offered Otherwise than in Reliance on Regulation S] THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER, (II) WITHIN THE UNITED

STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER SHALL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. [Restricted Notes Legend for Notes Offered in Reliance on Regulation S] THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. [Temporary Regulation S Global Note Legend] EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE SHALL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN 2

THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE ISSUER, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE SHALL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE. AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN AN IAI GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH AN EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE OR AN IAI GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER 3

BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE). [Definitive Notes Legend] IN CONNECTION WITH ANY TRANSFER, THE HOLDER SHALL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. 4

AFFINION GROUP, INC. 7.875% Senior Notes due 2018 144A CUSIP No. 00828D AM3 and ISIN No. US00828DAM39 REG S CUSIP No. U00831 AE4 and ISIN No. USU00831AE44 No. [ ] $[ ] ]

Dollars ($[

AFFINION GROUP, INC., a Delaware corporation, promises to pay to CEDE & CO., or its registered assigns, the principal sum of [ ]) on December 15, 2018. Interest Payment Dates: June 15, and December 15 Record Dates: June 1 and December 1 Additional provisions of this Note are set forth on the other side of this Note.

Dated: November 19, 2010 SIGNATURE PAGE FOLLOWS 5

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed. Dated: November 19, 2010 AFFINION GROUP, INC. By Name: Nathaniel J. Lipman Title: Chief Executive Officer TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee, certifies that this is one of the Notes referred to in the Indenture. By Authorized Signatory

[FORM OF REVERSE SIDE OF INITIAL NOTE OR ADDITIONAL NOTE] 7.875% Senior Notes due 2018 1. Interest

Affinion Group, Inc., a Delaware corporation (such Person, and its respective successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer") promises to pay interest on the principal amount of this Note at a rate per annum of 7.875%; provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, additional interest shall accrue on this Note at a rate of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which such Registration Default occurs up to a maximum additional interest rate of 1.00%) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Issuer shall pay interest semiannually in arrears to the holders of the Notes on June 15 and December 15 of each year, commencing June 15, 2011. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest on overdue principal at the rate borne by this Note plus 1.0% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment

The Issuer shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of business on the June 1 or December 1 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depository; provided further that accrued Additional Interest in respect the Notes represented by a Global Note may also be made by federal funds check. The Issuer shall make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Note shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar

Initially, Wells Fargo Bank, National Association (the "Trustee"), shall act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or 7

co-registrar without notice. The Issuer or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture

The Issuer issued the Notes under an Indenture dated as of November 19, 2010 (the "Indenture"), among the Issuer, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-77bbbb) (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Act for a statement of those terms. The Notes are unsecured obligations of the Issuer and consist of the 7.875% Senior Notes due 2018 and any Additional Notes that may be issued after the Issue Date. The Indenture contains covenants that, among other things, limit the ability of the Issuer and its Restricted Subsidiaries to Incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture. 5. Optional Redemption Except as set forth below, the Issuer shall not be entitled to redeem the Notes. At any time on or prior to December 15, 2014, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice sent electronically or mailed by first-class mail to each Holder's registered address, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). On and after December 15, 2014, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice sent electronically or mailed by first-class mail to each Holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on December 15 of the years set forth below: 8

Year

Redemption Price

2014 2015 2016 and thereafter

103.938% 101.969% 100.000%

Notwithstanding the foregoing, at any time and from time to time on or prior to December 15, 2013, the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more (a) Equity Offerings by the Issuer, (b) Equity Offerings by any Parent of the Issuer, to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, or (c) Subsidiary Spin-Offs, at a redemption price equal to 107.875% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) must remain outstanding after each such redemption; provided, further, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days' notice sent electronically or mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer's discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering. 6. Notice of Redemption

Notice of redemption shall be mailed by first-class mail or electronically transmitted at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at his registered address. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption. 7. Put Provisions

Except as set forth in the Indenture, the occurrence of any Change of Control shall constitute an Event of Default under the Indenture unless the Issuer (i)(A) makes an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a "Change of Control Offer") at a purchase price (the "Change of Control Purchase Price") equal to 101% of the principal amount thereof, plus accrued and unpaid 9

interest (if any) to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercises its right, within 30 days following such Change of Control, to redeem all the Notes as described under Paragraph 5 of this Note. 8. Guarantee

The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several basis by each of the Guarantors to the extent set forth in the Indenture. 9. Denominations; Transfer; Exchange

The Notes are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days before the redemption date of the Notes or 15 days before an interest payment date. 10. Persons Deemed Owners The registered Holder of this Note may be treated as the owner of it for all purposes. 11. Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment. 12. Discharge and Defeasance

Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of its and the Guarantors' obligations under the Notes and the Indenture if the Issuer deposit with the Trustee money or, in certain cases, U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be. 13. Amendment, Waiver

Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Notes may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Notes and (b) any default or noncompliance with any provision may 10

be waived with the written consent of the Holders of a majority in principal amount outstanding of the Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer, the Guarantors and the Trustee shall be entitled to amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a Successor Issuer of the obligations of the Issuer under the Indenture and hereunder, to provide for the assumption by a Successor Guarantor of the obligations of a Subsidiary Guarantor under the Indenture and its Guarantee, to provide for uncertificated Notes in addition to or in place of certificated Notes, to add Guarantees with respect to the Notes, to secure the Notes, to add to the covenants of the Issuer for the benefit of Holders or to surrender any right or power conferred upon the Issuer, to make any change that does not adversely affect the rights of any Holder to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Act, or to effect any provision of the Indenture or to make certain changes to the Indenture to provide for the issuance of Additional Notes. 14. Defaults and Remedies

Under the Indenture, Events of Default include (1) a default in any payment of interest on, or Additional Interest with respect to, any Note when due that continues for 30 days, (2) a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, (3) the failure by the Issuer or any of its Restricted Subsidiaries to comply with the provisions described under Article 5 of the Indenture (4) the failure by the Issuer or any of its Restricted Subsidiaries to comply for 30 days after notice with any of its obligations under Article 4 of the Indenture (other than a failure to purchase Notes), (5) the failure by the Issuer or any of the Restricted Subsidiaries of the Issuer to comply for 60 days after notice with its other agreements contained in the Notes or the Indenture, (6) the failure by the Issuer or any Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to a Restricted Subsidiary of the Issuer) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $30 million or its foreign currency equivalent, (7) certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary, (8) the failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $30 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days and (9) any Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary denies or disaffirms its obligations under the Indenture or any Guarantee and such Default continues for 10 days. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all such Notes to be due and payable immediately, subject to certain conditions set forth in the Indenture. Certain events of bankruptcy or insolvency are Events of Default which shall result in the Notes being due and payable immediately upon the occurrence of such Events of Default. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a 11

majority in principal amount of the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders. 15. Trustee Dealings with the Issuer

Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. 16. No Recourse Against Others

A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided, however, the foregoing shall not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes. 17. Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 18. Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 19. CUSIP Numbers

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 12

20.

Holders' Compliance with Registration Rights Agreement

Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Issuer to the extent provided therein. 21. Governing Law; Waiver of Jury Trial THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. The Issuer shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to: Affinion Group, Inc. 6 High Ridge Park Stamford, CT 06905 Attention: General Counsel 13

ASSIGNMENT FORM To assign this Note, fill in the form below: I or we assign and transfer this Note to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:

Your Signature:

Sign exactly as your name appears on the other side of this Note. In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Notes are being transferred in accordance with its terms: CHECK ONE BOX BELOW to the Issuer; or (1) pursuant to an effective registration statement under the Securities Act of 1933; or (2) inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (3) outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or (4) pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or 1

(5) to an institutional "accredited investor" (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements. Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3), (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act. Signature Signature Guarantee: Signature must be guaranteed Signature

Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: Notice: To be executed by an executive officer 3

[TO BE ATTACHED TO GLOBAL NOTES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE The following increases or decreases in this Global Note have been made:
Principal amount of this Global Note following such decrease or increase

Date of Exchange

Amount of decrease in Principal amount of this Global Note

Amount of increase in Principal amount of this Global Note

Signature of authorized signatory of Trustee or Notes Custodian

OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box: If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $ Dated: Your Signature: (Sign exactly as your name appears on the other side of this Note.) Signature Guarantee: (Signature must be guaranteed) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 5

EXHIBIT A FORM OF FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE*/**/ */ **/ If the Note is to be used in global form add the Global Notes Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE". If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1 to Appendix A and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1.

AFFINION GROUP, INC. 7.875% Senior Notes due 2018 [144A CUSIP No. [ ] and ISIN No. [ ]] [REG S CUSIP No. [ ] and ISIN No. [ ]] [CUSIP No. [ ] and ISIN No. [ ]] No.[ ] $[ ]

Dollars ($[

AFFINION GROUP, INC., a Delaware corporation promises to pay to CEDE & CO., or its registered assigns, the principal sum of [ ]) on December 15, 2018. Interest Payment Dates: June 15 and December 15 Record Dates: June 1 and December 1 Additional provisions of this Note are set forth on the other side of this Note.

Dated: [SIGNATURE PAGE FOLLOWS] 2

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed. Dated: AFFINION GROUP, INC. By Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee, certifies that this is one of the Notes referred to in the Indenture. By Authorized Signatory 3

EXHIBIT A [FORM OF REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE] 7.875% Senior Notes due 2018 [The form of the Notes should be substantially the same (other than the restrictive legends), whether they are the Initial Notes, Exchange Notes or Private Exchange Notes.] 1. Interest

Affinion Group, Inc., a Delaware corporation (such Person, and its respective successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer") promises to pay interest on the principal amount of this Note at a rate per annum of 7.875% [; provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, additional interest shall accrue on this Note at a rate of 0.25% per annum (increasing by an additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which such Registration Default occurs up to a maximum additional interest rate of 1.00%) from and including the date on which any such Registration Default shall occur 1 to but excluding the date on which all Registration Defaults have been cured.] The Issuer shall pay interest semiannually in arrears to the holders of the Notes on June 15 and December 15 of each year, commencing June 15, 2011. Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest on overdue principal at the rate borne by this Note plus 1.0% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment

The Issuer shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders of Notes at the close of business on the June 1 or December 1 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depository; provided further that accrued Additional Interest in respect the Notes represented by a Global Notes may also be made by federal funds check. The Issuer shall make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Note shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank
1

Insert if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs.

in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar

Initially, Wells Fargo Bank, National Association (the "Trustee"), shall act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Issuer or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture

The Issuer issued the Notes under an Indenture dated as of November 19, 2010 (the "Indenture"), among the Issuer, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-77bbbb) (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Act for a statement of those terms. The Notes are unsecured obligations of the Issuer and consist of the 7.875% Senior Notes due 2018 and any Additional Notes that may be issued after the Issue Date. The Indenture contains covenants that, among other things, limit the ability of the Issuer and its Restricted Subsidiaries to Incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture. 5. Optional Redemption Except as set forth below, the Issuer shall not be entitled to redeem the Notes. At any time on or prior to December 15, 2014 the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice sent electronically or mailed by first-class mail to each Holder's registered address, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). On and after December 15, 2014, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice sent electronically or mailed by first-class mail to each Holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued 2

and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on December 15 of the years set forth below:
Redemption Price

Year

2014 2015 2016 and thereafter

103.938% 101.969% 100.000%

Notwithstanding the foregoing, at any time and from time to time on or prior to December 15, 2013, the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more (a) Equity Offerings by the Issuer, (b) Equity Offerings by any Parent of the Issuer, to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, or (c) Subsidiary Spin-Offs, at a redemption price equal to 107.875% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) must remain outstanding after each such redemption; provided, further, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days' notice sent electronically or mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer's discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering. 6. Notice of Redemption

Notice of redemption shall be mailed by first-class mail or electronically transmitted at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at his registered address. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption. 3

7.

Put Provisions

Except as set forth in the Indenture, the occurrence of any Change of Control shall constitute an Event of Default under the Indenture unless the Issuer (i)(A) makes an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a "Change of Control Offer") at a purchase price (the "Change of Control Purchase Price") equal to 101% of the principal amount thereof, plus accrued and unpaid interest (if any) to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercises its right, within 30 days following such Change of Control, to redeem all the Notes as described under Paragraph 5 of this Note. 8. Guarantee

The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several basis by each of the Guarantors to the extent set forth in the Indenture. 9. Denominations; Transfer; Exchange

The Notes are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days before the redemption date of the Notes or 15 days before an interest payment date. 10. Persons Deemed Owners The registered Holder of this Note may be treated as the owner of it for all purposes. 11. Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment. 12. Discharge and Defeasance

Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of its and the Guarantors' obligations under the Notes and the Indenture if the Issuer deposit with the Trustee money or, in certain cases, U.S. Government 4

Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be. 13. Amendment, Waiver

Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Notes may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Notes and (b) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer, the Guarantors and the Trustee shall be entitled to amend the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a Successor Issuer of the obligations of the Issuer under the Indenture and hereunder, to provide for the assumption by a Successor Guarantor of the obligations of a Subsidiary Guarantor under the Indenture and its Guarantee, to provide for uncertificated Notes in addition to or in place of certificated Notes, to add Guarantees with respect to the Notes, to secure the Notes, to add to the covenants of the Issuer for the benefit of Holders or to surrender any right or power conferred upon the Issuer, to make any change that does not adversely affect the rights of any Holder to comply with any requirements of the SEC in connection with the qualification of the Indenture under the Act, or to effect any provision of the Indenture or to make certain changes to the Indenture to provide for the issuance of Additional Notes. 14. Defaults and Remedies

Under the Indenture, Events of Default include (1) a default in any payment of interest on, or Additional Interest with respect to, any Note when due that continues for 30 days, (2) a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, (3) the failure by the Issuer or any of its Restricted Subsidiaries to comply with the provisions described under Article 5 of the Indenture (4) the failure by the Issuer or any of its Restricted Subsidiaries to comply for 30 days after notice with any of its obligations under Article 4 of the Indenture (other than a failure to purchase Notes), (5) the failure by the Issuer or any of the Restricted Subsidiaries of the Issuer to comply for 60 days after notice with its other agreements contained in the Notes or the Indenture, (6) the failure by the Issuer or any Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to a Restricted Subsidiary of the Issuer) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $30 million or its foreign currency equivalent, (7) certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary, (8) the failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $30 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days and (9) any Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary denies or disaffirms its obligations under the Indenture or any Guarantee and such Default continues for 10 days. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal 5

amount of the Notes may declare all such Notes to be due and payable immediately, subject to certain conditions set forth in the Indenture. Certain events of bankruptcy or insolvency are Events of Default which shall result in the Notes being due and payable immediately upon the occurrence of such Events of Default. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders. 15. Trustee Dealings with the Issuer

Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. 16. No Recourse Against Others

A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided, however, the foregoing shall not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes. 17. Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 18. Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 19. CUSIP Numbers

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a 6

convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. [20. Holders' Compliance with Registration Rights Agreement Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the 2 obligations of the Holders with respect to a registration and the indemnification of the Issuer to the extent provided therein.] 21. Governing Law; Waiver of Jury Trial

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. The Issuer shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to: Affinion Group, Inc. 6 High Ridge Park Stamford, CT 06905 Attention: General Counsel
2

Delete if this Note is not being issued in exchange for an Initial Note. 7

ASSIGNMENT FORM To assign this Note, fill in the form below: I or we assign and transfer this Note to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:

Your Signature:

Sign exactly as your name appears on the other side of this Note. 8

OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box: If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $ Dated: Your Signature: (Sign exactly as your name appears on the other side of this Note.) Signature Guarantee: (Signature must be guaranteed) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 9

EXHIBIT 2 to Rule 144A/REGULATION S/IAI APPENDIX Form of Transferee Letter of Representation Affinion Group, Inc. 6 High Ridge Park Stamford, CT 06905 Wells Fargo Bank, National Association DAPS Reorg MAC N9303-121 608-2nd Avenue South Minneapolis, Minnesota 55479 Ladies and Gentlemen: This certificate is delivered to request a transfer of $[ ] principal amount of the 7.875% Senior Notes due 2018 (the "Notes") of Affinion Group, Inc., a Delaware corporation (the "Issuer"). Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows: Name: Address: Taxpayer ID Number: The undersigned represents and warrants to you that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor" at least $250,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase notes similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment. 2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing

Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the "Resale Restriction Termination Date") only (i) to the Issuer, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing for its own account or for the account of an institutional accredited investor, in each case in a minimum principal amount of the Notes of $250,000, (iv) outside the United States in a transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) subject to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale shall not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (iii), (iv) or (v) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee. TRANSFEREE: by: ,

APPENDIX B [FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY ADDITIONAL SUBSIDIARY GUARANTORS] SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of [ ] among [ ] (the "Additional Subsidiary Guarantor"), a [ ] corporation and a [direct] [indirect] subsidiary of Affinion Group, Inc. (or its permitted successor) ("Holdings"), Affinion Group, Inc., a Delaware corporation (the "Issuer"), and Wells Fargo Bank, National Association, as Trustee under the Indenture (the "Trustee"). WITNESSETH: WHEREAS the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an Indenture (the "Indenture"), dated as of November 19, 2010, providing for the issuance of Senior Notes (the "Notes"); WHEREAS, Section 4.11 and Section 10.06 of the Indenture provide that under certain circumstances the Issuer shall cause the Additional Subsidiary Guarantor to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary Guarantor shall Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and WHEREAS, pursuant to Section 9.01(iv) of the Indenture, the Trustee and the Issuer is authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Additional Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture. SECTION 2. Guarantees. The Additional Subsidiary Guarantor hereby agrees, jointly and severally with all other Guarantors, to guarantee the Issuer's obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture (including Article 11). SECTION 3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. SECTION 4. Governing Law; Waiver of Jury Trial. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO

CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. SECTION 6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. SECTION 7. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction of this Supplemental Indenture. 2

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above. AFFINION GROUP, INC., by Name: Title: [ADDITIONAL SUBSIDIARY GUARANTOR], by Name: Title: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee by Name: Title: 3

Exhibit 4.9 SUPPLEMENTAL INDENTURE NO. 1 SUPPLEMENTAL INDENTURE No. 1 (this "Supplemental Indenture"), dated as of February 11, 2011 among Webloyalty Holdings, Inc. ("WL Holdings"), a Delaware corporation and an indirect subsidiary of Affinion Group, Inc. (or its permitted successor), a Delaware corporation (the "Issuer"), Webloyalty.com, Inc. ("WL"), a Delaware corporation and an indirect subsidiary of the Issuer, Lift Media, LLC, a Delaware limited liability company and an indirect subsidiary of the Issuer ("LM", and together with WL Holdings and WL, the "Additional Subsidiary Guarantors"), the Issuer, and Wells Fargo Bank, National Association, as Trustee under the Indenture (the "Trustee"). WITNESSETH: WHEREAS the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an Indenture (the "Indenture"), dated as of November 19, 2010, providing for the issuance of Senior Notes (the "Notes"); WHEREAS, Section 4.11 and Section 10.06 of the Indenture provide that under certain circumstances the Issuer shall cause the Additional Subsidiary Guarantors to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary Guarantors shall Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and WHEREAS, pursuant to Section 9.01(v) of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Additional Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture. SECTION 2. Guarantees. The Additional Subsidiary Guarantors hereby agree, jointly and severally with all other Guarantors, to guarantee the Issuer's obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture (including Article 11). SECTION 3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. SECTION 4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. SECTION 6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 7. Effect of Headings. The section headings herein are for convenience only and shall not effect the construction of this Supplemental Indenture. [Rest of Page Intentionally Left Blank] 2

IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.

AFFINION GROUP, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer WEBLOYALTY HOLDINGS, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer WEBLOYALTY.COM, INC. By: /s/ Richard Fernandes Name: Title: LIFT MEDIA, LLC By: /s/ Richard Fernandes Name: Title:

Richard Fernandes Chief Executive Officer

Richard Fernandes Chief Operating Officer Supplemental Indenture No. 1 (Senior)

WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Lynn M. Steiner Name: Title:

Lynn M. Steiner Vice President

Supplemental Indenture No. 1 (Senior)

Exhibit 4.12 EXECUTION VERSION AFFINION GROUP, INC. $475,000,000 7.875% SENIOR NOTES DUE 2018 REGISTRATION RIGHTS AGREEMENT November 19, 2010 DEUTSCHE BANK SECURITIES INC. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED c/o Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005 Ladies and Gentlemen: Affinion Group, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the "Initial Purchasers"), upon the terms set forth in a purchase agreement dated November 8, 2010 (the "Purchase Agreement"), $475,000,000 aggregate principal amount of its 7.875% Senior Notes due 2018 (the "Initial Securities"). The Initial Securities will be unconditionally guaranteed (the "Senior Guarantees") on a senior basis by the guarantors listed on Schedule B to the Purchase Agreement (the "Guarantors"). The Initial Securities will be issued pursuant to the Indenture, dated as of November 19, 2010, (the "Indenture"), among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee (the "Trustee"). As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors agree with the Initial Purchasers, for the benefit of the Initial Purchasers and the holders of the Securities (as defined below) (collectively the "Holders"), as follows: 1. Registered Exchange Offer. Unless not permitted by applicable law or Commission (as defined below) policy, the Company and the Guarantors shall th prepare and use commercially reasonable efforts to file with the Securities and Exchange Commission (the "Commission") on or prior to the 180 day after the date of original issue of the Initial Securities (the "Issue Date") a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities of the Company issued under the Indenture, substantially identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) and registered under the Securities Act (the "Exchange Securities"). Unless not permitted by applicable law or Commission policy, the Company and the Guarantors shall use commercially reasonable th efforts (i) to cause such Exchange Offer Registration Statement to become effective under the Securities Act on or prior to the 300 day after the Issue Date and (ii) to keep the Exchange Offer Registration Statement effective for not less than 20 Business Days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period"). For purposes of this Agreement, "Business Day" shall mean a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in The City of New York. If the Company and the Guarantors commence the Registered Exchange Offer, the Company and the Guarantors (i) will be entitled to consummate the Registered Exchange Offer 20 Business Days after such commencement (provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer) and (ii) will be required to consummate the Registered Exchange Offer no later than 30 Business Days after the date on which the Exchange Offer Registration Statement is declared effective (such 30th Business Day being the "Consummation Deadline").

Following the declaration of the effectiveness of the Exchange Offer Registration Statement, unless not permitted by applicable law or Commission policy, the Company and the Guarantors shall, as soon as practicable, commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities (as defined in Section 6 hereof) electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company or any Guarantor within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company and the Guarantors acknowledge that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Securities (as defined below) acquired in exchange for Initial Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. The Company and the Guarantors shall keep the Exchange Offer Registration Statement effective and shall amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the consummation of the Registered Exchange Offer (or such shorter period during which such persons are required by applicable law to deliver such prospectus). If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the "Private Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "Securities". In connection with the Registered Exchange Offer, the Company shall: (a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Registered Exchange Offer open for not less than 20 Business Days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders; 2

(c) utilize the services of a depositary for the Registered Exchange Offer, which may be the Trustee or an affiliate of the Trustee; (d) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer shall remain open; and (e) otherwise comply in all material respects with all applicable laws. As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall: (x) accept for exchange all the Initial Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; (y) deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and (z) cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange. The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Initial Securities will vote and consent together on all matters as one class and that none of the Initial Securities will have the right to vote or consent as a class separate from one another on any matter. Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities. Each Holder participating in the Registered Exchange Offer shall be required to represent in writing (which may be contained in the applicable letter of transmittal) to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies as to form in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 3

2. Shelf Registration. If, (i) the Company and the Guarantors are not permitted to consummate a Registered Exchange Offer because the Registered Exchange Offer is not permitted by applicable law or Commission policy, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not th th consummated within 30 Business Days of the 300 day after the Issue Date, (iii) any Holder notifies the Company in writing on or prior to the 60 day after the consummation of the Registered Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Registered Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Registered Exchange Offer to the public without delivering a prospectus and that the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a broker-dealer, and holds Initial Securities acquired directly from the Company or one of its affiliates, the Company and the Guarantors shall take the following actions (the date on which any of the conditions described in the foregoing clauses (i) through (iii) occur, including in the case of clause (iii) the receipt of the required notice, being a "Trigger Date"): (a) The Company and the Guarantors shall, at their cost, file with the Commission on or prior to the 180th day after a Trigger Date and thereafter th th use commercially reasonable efforts to cause to be declared effective on or prior to the 300 day after the Trigger Date (such 300 day, the "Effectiveness Deadline") (unless it becomes effective automatically upon filing) a registration statement (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. (b) The Company and the Guarantors shall use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the date of its effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) can be sold pursuant to Rule 144 under the Securities Act, without being subject to (c), (e), (f) and (h) thereof). (c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 3. Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply: (a) The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use commercially reasonable efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser in 4

writing, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such brokerdealer in the Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include in the prospectus included in the Shelf Registration Statement (or if permitted by Commission Rule 430B(b), in a prospectus supplement that becomes part thereof pursuant to Commission Rule 430B(f) that is delivered to any Holder pursuant to Section 3(d) and (f)) the names of the Holders who propose to sell Securities pursuant to the Shelf Registration Statement as selling securityholders. (b) The Company shall give written notice to the Initial Purchasers, any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer and, in the case of a Shelf Registration only, each Holder of the Securities (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): (i) when the Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission after the Registration Statement has become effective for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, or the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed and of the happening of any event that causes the Company to become an "ineligible issuer" as defined in Commission Rule 405; (iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event during the period that the Registration Statement is effective that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading. (c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement. (d) The Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment or supplement thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). The Company shall not, without the prior written consent of the Initial Purchasers, make any offer relating to the Securities included in the Shelf Registration Statement that would constitute a "free writing prospectus" as defined in Commission Rule 405. 5

(e) The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference). (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement. (h) Prior to any public offering of the Securities pursuant to any Registration Statement the Company shall use commercially reasonable efforts to register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business or as a dealer in securities in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject. (i) The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement. (j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the 6

Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus; notwithstanding the foregoing, the Company shall not be required to amend or supplement a Registration Statement or any related prospectus if (i) an event occurs and is continuing as a result of which the Shelf Registration or any related prospectus would, in the Company's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading (with respect to such prospectus only, in light of the circumstances under which they were made) and (ii) (a) the Company determines in its good faith judgment that the disclosure of such event at such time would have a material adverse effect on its business, operations or prospects or (b) the disclosure otherwise relates to a pending material business transaction that has not yet been publicly disclosed; and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j). During the period during which the Company is required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company will, prior to the two-year expiration of that Shelf Registration Statement, file and use its commercially reasonable efforts to cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities which shall be deemed the "Shelf Registration Statement" for purposes of this Agreement. (k) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be. (l) The Company and the Guarantors will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to their security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period. (m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (n) The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request. (o) In the case of an offering of Securities to an underwriter or underwriters for reoffering to the public (an "Underwritten Offering") pursuant to any Shelf Registration, the Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration. (p) In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter, at reasonable times and in a reasonable manner, all relevant financial 7

and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof; and provided further that each such Holder, underwriter, attorney, accountant or agent shall agree in writing that it will keep such information confidential and that it will not disclose any of the information that the Company determines, in good faith, to be confidential and notifies them in writing is confidential unless (A) the disclosure of such information is necessary to avoid or correct a material misstatement or material omission in such Registration Statement or prospectus, (B) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or is reasonably necessary in order to establish a "due diligence" defense pursuant to Section 11 of the Securities Act, or (C) the information has been made generally available to the public other than by any of such persons or their respective affiliates; provided, however, that prior notice shall be provided as soon as practicable to the Company of the potential disclosure of any information by such person pursuant to clause (A) or (B) of this sentence in order to permit the Company to obtain a protective order (or to waive the provisions of this paragraph (p)). (q) In the case of an Underwritten Offering pursuant to any Shelf Registration, the Company, if requested by any Holder of Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form and covering matters customarily covered in opinions delivered in connection with such transactions and addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement; (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities; and (iii) its independent public accountants to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. (r) If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or caused to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied. (s) The Company will use its commercially reasonable efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any. (t) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the Financial Industry Regulatory Authority, Inc. (the "FINRA")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will cooperate with such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, at the expense of the Holders, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is 8

made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. 4. Registration Expenses. All expenses incident to the Company's performance of and compliance with this Agreement will be borne by the Company, regardless of whether a Registration Statement is ever filed or becomes effective, including without limitation; (a) all registration and filing fees and expenses; (b) all fees and expenses of compliance with federal securities and state "blue sky" or securities laws; (c) all expenses of printing (including printing of prospectuses), messenger and delivery services and telephone; (d) all fees and disbursements of counsel for the Company; and (e) all fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance). The Company will bear their internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any person, including special experts, retained by the Company. Each Holder shall pay all underwriting discounts and commissions, and the fees of any counsel retained by or on behalf of the underwriters, and transfer taxes, if any, related to the sale or disposition of a Holder's Securities pursuant to any Shelf Registration Statement. 5. Indemnification. (a) The Company and the Guarantors agree to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or "issuer free writing prospectus" as defined in Commission Rule 433 ("Issuer FWP"), relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that the Company and the Guarantors shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Indemnified Party and furnished to the Company by or on behalf of such Indemnified Party specifically for inclusion therein, provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company 9

and the Guarantors shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders. (b) Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company and the Guarantors and each person, if any, who controls the Company and the Guarantors within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or the Guarantors or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company or the Guarantors by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company and the Guarantors or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company and the Guarantors or any of its controlling persons. (c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses or more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Initial Purchaser, its affiliates, directors and officers and any control persons of such Initial Purchaser shall be designated in writing by Deutsche Bank Securities Inc. and any such separate firm for the Company and the Guarantors, and their respective directors and officers and any control persons of the Company and the Guarantors shall be designated in 10

writing by the Company. No indemnifying party shall, without the prior written consent of the indemnified party; provided that such consent is not unreasonably withheld or delayed, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 5 is unavailable or insufficient (although applicable in accordance with its terms) to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the issuance and sale by the Company and the Guarantors of the Initial Securities to the Initial Purchasers pursuant to the Purchase Agreement (which in the case of the Company shall be deemed to be equal to the total net proceeds from the Initial Placement received by the Company and the Guarantors), or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company or the Guarantors within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company and the Guarantors. (e) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 6. Additional Interest Under Certain Circumstances. (a) Additional interest (the "Additional Interest") with respect to the Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (v) below being herein called a "Registration Default"): (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement; 11

(ii) any of such Registration Statements is not declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the "Effectiveness Target Date"); (iii) the Registered Exchange Offer is not consummated on or prior to the 30 Business Day after the Effectiveness Target Date; (iv) if after either the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is declared (or becomes automatically) effective (A) such Registration Statement thereafter ceases to be effective; or (B) such Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales or exchanges of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder or (3) such Registration Statement is a Shelf Registration Statement that has expired before a replacement Shelf Registration Statement has become effective. Each of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to operation of law or as a result of any action or inaction by the Commission. Additional Interest shall accrue on the principal amount of the Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum (the "Additional Interest Rate") for the first 90-day period immediately following the occurrence of such Registration Default. The Additional Interest Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum Additional Interest Rate of 1.0% per annum. In no event shall the Company be obligated to pay Additional Interest for all Registration Defaults under more than one of the clauses in this Section 6(a) at any one time and, in the case of a Shelf Registration, it is expressly understood that Additional Interest should be payable only with respect to Securities so requested to be registered pursuant to Section 2 hereof. (b) A Registration Default referred to in Section 6(a)(v) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such posteffective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus, (y) other material events with respect to the Company or the Guarantors that would need to be described in such Shelf Registration Statement or the related prospectus or (z) the suspension of the effectiveness of such Registration Statement because the Company does not wish to disclose publicly a pending material business transaction that has not yet been publicly disclosed, and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that if (A) in the case of a Registration Default described in clause 6(b)(i)(x), such Registration Default occurs for a continuous period in excess of 30 days and (B) in the case of a Registration Default described in clause 6(b)(i)(y) or 6(b)(i)(z), such Registration Default occurs for a period of more than 45 days in any three-month period or more than an aggregate of 90 days in any 12-month period, then Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured. 12
th

(c) Any amounts of Additional Interest due pursuant to Section 6(a) will be payable in cash as provided in the Initial Securities on the regular interest payment dates with respect to the Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Securities and further multiplied by a fraction, the numerator of which is the number of days such Additional Interest Rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360. (d) "Transfer Restricted Securities" means each Security until (i) the date on which such Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144 under the Securities Act without being subject to clauses (c), (e), (f) and (h) thereof. 7. Agreement to Provide Information. The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 8. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering. No person may participate in any Underwritten Offering hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 9. Miscellaneous. (a) Remedies. The Company and the Guarantors acknowledge and agree that any failure by the Company or the Guarantors to comply with their obligations under Section 1 and 2 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company's and the Guarantors' obligations under Sections 1 and 2 hereof. The Company and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor the Guarantors will on or after the date of this Agreement enter into any agreement with respect to the Company's securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any agreement in effect on the date hereof. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of 13

the Securities affected by such amendment, modification, supplement, waiver or consents. Without the consent of the Holder of each Security, however, no modification may change the provisions relating to the payment of Additional Interest. Subject to the foregoing sentence, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Securities whose Securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Securities may be given by Holders of at least a majority in aggregate principal amount of the Securities being sold pursuant to such Registration Statement. (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery: (1) if to a Holder of the Securities, at the most current address given by such Holder to the Company. (2) if to the Initial Purchasers: c/o Deutsche Bank Securities Inc. 60 Wall Street New York, NY 10005 Fax No.: (212) 797-4877 Attention: Debt Capital Markets Syndicate with a copy to: Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022 Fax No.: (646) 848-8830 Attention: Robert Evans III (3) if to the Company or the Guarantors: Affinion Group, Inc. 6 High Ridge Park Stamford, CT 06905 Fax No.: (203) 956-1206 Attention: General Counsel with a copy to (which shall not constitute notice): Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, NY 10036 Fax No.: (212) 872-1002 Attention: Rosa A. Testani All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery. 14

(e) Third Party Beneficiaries. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. (f) Successors and Assigns. This Agreement shall be binding upon the Company and the Guarantors and their successors and assigns. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (j) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. [Signature Page follows] 15

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers, the Company and the Guarantors in accordance with its terms. Very truly yours, COMPANY: AFFINION GROUP, INC., By: /s/ Nathaniel J. Lipman Name: Title: GUARANTORS: AFFINION BENEFITS GROUP, LLC AFFINION DATA SERVICES, INC. AFFINION GROUP, LLC AFFINION LOYALTY ACQUISITION, LLC AFFINION LOYALTY GROUP, INC. AFFINION PUBLISHING, LLC CARDWELL AGENCY, INC. CCAA, CORPORATION CONNEXIONS LOYALTY TRAVEL SOLUTIONS LLC GLOBAL PRIVACY SOLUTIONS, LLC INTERNATIONAL TRAVEL FULFILLMENT LLC LONG TERM PREFERRED CARE, INC. LOYALTY TRAVEL AGENCY LLC TRAVELERS ADVANTAGE SERVICES, INC. TRILEGIANT AUTO SERVICES, INC. TRILEGIANT CORPORATION TRILEGIANT INSURANCE SERVICES, INC. TRILEGIANT RETAIL SERVICES, INC. WATCHGUARD REGISTRATION SERVICES, INC. /s/ Nathaniel J. Lipman By: Name: Title: CUC ASIA HOLDINGS, by its partners: Trilegiant Corporation /s/ Nathaniel J. Lipman By: Name: Title: Nathaniel J. Lipman Chief Executive Officer

Nathaniel J. Lipman Chief Executive Officer

Nathaniel J. Lipman Chief Executive Officer Registration Rights Agreement Signature Page

By:

Trilegiant Retail Services, Inc. /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer 17 Registration Rights Agreement Signature Page

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written. Acting on behalf of themselves and as the Representatives of the several Initial Purchasers. DEUTSCHE BANK SECURITIES INC. /s/ Edwin E. Roland By: Name: Title: /s/ John McDermott By: Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED /s/ John McCusker By: Name: Title:

Edwin Roland Managing Director John McDermott Director John McCusker Managing Director Registration Rights Agreement Signature Page

ANNEX A Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

ANNEX B Each broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution."

ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until [], 20 , all dealers 1 effecting transactions in the Exchange Securities may be required to deliver a prospectus. The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a brokerdealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
1

In addition, the legend required by Item 502(b) of Regulation S-K will appear on the inside front cover page of the Exchange Offer prospectus below the Table of Contents.

ANNEX D CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: Address: If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

Exhibit 10.4 EXECUTION COPY $250,000,000 INCREMENTAL TERM LOAN FACILITY

SECOND INCREMENTAL ASSUMPTION AGREEMENT Dated as of February 11, 2011 among AFFINION GROUP HOLDINGS, INC. AFFINION GROUP, INC. and CERTAIN SUBSIDIARIES OF AFFINION GROUP, INC. as Loan Parties and BANK OF AMERICA, N.A. as Administrative Agent and Collateral Agent

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and DEUTSCHE BANK SECURITIES INC. as Joint Lead Arrangers and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED DEUTSCHE BANK SECURITIES INC., CREDIT SUISSE SECURITIES (USA) LLC, CITIGROUP GLOBAL MARKETS INC., GOLDMAN SACHS LENDING PARTNERS LLC, J.P. MORGAN SECURITIES LLC, UBS SECURITIES LLC and MORGAN JOSEPH TRIARTISAN FINANCE LLC as Joint Book Runners
nd

AFFINION 2 Incremental Assumption Agt

SECOND INCREMENTAL ASSUMPTION AGREEMENT THIS SECOND INCREMENTAL ASSUMPTION AGREEMENT (this "Agreement"), dated as of February 11, 2011, is made by and among AFFINION GROUP, INC., a Delaware corporation (the "Borrower"), AFFINION GROUP HOLDINGS, INC., a Delaware corporation ("Holdings"), each of the undersigned banks and other financial institutions party hereto as lenders (in such capacity, the "Incremental Term Lenders"), each subsidiary of the Borrower listed on the signature pages hereto (together with Holdings and the Borrower, the "Loan Parties"), BANK OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative Agent") for the Lenders under, and as defined in, the Credit Agreement (as defined below), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and DEUTSCHE BANK SECURITIES INC., as joint lead arrangers (in such capacity, the "Lead Arrangers"), and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, DEUTSCHE BANK SECURITIES INC., CREDIT SUISSE SECURITIES (USA) LLC, CITIGROUP GLOBAL MARKETS INC., GOLDMAN, SACHS LENDING PARTNERS LLC, J.P. MORGAN SECURITIES LLC, UBS SECURITIES LLC and MORGAN JOSEPH TRIARTISAN FINANCE LLC, as joint bookrunners (in such capacity, the "Bookrunners"). PRELIMINARY STATEMENTS: (1) The Borrower, Holdings, the Administrative Agent, the other agents party thereto, and the lenders from time to time party thereto are parties to an Amended and Restated Credit Agreement, dated as of April 9, 2010 (as supplemented by that certain Incremental Assumption Agreement, dated as of December 13, 2010, and as otherwise amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms not otherwise defined in this Agreement have the same meanings as specified in the Credit Agreement; (2) The Company has requested that the Incremental Term Lenders collectively provide Incremental Term Loan Commitments hereunder, and make Incremental Term Loans pursuant thereto, in an aggregate amount equal to $250,000,000 (the "Aggregate Incremental Term Loan Commitment") on the Effective Date (as defined below), and each Incremental Term Lender is prepared to make a portion of such Aggregate Incremental Term Loan Commitment, and to provide a portion of the Incremental Term Loans pursuant thereto, in the respective amounts set forth on Schedule 1 hereto, in each case subject to the other terms and conditions set forth herein; and (3) The Loan Parties, the Incremental Term Lenders and the Administrative Agent are entering into this Agreement in order to evidence such Incremental Term Loan Commitments and Incremental Term Loans, which are to be made in the form of additional Tranche B Term Loan Commitments and additional Tranche B Term Loans, in accordance with Section 2.20 of the Credit Agreement. SECTION 1. Incremental Term Loans. Pursuant to Section 2.20 of the Credit Agreement, and subject to the satisfaction of the conditions set forth in Section 3 hereof, on and as of the Effective Date: AFFINION 2 Incremental Assumption Agt
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(a) Each Incremental Term Lender that is also already a Tranche B Lender under the Credit Agreement (an "Increasing Term Loan Lender") hereby agrees that upon, and subject to, the occurrence of the Effective Date, such Incremental Term Lender's Tranche B Term Loan Commitment shall be increased, as contemplated by Section 2.20 of the Credit Agreement, by the amount set forth opposite such Incremental Term Lender's name under the heading "Incremental Term Loan Commitment" on Schedule 1 to this Agreement. From and after the Effective Date, each reference in the Credit Agreement to any Increasing Term Loan Lender's Tranche B Term Loan Commitment shall mean its Tranche B Term Loan Commitment, as increased pursuant to this Agreement, and as set forth opposite its name on Schedule 1 to this Agreement under the heading "Total Tranche B Term Loan Commitment" on Schedule 1 to this Agreement. (b) Each Incremental Term Lender that is not, prior to the effectiveness of this Agreement, a Tranche B Lender under the Credit Agreement (each, an "Additional Term Loan Lender"), hereby agrees that upon, and subject to, the occurrence of the Effective Date, such Incremental Term Lender shall be deemed to be, and shall become, a "Tranche B Lender" and a "Lender" for all purposes of, and subject to all the obligations of a "Tranche B Lender" and a "Lender" under, the Credit Agreement and the other Loan Documents, and shall have a Tranche B Term Loan Commitment that is equal to the amount set forth opposite such Incremental Term Lender's name under the heading "Incremental Term Loan Commitment" on Schedule 1 to this Agreement. Each Loan Party and the Administrative Agent hereby agree that from and after the Effective Date, each Additional Term Loan Lender shall be deemed to be, and shall become, a "Tranche B Lender" and a "Lender" for all purposes of, and with all the rights and remedies of a "Tranche B Lender" and a "Lender" under, the Credit Agreement and the other Loan Documents. From and after the Effective Date, each reference in the Credit Agreement to any Additional Term Loan Lender's Tranche B Term Loan Commitment shall mean its Tranche B Term Loan Commitment as acquired pursuant to this Agreement, and as set forth opposite its name on Schedule 1 to this Agreement under the heading "Total Tranche B Term Loan Commitment" on Schedule 1 to this Agreement. (c) Each Additional Term Loan Lender and each Increasing Term Loan Lender hereby agrees to make Incremental Term Loans to the Borrower on the Effective Date in a principal amount not to exceed its respective Tranche B Term Loan Commitment (as determined giving effect to this Agreement). SECTION 2. Amendments to the Credit Agreement. Pursuant to Section 2.20 of the Credit Agreement, and subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, effective on and as of the Effective Date, the Credit Agreement is hereby amended as follows: (a) the aggregate amount of the Tranche B Term Loan Commitments shall be increased by $250,000,000; 3 AFFINION 2 Incremental Assumption Agt
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(b) the Tranche B Term Loan Commitments of each Incremental Term Lender (as a Tranche B Lender under the Credit Agreement) shall be equal to the respective amount set forth opposite such Incremental Term Lender's name under the heading "Total Tranche B Term Loan Commitment" on Schedule 1 to this Agreement; (c) the term "Joint Lead Arrangers", as defined in the recitals to the Credit Agreement, shall be amended by adding "DBS" to the list of Joint Lead Arrangers set forth therein; and (d) the term "Bookrunners", as defined in the recitals to the Credit Agreement, shall be amended by adding "Citigroup Global Markets Inc.", "Goldman Sachs Lending Partners LLC" and "Morgan Joseph TriArtisan Finance LLC" to the list of Bookrunners set forth therein. SECTION 3. Conditions to Effectiveness on Effective Date. This Agreement, and the obligations of the Incremental Term Lenders to make their respective Incremental Term Loan Commitments, and to fund their respective Incremental Term Loans, as specified in Section 1 hereof, shall become effective on and as of the Business Day occurring on or before February 18, 2011 on which the following conditions shall have been satisfied (the "Effective Date"): (a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party, or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement. (b) The Administrative Agent shall have received a Borrowing Request, completed and delivered in accordance with the terms of Section 2.03 of the Credit Agreement. (c) The Administrative Agent shall have received, on behalf of itself, the Issuing Banks and the Lenders, a favorable written opinion of Akin Gump Strauss Hauer and Feld, LLP, special counsel for Holdings, the Borrower and the other Loan Parties, (A) dated the Effective Date, (B) addressed to the Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders, and (C) in form and substance reasonably satisfactory to the Administrative Agent, and covering such matters as the Administrative Agent shall reasonably request relating to, as applicable, this Agreement and the other documents delivered in connection herewith on behalf of the Loan Parties, and each of Holdings, the Borrower and the other Loan Parties hereby instructs its counsel to deliver such opinions. (d) All legal matters incident to this Agreement, the extensions of credit hereunder and the other documents delivered in connection herewith or therewith shall be reasonably satisfactory to the Administrative Agent and to each Incremental Term Lender on the Effective Date. 4 AFFINION 2 Incremental Assumption Agt
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(e) The Administrative Agent shall have received each of the items referred to below: (i) a copy of the Borrower's certificate of incorporation, including all amendments thereto, certified as of a recent date by the Secretary of State of the jurisdiction of its incorporation, and accompanied by a certificate as to the good standing of the Borrower as of a recent date from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of the Borrower, dated the Effective Date and certifying: (A) that attached thereto is a true and complete copy of the by-laws of the Borrower, as in effect on the Effective Date and at all times since the date of the adoption of the resolutions of the Board of Directors of the Borrower described in clause (B) below; (B) that attached thereto is a true and complete copy of (1) the duly adopted resolutions of the Board of Directors of the Borrower, delegating to the "Pricing Committee" (a sub-formation of the Board of Directors) the power and authority to authorize the Borrower's entry into, and borrowings and other performance under, an incremental term credit facility of the same nature and scope as the transactions set forth herein, and (2) the duly adopted resolutions of the Pricing Committee, specifically authorizing the execution, delivery and performance of this Agreement and any other documents delivered in connection herewith on behalf of the Borrower, and the extensions of credit under the Credit Agreement, as amended hereby, and that neither the resolutions of the Board of Directors nor the resolutions of the Pricing Committee referred to above have been modified, rescinded or amended, and that both are in full force and effect on the Effective Date; (C) that the certificate of incorporation and the by-laws of the Borrower have not been amended since the date of the last amendment thereto disclosed pursuant to clause (i) above; (D) as to the incumbency and specimen signature of each officer or other duly authorized person executing this Agreement or any other document delivered in connection herewith on behalf of the Borrower; and (E) as to the absence of any pending proceeding for the dissolution or liquidation of the Borrower or any other Loan Party or, to the knowledge of such person, threatening the existence of the Borrower or any other Loan Party; (iii) a certification of another officer or other duly authorized person as 5 AFFINION 2 Incremental Assumption Agt
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to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to Section 3(e)(ii) hereof; (iv) a certificate of a Responsible Officer of the Borrower as to the satisfaction of the conditions set forth in Sections 2.20(a), 2.20(c)(iii), 2.20(c)(v), 4.01(b) and 4.01(c) of the Credit Agreement; provided, that such certificate shall include reasonably detailed calculations demonstrating the Loan Parties' compliance with, and satisfaction of, the conditions set forth in Sections 2.20(c)(iii) and 2.20(c)(v) of the Credit Agreement; (v) a copy of the written notice from the Borrower requesting the Incremental Term Loan Commitments constituting the Aggregate Incremental Term Loan Commitment, executed and delivered by the Borrower pursuant to Section 2.20(a) of the Credit Agreement; (vi) a solvency certificate executed by the Chief Financial Officer of the Borrower in substantially the form of the solvency certificate previously delivered by the Borrower on the Restatement Effective Date; and (vii) such other documents as the Administrative Agent may reasonably request in connection with the Aggregate Incremental Term Loan Commitment (including, without limitation, tax identification numbers and addresses). (f) The Administrative Agent and the Incremental Term Lenders shall have received: (i) a non-refundable up-front fee paid to each Incremental Term Lender for its own account, in an amount equal to 0.25% of such Incremental Term Lender's Incremental Term Loan Commitment hereunder, pursuant to Section 1 hereof; and (ii) all other fees due and payable thereto on or prior to the Effective Date and, to the extent invoiced, all other amounts due and payable pursuant to the Loan Documents on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of Shearman & Sterling LLP) required to be reimbursed or paid by the Loan Parties hereunder or under any Loan Document. (g) The conditions set forth in (i) Sections 4.01(b) and 4.01(c) of the Credit Agreement shall be satisfied as of the Effective Date as though the Effective Date is the date of a Credit Event; and (ii) Sections 2.20(a), 2.20(c)(iii) and 2.20(c)(v) of the Credit Agreement shall be satisfied as of the Effective Date. SECTION 4. Reference to and Effect on the Credit Agreement; Confirmation of Guarantors. 6 AFFINION 2 Incremental Assumption Agt
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(a) On and after the effectiveness of this Agreement, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by, and after giving effect to, this Agreement. (b) Each Loan Document, after giving effect to this Agreement, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed, except that, on and after the effectiveness of this Agreement, each reference in each of the Loan Documents (including the Guarantee and Collateral Agreement and the other Security Documents) to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by, and after giving effect to, this Agreement. Without limiting the generality of the foregoing, the Security Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, as amended by, and after giving effect to, this Agreement, in each case subject to the terms thereof. (c) Each Loan Party hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party, (ii) ratifies and reaffirms each grant of a lien on, or security interest in, its property made pursuant to the Loan Documents (including, without limitation, the grant of security made by such Loan Party pursuant to the Collateral Agreement) and confirms that such liens and security interests continue to secure the Obligations under the Loan Documents, including, without limitation, all Obligations resulting from or incurred pursuant to the Aggregate Incremental Term Loan Commitment, in each case subject to the terms thereof and (iii) in the case of each Guarantor, ratifies and reaffirms its guaranty of the Obligations pursuant to Article II of the Guarantee and Collateral Agreement. (d) The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents, or constitute a waiver of any provision of any of the Loan Documents. SECTION 5. Initial Syndication of Incremental Term Loans. The Borrower, pursuant to its consent right with respect the assignment of Loans under Section 9.04(b) of the Credit Agreement, hereby consents to the assignment of any or all of the Incremental Term Loans made pursuant hereto in connection with the initial syndication of such Incremental Term Loans (a) by any Incremental Term Lender to any Bookrunner or to the lending affiliate of any bookrunner, (b) by any Incremental Term Lender to any of the persons listed on the list of prospective lenders delivered to the Borrower by the Administrative Agent or its counsel on February 10, 2011, or to the affiliates of and/or funds managed or controlled by, such persons (collectively, the "Prospective Lenders"), and/or (c) by any Bookrunner or its lending affiliate to any Prospective Lender. SECTION 6. Costs, Expenses. The Borrower agrees to pay on demand all reasonable out of pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Agreement and the other instruments and documents 7 AFFINION 2 Incremental Assumption Agt
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to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent) in accordance with the terms of Section 9.05 of the Credit Agreement. SECTION 7. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier (or other electronic transmission) shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8. SECTION 9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 8 AFFINION 2 Incremental Assumption Agt
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IN WITNESS WHEREOF, the parties hereto have caused this Incremental Assumption Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. AFFINION GROUP, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer AFFINION GROUP HOLDINGS, INC. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Executive Vice President and Chief Financial Officer [SIGNATURE PAGE] AFFINION 2 Incremental Assumption Agt
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AFFINION BENEFITS GROUP, LLC AFFINION DATA SERVICES, INC. AFFINION GROUP, LLC AFFINION LOYALTY GROUP, INC. AFFINION PUBLISHING, LLC CCAA CORPORATION CARDWELL AGENCY INC. GLOBAL PRIVACY SOLUTIONS, LLC LIFT MEDIA, LLC LONG TERM PREFERRED CARE, INC. TRAVELER'S ADVANTAGE SERVICES, INC. TRILEGIANT AUTO SERVICES, INC. TRILEGIANT CORPORATION TRILEGIANT INSURANCE SERVICES, INC. TRILEGIANT RETAIL SERVICES, INC. WATCHGUARD REGISTRATION SERVICES, INC. WEBLOYALTY HOLDINGS, INC. WEBLOYALTY.COM, INC. By: /s/ Nathaniel J. Lipman Name: Title:

Nathaniel J. Lipman Chief Executive Officer

CUC ASIA HOLDINGS By: Comp-U-Card Services LLC, its General Partner By: Affinion Membership Services Holdings Subsidiary LLC, its General Partner By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer [SIGNATURE PAGE] AFFINION 2 Incremental Assumption Agt
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BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent By: /s/ John McCusker Name: Title: [SIGNATURE PAGE]

John McCusker Managing Director AFFINION 2 Incremental Assumption Agt

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BANK OF AMERICA, N.A., as Incremental Term Lender By: /s/ John McCusker Name: Title: [SIGNATURE PAGE]

John McCusker Managing Director AFFINION 2 Incremental Assumption Agt

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Schedule 1 Incremental Term Loan Commitments and Incremental Term Lenders

Incremental Term Loan Commitment Commitment Percentage Total Tranche B Term Loan Commitment

Incremental Term Lender

Bank of America, N.A. Total SCHEDULE 1

$250,000,000.00 $250,000,000.00

100.0% 100%
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$250,000,000.00 N/A AFFINION 2 Incremental Assumption Agt

Exhibit 10.22 AMENDMENT TO EMPLOYMENT AGREEMENT THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") by and among AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the "Company"), AFFINION GROUP, INC., a Delaware corporation and wholly-owned subsidiary of the Company ("Affinion"), and ROBERT ROONEY ("Executive") (collectively, the "Parties") is made as of January 13, 2010. Capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Agreement (as such term is defined below). WHEREAS, the Parties are currently party to that certain Employment Agreement, made as of November 9, 2007 (the "Agreement"), pursuant to which Executive serves as an Executive Vice President and the Chief Operating Officer of the Company; WHEREAS, on January 13, 2010 (the "Upshaw Appointment Date"), Steve Upshaw was appointed President of Affinion to succeed Nathaniel Lipman; WHEREAS, in connection with the appointment of Mr. Upshaw as the President of Affinion and certain organizational changes relating thereto, Executive began reporting directly to Mr. Upshaw effective as of the Upshaw Appointment Date, and not to the Chief Executive Officer of the Company, as provided in the Agreement (the "Reporting Change"); and WHEREAS, the Parties desires to amend Executive's employment agreement with the Companies to extend the time period for Executive to terminate his employment agreement as the result of the Reporting Change from sixty (60) days to eighteen (18) months following such event. NOW, THEREFORE, in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows: 1. Section 3(d) of the Agreement shall be amended by adding the following language at the end of such section: "Notwithstanding the foregoing, the Parties acknowledge and agree that Executive shall have eighteen (18) months (rather than sixty (60) days) following the date on which Executive begins reporting to Steve Upshaw in his capacity as President of Affinion (the "Reporting Change") to provide written notice to the Companies that Executive is terminating his employment for Good Reason under this Section 3(d) as the result of the Reporting Change." 2. All other provisions of the Agreement shall remain unchanged and in full force and effect.

3. This Amendment will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Delaware to be applied. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Amendment, even if under such jurisdiction's choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. 4. This Amendment may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. [SIGNATURE PAGE FOLLOWS] 2

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

AFFINION GROUP HOLDINGS, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer AFFINION GROUP, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer ROBERT ROONEY Signature: /s/ Robert Rooney 3

Exhibit 10.24 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT by and among AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the "Company"), AFFINION GROUP, INC., a Delaware corporation and wholly-owned subsidiary of the Company ("Affinion"), and STEVEN UPSHAW ("Executive") (collectively the "Parties") is made as of January 15, 2010 (the "Effective Date"). WHEREAS, on August 17, 2004, Executive entered into an employment agreement (as amended, the "Prior Employment Agreement") with Trilegiant Corporation, which is an indirect, wholly-owned subsidiary of Affinion; WHEREAS, the Parties desire to continue Executive's employment pursuant to the terms, provisions and conditions set forth in this employment agreement (the "Agreement"), which shall supersede the Prior Agreement effective as of the Effective Date; and WHEREAS, Executive desires to accept his employment on the terms hereinafter set forth in this Agreement. NOW, THEREFORE, in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows: Sectio 1. Employment Period. n Subject to earlier termination in accordance with Section 3 of this Agreement, Executive shall be employed by the Company and Affinion (collectively, the "Companies") for a period commencing on the Effective Date and ending on January 15, 2013 (the "Employment Period"); provided, however, that the Employment Period shall automatically be renewed for successive one (1) year periods thereafter unless either the Company or Executive gives at least ninety (90) days' written notice of its intention not to renew the Employment Period. Upon Executive's termination of employment with the Company for any reason, Executive shall immediately resign all positions with the Companies or any of their respective subsidiaries or affiliates, including any position as a member of any of the Companies' Board of Directors. Sectio 2. Terms of Employment. n (a) Position. During the Employment Period, Executive shall serve as President of Affinion and Chief Executive Officer of Affinion International Limited and will perform such duties and exercise such supervision with regard to the business of the Companies as are associated with such positions, including such duties as may be prescribed from time to time by the Chief Executive Officer of the Company. Executive shall report directly to the Chief Executive Officer of the Company. If reasonably requested by the Company's Board of Directors (the "Board"), Executive hereby agrees to serve (without additional compensation) as an officer and director of any member of the "Affinion Group" (as defined in Section 5(a) below). 1

(b) Duties. During the Employment Period, Executive shall have such responsibilities, duties, and authority that are customary for his position, subject at all times to the control of the Board, and shall perform such services as customarily are provided by an executive of a corporation with his position and such other services consistent with his position, as shall be assigned to him from time to time by the Board. Executive agrees to devote all of his business time to the business and affairs of the Companies and to use Executive's commercially reasonable efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive's responsibilities hereunder. (c) Compensation. (i) Base Salary. During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to Three Hundred and Twenty-Five Thousand Dollars ($325,000), less all applicable withholdings, which shall be paid in accordance with the customary payroll practices of the Company (as in effect from time to time, the "Annual Base Salary"). The Annual Base Salary shall be subject to annual review and increases, and the Annual Base Salary shall not be reduced without Executive's consent, unless the reduction is related to a broader compensation reduction that is not limited to Executive and does not exceed 10% of his Annual Base Salary. (ii) Bonus. During the Employment Period, the Company shall establish a bonus plan for each fiscal year of the Company (each, the "Plan") pursuant to which Executive will be eligible to receive an annual bonus (the "Bonus"). The Compensation Committee of the Board will administer the Plan and at such time as the Company becomes subject to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), establish in advance performance objectives for each year in accordance with Section 162(m) of the Code. In the event that the Company achieves the target established in the Plan based on actual performance, Executive shall be eligible to receive a Bonus in an amount equal to 100% of Executive's Annual Base Salary ("Target Bonus"). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company's achievement of the specified performance objectives and if Executive is employed on the last day of the applicable fiscal year. The Bonus shall become payable in the following fiscal year on or before March 15 provided that the Compensation Committee certifies that the Company has achieved the applicable performance objectives and determines the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable fiscal year. (iii) Benefits. During the Employment Period, Executive shall be eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided by the Companies to the extent applicable generally to other senior executives of the Companies (except 2

severance plans, policies, practices, or programs) subject to the eligibility criteria set forth therein, as such may be amended or terminated from time to time. (iv) Expenses. During the term of Executive's employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder provided that Executive provides all necessary documentation in accordance with the Companies' policies. Sectio 3. Termination of Employment. n (a) Death or Disability. Executive's employment shall terminate automatically upon Executive's death. If Executive becomes subject to a "Disability" (as defined below) during the Employment Period, the Company may give Executive written notice in accordance with Sections 3(h) and 10(g) of its intention to terminate Executive's employment. For purposes of this Agreement, "Disability" means (i) Executive's inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Companies. (b) Cause. Executive's employment may be terminated at any time by the Company for "Cause" (as defined below). For purposes of this Agreement, "Cause" shall mean Executive's (i) conviction of a felony or a crime of moral turpitude; (ii) conduct that constitutes fraud or embezzlement; (iii) willful misconduct or willful gross neglect; (iv) continued willful failure to substantially perform his duties as Executive Vice President and President of Affinion or Chief Executive Officer of AIL; or (v) a material breach by Executive of this Agreement; provided that in the event of a termination pursuant to clause (iv) or (v), to the extent such failure to perform duties or material breach is subject to cure, the Company shall have notified Executive in writing describing such failure to perform duties or material breach and Executive shall have failed to cure such failure to perform or breach within 30 days after his receipt of such written notice. (c) Termination Without Cause. The Company may terminate Executive's employment hereunder without Cause at any time. (d) Good Reason. Executive's employment may be terminated at any time by Executive for Good Reason upon 60 days' prior written notice following the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, "Good Reason" means voluntary resignation after any of the following actions taken by the Companies without Executive's consent: (i) any material failure of the Companies to fulfill their obligations under this 3

Agreement, (ii) a material and adverse change to, or a material reduction of, Executive's duties and responsibilities to the Companies, (iii) a reduction in Executive's Annual Base Salary or Target Bonus (excluding any diminution related to a broader compensation reduction that is not limited to Executive specifically and that is not more than 10% in the aggregate or any diminution to which Executive consented) or (iv) the relocation of Executive's primary office to a location more than 35 miles from the prior location; provided that any such event shall not constitute Good Reason unless and until Executive shall have provided the Companies with notice thereof no later than 60 days following the occurrence of such event and the Companies shall have failed to remedy such event within 30 days of receipt of such notice. (e) Voluntary Termination. Executive's employment may be terminated at any time by Executive without Good Reason upon 90 days' prior written notice. (f) Termination as a Result of Non-Renewal of the Employment Period by the Company. The expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on account of the Company giving notice to Executive of its desire not to extend the Employment Period in accordance with Section 1, shall be treated for purposes of this Agreement as a termination without Cause pursuant to Section 4(a). (g) Notice of Termination. Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(g). For purposes of this Agreement, a "Notice of Termination" means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated and (iii) if the "Date of Termination" (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive's or the Company's rights hereunder. (h) Date of Termination. "Date of Termination" means (i) if Executive's employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such Date of Termination is in accordance with Section 3(d) or Section 3(e)) or any later date specified therein pursuant to Section 3(g), as the case may be, (ii) if Executive's employment is terminated by reason of death, the date of death, and (iii) the expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on 4

account of the Company giving notice to Executive of its desire not to extend the Employment Period in accordance with Section 3(f). Sectio 4. Obligations of the Company upon Termination. n (a) With Good Reason; Without Cause. If during the Employment Period, the Company shall terminate Executive's employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following payments and/or benefits: (i) The Company shall pay to Executive as soon as reasonably practicable but no later than the 15 day of the third month following the end of the calendar year that contains the Date of Termination in a lump sum to the extent not previously paid, (A) the Annual Base Salary through the Date of Termination, and (B) the Bonus earned for any fiscal year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such fiscal year ("Accrued Obligations"); and (ii) After the Date of Termination, the Company will pay Executive, in six quarterly installments commencing as of the Date of Termination, an amount equal to 100% of the sum of (A) Executive's Annual Base Salary and (B) Executive's Target Bonus, such installment to be paid ratably on the last day of the quarter (the "Severance Payments"). (b) Death or Disability. If Executive's employment shall be terminated by reason of the Executive's death or Disability, then the Company will provide Executive with the following severance payments and/or benefits: the Company shall pay Executive or his legal representatives (i) the Accrued Obligations; (ii) a lump sum equal to 100% of Executive's Annual Base Salary; and (iii) the continuation of death or Disability benefits thereafter in accordance with the terms of such plans of the Companies then in effect. Thereafter, the Companies shall have no further obligation to Executive or his legal representatives. (c) Cause; Other than for Good Reason. If Executive's employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Companies shall have no further obligations to Executive other than for payment of the Accrued Obligations and any indemnification rights he may have pursuant to Section 9. (d) Separation Agreement and General Release. The Company's obligations to make payments under Sections 4(a) and 4(b) are conditioned on Executive's or his legal representative's executing a separation agreement and general release of claims against the Companies and their respective affiliates (and their respective officers and directors) in a form substantially similar to that attached hereto as Exhibit A, subject to changes as may be warranted to be made to such release to preserve the intent thereof for changes in applicable laws; provided, that, 5
th

if Executive should fail to execute (or revokes) such release within 60 days following the Date of Termination, the Company shall not have any obligation to provide the payments contemplated under this Section 4. (e) Notwithstanding the foregoing, if all or any portion of the payments and/or benefits due under Section 4(a) or Section 4(b) are determined to be "nonqualified deferred compensation" subject to Section 409A of the Code, and the Company determines that Executive is a "specified employee" as defined in Section 409A(a)(2)(B)(i) of the Code and the final regulations promulgated thereunder (the "Treasury Regulations") and other guidance issued thereunder, then such payments and/or benefits (or portion thereof) shall commence no earlier than the first day of the seventh month following Executive's termination of employment (with the first such payment being a lump sum equal to the aggregate payments and/or benefits Executive would have received during such sixmonth period if no such payment delay had been imposed). For purposes of this Section 4(e), "termination of employment" shall mean Executive's "separation from service", as defined in Section 1.409A-1(h) of the Treasury Regulations, including the default presumptions thereunder. Sectio 5. Restrictive Covenants. n (a) Non-Solicitation. During the Employment Period and ending on the third anniversary of the Executive's termination of employment with the Company for any reason, Executive shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Companies and their respective affiliates (collectively, the "Affinion Group") to leave the employ of the Affinion Group, or in any way interfere with the relationship between the Affinion Group, on the one hand, and any employee thereof, on the other hand, (ii) hire any person who was an employee of the Affinion Group or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Affinion Group to cease doing business with the Affinion Group, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Affinion Group, on the other hand. (b) Non-Competition. Executive acknowledges that, in the course of his employment with the Affinion Group, Executive has become familiar, or will become familiar, with the Affinion Group's "Confidential Information" and that such Executive's services have been and will be of special, unique and extraordinary value to the Affinion Group. Therefore, Executive agrees that, during the Employment Period and ending on the second anniversary of Executive's termination of employment with the Company for any reason (the "Non-Compete Period"), Executive shall not, directly or indirectly, engage in any business that markets, provides, administers or makes available affinity-based membership programs, affinity-based insurance programs, benefit packages as an enhancement to financial institutions or other customer accounts or loyalty-based programs (whether as of the date hereof or during the Non-Compete Period), anywhere in the world in which the Affinion Group is doing business. For purposes of this Section 5(b), the 6

phrase "directly or indirectly, engage in" shall include any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, licensor of technology or otherwise; provided, however, that nothing in this Section 5(b) shall prohibit Executive from being a passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. (c) Non-Disclosure; Non-Use of Confidential Information. Executive shall not disclose or use at any time, either during his employment with the Companies or at any time thereafter, any Confidential Information of which Executive is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by Executive's performance in good faith of duties assigned to Executive by the Company. Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft. Executive shall deliver to the Company at the termination of his employment with the Company, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Confidential Information or the "Work Product" (as defined in Section 5(e)(ii)) of the business of the Affinion Group that Executive may then possess or have under his control. (d) Proprietary Rights. Executive recognizes that the Affinion Group possesses a proprietary interest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of Executive, except as otherwise agreed between the Affinion Group and Executive in writing. Executive expressly agrees that any Work Product made or developed by Executive or his agents during the course of Executive's employment, including any Work Product which is based on or arises out of Work Product, shall be the property of and inure to the exclusive benefit of the Affinion Group. Executive further agrees that all Work Product developed by Executive (whether or not able to be protected by copyright, patent or trademark) during the course of his employment with the Companies, or involving the use of the time, materials or other resources of the Affinion Group, shall be promptly disclosed to the Affinion Group and shall become the exclusive property of the Affinion Group, and Executive shall execute and deliver any and all documents necessary or appropriate to implement the foregoing. (e) Certain Definitions. (i) As used herein, the term "Confidential Information" means information that is not generally known to the public (but for purposes of clarity, Confidential Information shall never exclude any such information that becomes known to the public because of Executive's unauthorized disclosure) and that is 7

used, developed or obtained by the Affinion Group in connection with its business, including, but not limited to, information, observations and data obtained by Executive while employed by the Affinion Group concerning (A) the business or affairs of the Affinion Group, (B) products or services, (C) fees, costs and pricing structures, (D) designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operating systems, applications and program listings, (H) flow charts, manuals and documentation, (I) databases, (J) accounting and business methods, (K) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (L) customers and clients and customer or client lists, (M) other copyrightable works, (N) all production methods, processes, technology and trade secrets, and (O) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public (except as a result of Executive's unauthorized disclosure) prior to the date Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. (ii) As used herein, the term "Work Product" means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) that relates to the Affinion Group's actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Companies together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. Sectio 6. Non-Disparagement. n During the period commencing on the Effective Date and continuing until the third anniversary of the Executive's termination of employment for any reason, neither Executive nor his agents, on the one hand, nor the Companies formally, or their respective senior executives or board of directors, on the other hand, shall directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or his agents, any of the Companies' officers, directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or by private statements to any of the Companies' officers, directors or employees; provided, that in the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. 8

Sectio 7. Severance Payments. n In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Affinion Group, if Executive violates Section 5 or Section 6 hereof, any Severance Payments then or thereafter due from the Company to Executive shall be terminated immediately and the Company's obligation to pay and Executive's right to receive such Severance Payments shall terminate and be of no further force or effect. Sectio 8. Executive's Representations, Warranties and Covenants. n (a) Executive hereby represents and warrants to the Companies that: (i) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive; (ii) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; (iii) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other person; (iv) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; (v) Executive understands that the Companies will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and (vi) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date. (b) The Companies hereby represent and warrant to Executive that: (i) the Companies have all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Companies; (ii) the execution, delivery and performance of this Agreement by the Companies does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or 9

instrument to which the Companies are a party or any judgment, order or decree to which the Companies are subject; (iii) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of the Companies, enforceable in accordance with its terms; and (iv) the Companies understand that Executive will rely upon the accuracy and truth of the representations and warranties of the Companies set forth herein and the Companies consent to such reliance. Sectio 9. Indemnification. n The Company shall secure directors' and officers' liability insurance for the benefit of Executive on terms at least equal to those applicable to the other directors and officers of the Company (which insurance, for Executive, shall provide for advancement of defense costs) and shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware. Sectio 10. General Provisions. n (a) Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. (b) Entire Agreement and Effectiveness. Effective as of the Effective Date, this Agreement embodies the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way (excluding any stock options or awards granted under any equity compensation plans maintained by the Company). (c) Successors and Assigns. 10

(i) This Agreement is personal to Executive and without the prior written consent of the Companies shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives. (ii) This Agreement shall inure to the benefit of and be binding upon the Companies and their respective successors and assigns. The Companies will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Companies to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Companies would be required to perform it if no such succession had taken place. As used in this Agreement, "Companies" shall mean the Companies as hereinbefore defined and any successor to their business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise. (d) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. (e) Enforcement. (i) Arbitration. Except for disputes arising under Sections 5 and 6 of this Agreement (including, without limitation, any claim for injunctive relief), any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the Parties are unable to resolve by mutual agreement, shall be settled by submission by either Executive or the Companies of the controversy, claim or dispute to binding arbitration in New York (unless the Parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the Parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all Parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator's fees and costs; provided, however, that the arbitrator shall have 11

the discretion to award the prevailing party reimbursement of its or his reasonable attorney's fees and costs. (ii) Remedies. All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. (iii) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. (f) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Companies and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof. (g) Notices. Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service. If to the Companies, to: Affinion Group Holdings, Inc. 100 Connecticut Avenue Norwalk, CT 06850 Facsimile: (203) 956-1206 Attention: General Counsel with a copy (which shall not constitute notice) to: Akin Gump Strauss Hauer & Feld LLP 590 Madison Avenue New York, NY 10022 Facsimile: (212) 872-1002 Attention: Adam Weinstein, Esq. If to Executive, to: 12

Executive's home address most recently on file with the Company. (h) Withholdings Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. (i) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements contained herein shall survive the consummation of the transactions contemplated hereby indefinitely. (j) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a "Section" in this Agreement are to a section of the Agreement unless otherwise noted. (k) Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any party. (l) Code Section 409A. If any payments of compensation or benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant with Section 409A of the Code; otherwise, such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company and reasonably acceptable to Executive, that does not cause such an accelerated or additional tax. (m) Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. [SIGNATURE PAGE FOLLOWS] 13

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above. AFFINION GROUP HOLDINGS, INC. By: /s/ Nathaniel J. Lipman Name: Title: AFFINION GROUP, INC. By: /s/ Nathaniel J. Lipman Name: Title: STEVEN UPSHAW Signature: /s/ Steven Upshaw 14

Nathaniel J. Lipman Chief Executive Officer

Nathaniel J. Lipman Chief Executive Officer

EXHIBIT A GENERAL RELEASE 1. Termination of Employment. Steven Upshaw ("Executive") acknowledges that his last day of employment with Affinion Group Holdings, Inc. (together with Affinion Group, Inc., the "Company") is (the "Termination Date"). 2. Full Release. For the consideration set forth in the Employment Agreement, by and between the Company and Executive, dated as of January , 2010 (the "Employment Agreement") and for other fair and valuable consideration therefor, Executive, for himself, his heirs, executors, administrators, successors and assigns (hereinafter collectively referred to as the "Releasors"), hereby fully releases and discharges the Company, its parents, subsidiaries, affiliates, insurers, successors, and assigns, and their respective officers, directors, officers, employees, and agents (all such persons, firms, corporations and entities being deemed beneficiaries hereof and are referred to herein as the "Company Entities") from any and all actions, causes of action, claims, obligations, costs, losses, liabilities, damages and demands of whatsoever character, whether or not known, suspected or claimed, which the Releasors have, from the beginning of time through the date of this General Release, against the Company Entities arising out of or in any way related to Executive's employment or termination of his employment; provided, however, that this shall not be a release with respect to any amounts and benefits owed to Executive pursuant to the Employment Agreement upon termination of employment, employee benefit plans of the Company, or Executive's right to indemnification and directors and officers insurance as provided in Section 9 of the Employment Agreement. 3. Waiver of Rights Under Other Statutes. Executive understands that this General Release waives all claims and rights Executive may have under certain federal, state and local statutory and regulatory laws, as each may be amended from time to time, including but not limited to, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection Act) ("ADEA"), Title VII of the Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act; the Worker Adjustment and Retraining Notification Act; the Connecticut Fair Employment Practices Act; and all other statutes, regulations, common law, and other laws in any and all jurisdictions (including, but not limited to, Connecticut) that in any way relate to Executive's employment or the termination of his employment. 4. Informed and Voluntary Signature. No promise or inducement has been made other than those set forth in this General Release. This General Release is executed by Executive without reliance on any representation by Company or any of its agents. Executive states that that he is fully competent to manage his business affairs and understands that he may be waiving legal rights by signing this General Release. Executive hereby acknowledges that he has carefully read this General Release and has had the opportunity to thoroughly discuss the terms of this General Release with legal counsel of his choosing. Executive hereby acknowledges that he fully understands the terms of this General Release and its final and binding effect and that he affixes his signature hereto voluntarily and of his own free will. 15

5. Waiver of Rights Under the Age Discrimination Act. Executive understands that this General Release, and the release contained herein, waives all of his claims and rights under the ADEA. The waiver of Executive's rights under the ADEA does not extend to claims or rights that might arise after the date this General Release is executed. The monies to be paid to Executive are in addition to any sums to which Executive would be entitled without signing this General Release. For a period of seven (7) days following execution of this General Release, Executive may revoke the terms of this General Release by a written document received by the General Counsel of the Company no later than 11:59 p.m. of the seventh day following Executive's execution of this General Release. This General Release will not be effective until said revocation period has expired. Executive acknowledges that he has been given up to 1 [21/45] days to decide whether to sign this General Release. Executive has been advised to consult with an attorney prior to executing this General Release and has been given a full and fair opportunity to do so. 6. Miscellaneous. (a) This General Release shall be governed in all respects by the laws of the State of Connecticut without regard to the principles of conflict of law. (b) In the event that any one or more of the provisions of this General Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this General Release is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. (c) This General Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (d) The paragraph headings used in this General Release are included solely for convenience and shall not affect or be used in connection with the interpretation of this General Release. (e) This General Release and the Employment Agreement represent the entire agreement between the parties with respect to the subject matter hereto and may not be amended except in a writing signed by the Company and Executive. If any dispute should arise under this General Release, it shall be settled in accordance with the terms of the Employment Agreement. (f) This General Release shall be binding on the executors, heirs, administrators, successors and assigns of Executive and the successors and assigns of Company and shall inure to the benefit of the respective executors, heirs, administrators, successors and assigns of the Company Entities and the Releasors.
1

Insert 45 days in the event of a layoff of two or more employees. 16

IN WITNESS WHEREOF, the Parties hereto have executed this General Release on this AFFINION GROUP HOLDINGS, INC. By: Name: Title: AFFINION GROUP, INC. By: Name: Title: STEVEN UPSHAW Signature: 17

day of

Exhibit 10.27 EXECUTION VERSION EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT by and among AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the "Company"), AFFINION GROUP, INC., a Delaware corporation and wholly-owned subsidiary of the Company ("Affinion") and RICHARD FERNANDES ("Executive") (collectively the "Parties") is made as of January 14, 2011. WHEREAS, the Parties desire to employ Executive pursuant to the terms, provisions and conditions set forth in this employment agreement (the "Agreement"), and effective upon the Closing Date, as defined in the Agreement and Plan of Merger, dated January 14, 2011 (the "Merger Agreement") by and between Affinion Group Holdings, Inc., Affinion Group, Inc., Webloyalty Holdings, Inc. and certain other parties (the transactions contemplated thereby the "Transaction"); WHEREAS, Executive desires to accept his employment on the terms hereinafter set forth in this Agreement. NOW THEREFORE, in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows: Section 1. Employment Period. (a) As of, and contingent upon, the Closing Date (as defined in the Merger Agreement) of the Transaction (the "Effective Date"), the Companies shall employ Executive, and Executive shall accept such employment and perform services for the Companies, upon the terms and conditions set forth in this Agreement. Notwithstanding anything herein to the contrary, if the Merger Agreement is terminated, then this Agreement shall be void ab initio. (b) Subject to earlier termination in accordance with Section 3 of this Agreement, Executive shall be employed by the Company and Affinion (collectively, the "Companies") for a period commencing on the Effective Date and ending on December 31, 2012 (the "Employment Period"); provided, however, that the Employment Period shall automatically be renewed for successive one (1) year periods thereafter unless either the Company or Executive gives at least ninety (90) days' written notice of its intention not to renew the Employment Period. Upon Executive's termination of employment with the Company for any reason, Executive shall immediately resign all positions with the Companies or any of their respective subsidiaries or affiliates, including any position as a member of the Company's Board of Directors (the "Board") and as a member of the Board of Directors of Affinion (the "Affinion Board"). Section 2. Terms of Employment. (a) Position. During the term of Executive's employment, Executive shall serve as President of the Company and Affinion and as Chief Executive Officer of Affinion International Limited. In addition, as of the Effective Date, Executive is a member of the Board of Directors and the Affinion Board. During the Employment Period, the Company will nominate Executive 1

for election by stockholders as a member of the Board and will use commercially reasonable efforts to cause the Executive to be so elected. In performing his duties hereunder, Executive shall report directly to the Board. If reasonably requested by the Board, Executive hereby agrees to serve (without additional compensation) as an officer and director of any member of the "Affinion Group" (as defined in Section 5(a) below). (b) Duties. During the Employment Period, Executive shall be primarily responsible for the Company's management and affairs as directed by the Board, and have such other, responsibilities, duties and authority that are customary for his position, subject at all times to the control of the Board, and shall perform such services as customarily are provided by an executive of a corporation with his position and such other services consistent with his position, as shall be assigned to him from time to time by the Board. Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive's commercially reasonable efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive's responsibilities hereunder. (c) Compensation. (i) Base Salary. During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to $425,000.00, less all applicable withholdings, which shall be paid in accordance with the customary payroll practices of the Company (as in effect from time to time, the "Annual Base Salary"). The Annual Base Salary shall be subject to annual review and increases, and the Annual Base Salary shall not be reduced without Executive's consent, unless the reduction is one time only, is related to a broader compensation reduction that is not limited to Executive, is no greater (in percentage terms) than that of any other executive officer of the Company and does not exceed 10% of his Annual Base Salary. (ii) Bonuses. During the Employment Period, the Company shall establish a bonus plan for each fiscal year of the Company (each, the "Plan") pursuant to which Executive will be eligible to receive an annual bonus (the "Bonus"). The Compensation Committee of the Board will administer the Plan and at such time as the Company becomes subject to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") establish in advance performance objectives for each year in accordance with Section 162(m) of the Code. In the event that the Company achieves the target established in the Plan based on actual performance, Executive shall receive a Bonus in an amount equal to 125% of Executive's Annual Base Salary ("Target Bonus"). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company's achievement of the specified performance objectives and if Executive is employed on the last day of the applicable fiscal year. The Bonus shall become payable in the following fiscal year on or before March 15 provided that the Compensation Committee certifies that the Company has achieved the applicable performance objectives and determines the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable fiscal year. 2

(iii) Benefits. During the Employment Period, Executive shall be eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided by the Companies to the extent applicable generally to other senior executives of the Companies (except severance plans, policies, practices, or programs) subject to the eligibility criteria set forth therein, as such may be amended or terminated from time to time. (iv) Expenses. During the term of Executive's employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder provided that Executive provides all necessary documentation in accordance with the Companies' policies. The Company shall also reimburse Executive for any unreimbursed fees reasonably incurred by Executive with respect to the attorney Executive has retained to advise Executive with regard to the negotiation and execution of this Agreement. Section 3. Termination of Employment. (a) Death or Disability. Executive's employment shall terminate automatically upon Executive's death. If Executive becomes subject to a "Disability" (as defined below) during the Employment Period, the Company may give Executive written notice in accordance with Sections 3(g) and 10(g) of its intention to terminate Executive's employment. For purposes of this Agreement, "Disability" means (i) Executive's inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Companies. Executive's Disability shall be determined by an independent medical doctor acceptable to both the Company and Executive. (b) Cause. Executive's employment may be terminated at any time by the Company for "Cause" (as defined below). For purposes of this Agreement, "Cause" shall mean Executive's (i) conviction of a felony or a crime of moral turpitude; (ii) conduct that constitutes fraud or embezzlement; (iii) willful misconduct or willful gross neglect; (iv) continued willful failure to substantially perform his duties as President of the Company and Affinion or as Chief Executive Officer of Affinion International Limited; or (v) a material breach by Executive of this Agreement; provided that in the event of a termination pursuant to clause (iv) or (v), to the extent such failure to perform duties or material breach is subject to cure, the Company shall have notified Executive in writing describing such failure to perform duties or material breach and Executive shall have failed to cure such failure to perform or breach within 30 days after his receipt of such written notice. (c) Termination Without Cause. The Company may terminate Executive's employment hereunder without Cause at any time. 3

(d) Good Reason. Executive's employment may be terminated at any time by Executive for Good Reason upon 30 days' prior written notice following the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, "Good Reason" means voluntary resignation after any of the following actions taken by the Companies without Executive's consent: (i) failure of the Company to use its commercially reasonable efforts to cause Executive to continue to be elected as a member of the Board; (ii) any material failure of the Companies to fulfill their obligations under this Agreement, (iii) a material and adverse change to, or a material reduction of, Executive's positions, duties and responsibilities to the Companies or the assignment to Executive of duties that are materially inconsistent with his positions, (iv) a reduction in Executive's Annual Base Salary or Target Bonus (excluding any one time diminution related to a broader compensation reduction that is not limited to Executive specifically, that is no greater (in percentage terms) than that of any other executive officer of the Company and that is not more than 10% in the aggregate or any diminution to which Executive consented) or (v) the relocation of Executive's primary office to a location more than 35 miles from the prior location; provided that any such event shall not constitute Good Reason unless and until Executive shall have provided the Companies with notice thereof no later than 90 days following the occurrence of such event and the Companies shall have failed to remedy such event within 30 days of receipt of such notice. (e) Voluntary Termination. Executive's employment may be terminated at any time by Executive without Good Reason upon 30 days' prior written notice. (f) Termination as a Result of Non-Renewal of the Employment Period by the Company. The expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on account of the Company giving notice to Executive of its desire not to extend the Employment Period in accordance with Section 1, shall be treated for purposes of this Agreement as a termination without Cause pursuant to Section 4(a). (g) Notice of Termination. Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(g). For purposes of this Agreement, a "Notice of Termination" means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated and (iii) if the "Date of Termination" (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive, or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive, or the Company hereunder or preclude Executive, or the Company from asserting such fact or circumstance in enforcing Executive's, or the Company's rights hereunder. (h) Date of Termination. "Date of Termination" means (i) if Executive's employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such Date of Termination is in accordance with Section 3(d) or Section 3(e)) or any later date specified therein pursuant to 4

Section 3(g), as the case may be, (ii) if Executive's employment is terminated by reason of death, the date of death, and (iii) the expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on account of the Company or Executive giving notice to the other of its desire not to extend the Employment Period in accordance with Section 1. Section 4. Obligations of the Company upon Termination. (a) With Good Reason; Without Cause. If during the Employment Period, the Company shall terminate Executive's employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following payments and/or benefits: (i) The Company shall pay to Executive as soon as reasonably practicable but no later than sixty (60) days following the Date of Termination in a lump sum to the extent not previously paid, (A) the Annual Base Salary through the Date of Termination, and (B) the Bonus earned for any fiscal year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such fiscal year ("Accrued Obligations"); and (ii) After the Date of Termination, the Company will pay Executive, in eight equal quarterly installments, an amount equal to two times the sum of Executive's Annual Base Salary and Target Bonus, such installments to be paid on the last day of the quarter following the quarter in which the Date of Termination occurs and on the last day of each of the next seven quarters (the "Severance Payments"). (b) Death or Disability. If Executive's employment shall be terminated by reason of the Executive's death or Disability, then the Company will provide Executive with the following severance payments and/or benefits: the Company shall pay Executive or his legal representatives within sixty (60) days after the Date of Termination (i) the Accrued Obligations; (ii) a lump sum equal to one times Executive's Annual Base Salary; and (iii) the continuation of death or Disability benefits thereafter in accordance with the terms of such plans of the Companies then in effect. Thereafter, the Companies shall have no further obligation to Executive or his legal representatives other than any indemnification rights they may have under Section 9. (c) Cause; Other than for Good Reason. If Executive's employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Companies shall have no further obligations to Executive other than for payment of the Accrued Obligations and any indemnification rights he may have pursuant to Section 9. (d) Separation Agreement and General Release. The Company's obligations to make payments under Sections 4(a) and 4(b) are conditioned on Executive's or his legal representative's executing a separation agreement and general release of claims against the Companies and their respective affiliates (and their respective officers and directors) in a form substantially similar to that attached hereto as Exhibit A, subject to changes as maybe warranted to be made to such release to preserve the intent thereof for changes in applicable laws; provided, 5

that, if Executive should fail to execute (or revokes) such release within 60 days following the Date of Termination, the Company shall not have any obligation to provide the payments contemplated under this Section 4. (e) No Mitigation or Offset. Executive shall not be obligated to seek other employment or to attempt to reduce any amount payable to Executive under this Section 4. Further, no amount of any payment hereunder shall be reduced by any compensation earned by Executive as a result of employment by a subsequent employer or otherwise. Section 5. Restrictive Covenants. (a) Non-Solicitation. (i) During the Employment Period and ending on the third anniversary of the Executive's termination of employment with the Company for any reason, Executive shall not directly or indirectly through another person or entity (A) induce or attempt to induce any employee of the Companies and their respective affiliates (collectively, the "Affinion Group") to leave the employ of the Affinion Group, or in any way interfere with the relationship between the Affinion Group, on the one hand, and any employee thereof, on the other hand, or (B) hire any person who, at any time during the preceding twelve months, was an employee of the Affinion Group. (ii) During the Employment Period and ending on the second anniversary of the Executive's termination of employment with the Company for any reason, Executive shall not directly or indirectly through another person or entity induce or attempt to induce any customer, supplier, licensee or other business relation of the Affinion Group to cease doing business with the Affinion Group, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Affinion Group, on the other hand. (iii) This Section 5(a) embodies the complete agreement and understanding among the Parties hereto with respect non-solicitation and supersedes any provision in any other agreement among the Parties in respect of non-solicitation, including, without limitation, any such provision in the Fernandes Investor Rights Agreement, dated on or about the date hereof, the Securityholder Rights Agreement by and among the Company and certain other parties listed thereon, dated on or about the date hereof, and the Stockholder Agreement among the Company and certain other parties listed thereon, dated on or about the date hereof. (b) Non-Competition. Executive acknowledges that, in the course of his employment with the Affinion Group, Executive has become familiar, or will become familiar, with the Affinion Group's "Confidential Information" and that such Executive's services have been and will be of special, unique and extraordinary value to the Affinion Group. Therefore, Executive agrees that, during the Employment Period and ending on the second anniversary of Executive's termination of employment with the Company for any reason (the "Non-Compete Period"), Executive shall not, directly or indirectly, engage in any business that markets, provides, administers or makes available affinity-based membership programs, affinity-based insurance 6

programs, benefit packages as an enhancement to financial institutions or other customer accounts or loyalty-based programs (whether as of the date hereof or during the Non-Compete Period), anywhere in the world in which the Affinion Group is doing business. For purposes of this Section 5(b), the phrase "directly or indirectly, engage in" shall include any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, licensor of technology or otherwise; provided, however, that nothing in this Section 5(b) shall prohibit Executive from being a passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. (c) Non-Disclosure; Non-Use of Confidential Information. Executive shall not disclose or use at any time, either during his employment with the Companies or at any time thereafter, any Confidential Information of which Executive is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by Executive's performance in good faith of duties assigned to Executive by the Company or as required by law or legal process. Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft. Executive shall deliver to the Company at the termination of his employment with the Company, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Confidential Information or the "Work Product" (as defined in Section 5(e)(ii)) of the business of the Affinion Group that Executive may then possess or have under his control. The Parties agree that, notwithstanding anything to the contrary in any other agreement among the Parties, Executive's disclosure or use of Confidential Information that is directly related to and required by Executive's performance in good faith of duties assigned to Executive by the Company, as expressly permitted by this clause (c), shall be deemed not to be a breach of any confidentiality provision of such other agreement, including, without limitation, the Securityholder Rights Agreement by and among the Company and certain other parties listed thereon, dated on or about the date hereof, or the Stockholder Agreement among the Company and certain other parties listed thereon, dated on or about the date hereof. (d) Proprietary Rights. Executive recognizes that the Affinion Group possesses a proprietary interest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of Executive, except as otherwise agreed between the Affinion Group and Executive in writing. Executive expressly agrees that any Work Product made or developed by Executive or his agents during the course of Executive's employment, including any Work Product which is based on or arises out of Work Product, shall be the property of and inure to the exclusive benefit of the Affinion Group. Executive further agrees that all Work Product developed by Executive (whether or not able to be protected by copyright, patent or trademark) during the course of his employment with the Companies, or involving the use of the time, materials or other resources of the Affinion Group, shall be promptly disclosed to the Affinion Group and shall become the exclusive property of the 7

Affinion Group, and Executive shall execute and deliver any and all documents necessary or appropriate to implement the foregoing. (e) Certain Definitions. (i) As used herein, the term "Confidential Information" means information that is not generally known to the public or in the public domain (but for purposes of clarity, Confidential Information shall never exclude any such information that becomes known to the public because of Executive's unauthorized disclosure) and that is used, developed or obtained by the Affinion Group in connection with its business, including, but not limited to, information, observations and data obtained by Executive while employed by the Affinion Group or any predecessors thereof concerning (A) the business or affairs of the Affinion Group (or such predecessors), (B) products or services, (C) fees, costs and pricing structures, (D) designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operating systems, applications and program listings, (H) flow charts, manuals and documentation, (I) databases, (J) accounting and business methods, (K) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (L) customers and clients and customer or client lists, (M) other copyrightable works, (N) all production methods, processes, technology and trade secrets, and (O) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public (except as a result of Executive's unauthorized disclosure) prior to the date Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. (ii) As used herein, the term "Work Product" means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) that relates to the Affinion Group's actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Companies (including those conceived, developed or made prior to the date of the Prior Employment Agreement) together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. Section 6. Non-Disparagement. During the period commencing on the Effective Date and continuing until the third anniversary of the Executive's termination of employment for any reason, neither Executive nor his agents, on the one hand, nor the Companies formally, or their respective senior executives or board of directors, on the other hand, shall directly or indirectly issue or communicate any public 8

statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or his agents, any of the Companies' officers, directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or by private statements to any of the Companies' officers, directors or employees; provided, that in the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. Section 7. Severance Payments. In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Affinion Group, if Executive violates Section 5 or Section 6 hereof in any material respect, any Severance Payments then or thereafter due from the Company to Executive shall be terminated immediately and the Company's obligation to pay and Executive's right to receive such Severance Payments shall terminate and be of no further force or effect. Section 8. Executive's Representations, Warranties and Covenants. (a) Executive hereby represents and warrants to the Companies that: (i) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive; (ii) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; (iii) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other person; (iv) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; (v) Executive understands that the Companies will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and (vi) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date. (b) The Companies hereby represent and warrant to Executive that: (i) the Companies have all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Companies; 9

(ii) the execution, delivery and performance of this Agreement by the Companies does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Companies are a party or any judgment, order or decree to which the Companies are subject; (iii) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of the Companies, enforceable in accordance with its terms; and (iv) the Companies understand that Executive will rely upon the accuracy and truth of the representations and warranties of the Companies set forth herein and the Companies consent to such reliance. Section 9. Indemnification. The Company shall secure directors' and officers' liability insurance for the benefit of Executive on terms at least equal to those applicable to the other directors and officers of the Company (which insurance, for Executive, shall provide for advancement of defense costs) and shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware. Section 10. General Provisions. (a) Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. (b) Entire Agreement and Effectiveness. Effective as of the Effective Date, this Agreement embodies the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, the employment agreement between Executive and webloyalty.com, inc., dated April 15, 2005 (as amended), the Noncompetition and Non-Solicitation Agreement between Executive and Webloyalty.com, Inc. 10

dated April 15, 2005 and any similar services or restrictive covenant agreement with webloyalty.com, inc. or its affiliates or their predecessors, but excluding the Fernandes Investor Rights Agreement, dated on or about the date hereof, the Securityholder Rights Agreement by and among the Company and certain other parties listed thereon, dated on or about the date hereof, and the Call Agreement by and among Affinion Group Holdings, Inc., the Fernandes Family Trust A Dated June 25, 1999 and certain other parties listed thereon, dated on or about the date hereof). (c) Successors and Assigns. (i) This Agreement is personal to Executive and without the prior written consent of the Companies shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives. (ii) This Agreement shall inure to the benefit of and be binding upon the Companies and their respective successors and assigns. The Companies will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Companies to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Companies would be required to perform it if no such succession had taken place and shall not assign this Agreement, other than to any such successor, without Executive's prior written consent. As used in this Agreement, "Companies" shall mean the Companies as hereinbefore defined and any successor to their business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise. (d) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. 11

(e) Enforcement. (i) Arbitration. Except for disputes arising under Sections 5 and 6 of this Agreement (including, without limitation, any claim for injunctive relief), any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the Parties are unable to resolve by mutual agreement, shall be settled by submission by either Executive or the Companies of the controversy, claim or dispute to binding arbitration in New York (unless the Parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the Parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all Parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator's fees and costs; provided, however, that the arbitrator shall have the discretion to award the prevailing party reimbursement of its or his reasonable attorney's fees and costs. (ii) Remedies. All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. (iii) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. (f) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Companies and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof. (g) Notices. Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service. 12

If to the Companies, to: Affinion Group Holdings, Inc. 100 Connecticut Avenue Norwalk, CT 06850 Facsimile: (203) 956-1206 Attention: General Counsel with a copy (which shall not constitute notice) to: Akin Gump Strauss Hauer & Feld LLP 590 Madison Avenue New York, NY 10022 Facsimile: (212) 872-1002 Attention: Adam Weinstein, Esq. If to Executive, to: Executive's home address most recently on file with the Company. (h) Withholdings Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. (i) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements contained herein shall survive the consummation of the transactions contemplated hereby indefinitely. (j) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a "Section" in this Agreement are to a section of the Agreement unless otherwise noted. (k) Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any party. (l) Code Section 409A. If and only to the extent that any payment or benefit under this Agreement, is determined to constitute "non-qualified deferred compensation" subject to Code Section 409A, then it is intended that such non-qualified deferred compensation be administered and paid in order to comply with all of the rules of Code Section 409A, and notwithstanding anything in this Agreement to the contrary: (i) if such payment or benefit is described in Section 4, such payment or benefit shall be made or provided to Executive only upon or with reference to a "separation from service" as defined for purposes of Code Section 409A under Treasury Regulation 1.409A-1(h) including the default presumptions thereunder, and (ii) if Executive is a "specified employee" (within the meaning of Code Section 409A(a)(2)(B)(i) of the Code, as reasonably determined by the Company) on the Date of Termination and, to the extent the 13

Company reasonably determines that an amount or other benefit that is payable under this Agreement on account of Executive's separation from service (other than as a result of Executive's death) fails to qualify for any of the exemptions from the definition of nonqualified deferred compensation available under Section 1.409A-1(b) of the Treasury Regulations and constitutes nonqualified deferred compensation that will subject Executive to "additional tax" under Code Section 409A(a)(1)(B) with respect to the payment of such amount or the provision of such benefit if paid or provided at the time specified in this Agreement, then the payment or provision thereof shall be postponed to the first business day after the six-month anniversary of the date of Executive's separation from service or, if earlier, the date of Executive's death (the "Delayed Payment Date"). In the event that this Section 10(1) requires a delay of any payments, such payments shall be accumulated and paid in a single lump sum on the Delayed Payment Date. If Executive is entitled to a payment within a period following an event as permitted by Section 409A of the Code, Executive will have no right to designate the taxable year of payment. If the sixty (60) day period following the Date of Termination spans two taxable years, any payments described in Section 4(a) or Section 4(b) that are required to be made during such period, shall be made in the later taxable year. (m) Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. [SIGNATURE PAGE FOLLOWS] 14

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above.

AFFINION GROUP HOLDINGS, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer AFFINION GROUP, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer RICHARD FERNANDES Signature:

/s/ Richard Fernandes

[Signature Page to Fernandes Employment Agreement]

EXHIBIT A GENERAL RELEASE 1. Termination of Employment. Richard Fernandes ("Executive") acknowledges that his last day of employment with Affinion Group Holdings, Inc. (together with Affinion Group, Inc., the "Company") is (the "Termination Date"). 2. Full Release. For the consideration set forth in the Employment Agreement, by and between the Company and Executive, dated as of January 14, 2011 (the "Employment Agreement") and for other fair and valuable consideration therefore, Executive, for himself, his heirs, executors, administrators, successors and assigns (hereinafter collectively referred to as the "Releasors"), hereby fully releases and discharges the Company, its parents, subsidiaries, affiliates, insurers, successors, and assigns, and their respective officers, directors, employees, and agents (all such persons, firms, corporations and entities being deemed beneficiaries hereof and are referred to herein as the "Company Entities") from any and all actions, causes of action, claims, obligations, costs, losses, liabilities, damages and demands of whatsoever character, whether or not known, suspected or claimed, which the Releasors have, from the beginning of time through the date of this General Release, against the Company Entities arising out of or in any way related to Executive's employment or termination of his employment; provided, however, that this shall not be a release with respect to any claims Executive may have in his capacity as a shareholder of the Company including without limitation, claims under the Stockholder Agreement, dated January 14, 2011, among the Company and the holders party thereto; the Registration Rights Agreement, dated January 14, 2011, among the Company and the holders party thereto; the Warrant, dated January 14, 2011; and the Company's Charter and the By-Laws, or with respect to any amounts and benefits owed to Executive pursuant to the Employment Agreement upon termination of employment, employee benefit plans of the Company, or Executive's right to indemnification and directors and officers insurance as provided in Section 9 of the Employment Agreement. 3. Waiver of Rights Under Other Statutes. Executive understands that this General Release waives all claims and rights Executive may have under certain federal, state and local statutory and regulatory laws, as each may be amended from time to time, including but not limited to, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection Act) ("ADEA"), Title VII of the Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act; the Worker Adjustment and Retraining Notification Act; the Connecticut Fair Employment Practices Act; and all other statutes, regulations, common law, and other laws in any and all jurisdictions (including, but not limited to, Connecticut) that in any way relate to Executive's employment or the termination of his employment. 4. Informed and Voluntary Signature. No promise or inducement has been made other than those set forth in this General Release. This General Release is executed by Executive without reliance on any representation by Company or any of its agents. Executive states that that he is fully competent to manage his business affairs and understands that he may be waiving legal rights by signing this General Release. Executive hereby acknowledges that he has -1-

carefully read this General Release and has had the opportunity to thoroughly discuss the terms of this General Release with legal counsel of his choosing. Executive hereby acknowledges that he fully understands the terms of this General Release and its final and binding effect and that he affixes his signature hereto voluntarily and of his own free will. 5. Waiver of Rights Under the Age Discrimination Act. Executive understands that this General Release, and the release contained herein, waives all of his claims and rights under the ADEA. The waiver of Executive's rights under the ADEA does not extend to claims or rights that might arise after the date this General Release is executed. The monies to be paid to Executive are in addition to any sums to which Executive would be entitled without signing this General Release. For a period of seven (7) days following execution of this General Release, Executive may revoke the terms of this General Release by a written document received by the General Counsel of the Company no later than 11:59 p.m. of the seventh day following Executive's execution of this General Release. This General Release will not be effective until said revocation period has expired. Executive acknowledges that he has been given up to 1 [21/45] days to decide whether to sign this General Release. Executive has been advised to consult with an attorney prior to executing this General Release and has been given a full and fair opportunity to do so. 6. Miscellaneous. (a) This General Release shall be governed in all respects by the laws of the State of Connecticut without regard to the principles of conflict of law. (b) In the event that any one or more of the provisions of this General Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this General Release is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. (c) This General Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (d) The paragraph headings used in this General Release are included solely for convenience and shall not affect or be used in connection with the interpretation of this General Release. (e) This General Release and the Employment Agreement represent the entire agreement between the parties with respect to the subject matter hereto and may not be amended except in a writing signed by the Company and Executive. If any dispute should arise under this General Release, it shall be settled in accordance with the terms of the Employment Agreement.
1

Insert 45 days in the event of a layoff of two or more employees. -2-

(f) This General Release shall be binding on the executors, heirs, administrators, successors and assigns of Executive and the successors and assigns of Company and shall inure to the benefit of the respective executors, heirs, administrators, successors and assigns of the Company Entities and the Releasors. -3-

IN WITNESS WHEREOF, the Parties hereto have executed this General Release on this AFFINION GROUP HOLDINGS, INC. By: Name: Title: AFFINION GROUP, INC. By: Name: Title: RICHARD FERNANDES Signature:

day of

-4-

Exhibit 10.31 EXECUTION COPY THIS EMPLOYMENT AGREEMENT by and among AFFINION GROUP HOLDINGS, INC., a Delaware corporation (the "Company"), AFFINION GROUP, INC., a Delaware corporation and wholly-owned subsidiary of the Company ("Affinion"), and LLOYD WIRSHBA ("Executive") (collectively, the "Parties") is made as of December 1, 2010 (the "Effective Date"). WHEREAS, the Company and Affinion (collectively, the "Companies") desire to employ Executive pursuant to the terms, provisions and conditions set forth in this employment agreement (the "Agreement"); and WHEREAS, Executive desires to accept his employment on the terms hereinafter set forth in this Agreement. NOW THEREFORE, in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows: Section 1. Employment Period. Subject to earlier termination in accordance with Section 3 of this Agreement, Executive shall be employed by the Companies for a period commencing on the Effective Date and ending on December 1, 2013 (the "Employment Period"); provided, however, that the Employment Period shall automatically be renewed for successive one (1) year periods thereafter unless either the Company or Executive gives at least ninety (90) days' written notice of its intention not to renew the Employment Period. Upon Executive's termination of employment with the Company for any reason, Executive shall immediately resign all positions with the Companies or any of their respective subsidiaries or affiliates, including any position as a member of any of the Companies' Board of Directors (collectively, the "Board"). Section 2. Terms of Employment. (a) Position. During the Employment Period, Executive shall serve as President and Chief Executive Officer of Affinion's North American businesses and will perform such duties and exercise such supervision with regard to the business of the Company as are associated with such position, and perform such other duties as may be prescribed from time to time by the Chief Executive Officer of the Company. Executive shall report directly to the Chief Executive Officer of the Company. If reasonably requested by the Board, Executive hereby agrees to serve (without additional compensation) as an officer and director of any member of the "Affinion Group" (as defined in Section 5(a) below). (b) Duties. During the Employment Period, Executive shall have such responsibilities, duties, and authority that are customary for his position, subject at all times to the control of the Board, and shall perform such services as customarily are provided by an executive of a corporation with his position and such other services 1

consistent with his position, as shall be assigned to him from time to time by the Board. Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive's commercially reasonable efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive's responsibilities hereunder. (c) Compensation. (i) Base Salary. During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to Four Hundred Twenty- Five Thousand Dollars ($425,000), less all applicable withholdings, which shall be paid in accordance with the customary payroll practices of the Company (as in effect from time to time, the "Annual Base Salary"). The Annual Base Salary shall be subject to annual review and increases, and the Annual Base Salary shall not be reduced without Executive's consent, unless the reduction is related to a broader compensation reduction that is not limited to Executive and does not exceed ten percent (10%) of Executive's Annual Base Salary. (ii) Bonuses. During the Employment Period, the Company shall establish a bonus plan for each fiscal year of the Company (each, the "Plan") pursuant to which Executive will be eligible to receive an annual bonus (the "Bonus"). The Compensation Committee of the Board will administer the Plan and at such time as the Company becomes subject to Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), establish in advance performance objectives for each year in accordance with Section 162(m) of the Code. In the event that the Company achieves the target established in the Plan based on actual performance, Executive shall be eligible to receive a Bonus in an amount equal to one hundred twenty-five percent (125%) of Executive's Annual Base Salary ("Target Bonus"). Such Bonus shall be guaranteed for fiscal year 2011 following which, subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company's achievement of the specified performance objectives and if Executive is employed on the last day of the applicable fiscal year. The Bonus shall become payable in the following fiscal year on or before March 30 of such year provided that the Compensation Committee certifies that the Company has achieved the applicable performance objectives and determines the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable fiscal year. In addition, the Company shall pay to Executive a one-time signing bonus of Six Hundred Fifty Thousand Dollars ($650,000), less all applicable withholdings (the "Signing Bonus"). The Signing Bonus shall be paid by the Company to Executive within thirty (30) days following the Effective Date. In the event Executive terminates his employment without Good Reason or the Company terminates Executive's employment for Cause prior to the second 2

anniversary of the Effective Date, the Executive shall be required to repay the Signing Bonus in full to the Company within thirty (30) calendar days of such termination. (iii) Options. The Company shall grant Executive options to purchase 400,000 shares of common stock of the Company at an exercise price per share equal to the then fair market value per share of the Company's common stock, subject to the terms of the applicable award agreement and the Company's 2007 Stock Award Plan. Such options shall vest ratably on each of the first four (4) anniversaries of the grant date, provided, that Executive is employed by the Companies on each applicable vesting date. The Company will use commercially reasonable efforts to grant such options to Executive no later than thirty (30) days following the Effective Date. Upon a Change in Control (as defined in the Company's 2007 Stock Award Plan), all of Executive's unvested options shall be treated in the same manner as the unvested options held by other senior executives (i.e. executive vice president and above) at the Company. (iv) RSUs. The Company shall grant Executive 75,000 restricted stock units ("RSUs"), subject to the terms of the applicable award agreement and the Company's 2007 Stock Award Plan. The Company will use commercially reasonable efforts to grant such RSUs to Executive no later than thirty (30) days following the Effective Date. Such RSUs shall vest ratably on each of the first three (3) anniversaries of the Effective Date, provided that Executive is employed by the Companies on each applicable vesting date. On each vesting date, the Company shall settle the portion of the award scheduled to vest on such vesting date and as a result thereof (i) issue and deliver to Executive one share of Company common stock for each RSU subject to such vested portion of the award and (ii) enter Executive's name as a stockholder of record with respect to such shares on the books of the Company; provided, that such settlement in shares shall be conditioned on Executive's simultaneous execution of the Company's Management Investor Rights Agreement; and provided, further, that, Executive may make an election to receive cash in lieu of such shares otherwise deliverable on such vesting date in an amount equal to Two Hundred Eighty-Four One Hundred Seventy-Five Thousand Dollars ($284,175). Upon a Change in Control, all of Executive's unvested RSUs shall be treated in the same manner as the unvested RSUs held by other senior executives (i.e. executive vice president and above) at the Company. (v) Benefits. During the Employment Period, Executive shall be eligible to participate in all retirement, compensation and employee benefit plans, practices, policies and programs provided by the Companies to the extent applicable generally to other senior executives of the Companies (except severance plans, policies, practices, or programs) subject to the eligibility criteria set forth therein, as such may be amended or terminated from time to time. (vi) Relocation. The Company will pay the cost of temporary housing, including any taxes relating to such payments, for the Executive through 3

December 31, 2012 subject to Executive's continued employment with the Company through such date. Following such date, all such temporary housing payments by the Company shall cease, and if Executive remains employed by the Company, Executive will agree to have a residence in the NY/CT/NJ tri-state area. The Company will assist Executive in connection with such relocation in accordance with then-current Company practice. (vii) Expenses. During the Employment Period, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of Executive's duties hereunder provided that Executive provides all necessary documentation in accordance with the Companies' policies. During the Employment Period, the Company shall reimburse Executive for the costs of maintaining a vehicle, including the costs of lease, insurance, registration, gas and other expenses associated with such vehicle, in an amount not to exceed $1,445 per month, less all applicable withholdings. Section 3. Termination of Employment. (a) Death or Disability. Executive's employment shall terminate automatically upon Executive's death. If Executive becomes subject to a "Disability" (as defined below) during the Employment Period, the Company may give Executive written notice in accordance with Sections 3(g) and 10(g) of its intention to terminate Executive's employment. For purposes of this Agreement, "Disability" means (i) Executive's inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident or health plan covering employees of the Companies. (b) Cause. Executive's employment may be terminated at any time by the Company for "Cause" (as defined below). For purposes of this Agreement, "Cause" shall mean Executive's (i) conviction of a felony or a crime of moral turpitude; (ii) conduct that constitutes fraud or embezzlement; (iii) willful misconduct or willful gross neglect; (iv) continued willful failure to substantially perform Executive's duties as President and Chief Executive Officer of Affinion's North American businesses or (v) a material breach by Executive of this Agreement; provided that in the event of a termination pursuant to clause (iv) or (v), to the extent such failure to perform duties or material breach is subject to cure, the Company shall have notified Executive in writing describing such failure to perform duties or material breach and Executive shall have failed to cure such failure to perform or breach within thirty (30) days after Executive's receipt of such written notice. (c) Termination Without Cause. The Company may terminate Executive's employment hereunder without Cause at any time. 4

(d) Good Reason. Executive's employment may be terminated at any time by Executive for Good Reason upon sixty (60) days' prior written notice following the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, "Good Reason" means voluntary resignation after any of the following actions taken by the Companies without Executive's consent: (i) any material failure of the Companies to fulfill their obligations under this Agreement, (ii) a material and adverse change to, or a material reduction of, Executive's duties and responsibilities to the Companies, (iii) a reduction in Executive's Annual Base Salary or Target Bonus (excluding any diminution related to a broader compensation reduction that is not limited to Executive specifically and that is not more than ten percent (10%) in the aggregate or any diminution to which Executive consented) or (iv) the relocation of Executive's primary office to a location more than thirty-five (35) miles from the prior location; provided, that any such event shall not constitute Good Reason unless and until Executive shall have provided the Companies with notice thereof no later than sixty (60) days following the occurrence of such event and the Companies shall have failed to remedy such event within thirty (30) days of receipt of such notice. (e) Voluntary Termination. Executive's employment may be terminated at any time by Executive without Good Reason upon ninety (90) days' prior written notice. (f) Termination as a Result of Non-Renewal of the Employment Period by the Company. The expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on account of the Company giving notice to Executive of its desire not to extend the Employment Period in accordance with Section 1, shall be treated for purposes of this Agreement as a termination without Cause pursuant to Section 4(a). (g) Notice of Termination. Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(g). For purposes of this Agreement, a "Notice of Termination" means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated and (iii) if the "Date of Termination" (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive's or the Company's rights hereunder. (h) Date of Termination. "Date of Termination" means (i) if Executive's employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such Date of Termination is in accordance with Section 3(d) or Section 3(e)) or 5

any later date specified therein pursuant to Section 3(g), as the case may be, (ii) if Executive's employment is terminated by reason of death, the date of death, and (iii) the expiration of the Employment Period, and the termination of Executive's employment upon the date of such expiration, on account of the Company giving notice to Executive of its desire not to extend the Employment Period in accordance with Section 3(f). Section 4. Obligations of the Company upon Termination: (a) With Good Reason; Without Cause. If during the Employment Period, the Company shall terminate Executive's employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following payments and/or benefits: (i) The Company shall pay to Executive as soon as reasonably practicable but no later than the fifteenth (15 ) day of the third (3 ) month following the end of the calendar year that contains the Date of Termination in a lump sum, to the extent not previously paid, (A) the Annual Base Salary through the Date of Termination, (B) the amount of any unpaid expense reimbursements to which Executive may be entitled pursuant to Section 2(c)(vii) hereof, and (C) any other vested payments or benefits to which Executive or Executive's estate may be entitled to receive under any of the Company's benefit plans or applicable law, in accordance with the terms of such plans or law (clauses (A)-(C), the "Accrued Obligations"); and (ii) After the Date of Termination, the Company will pay Executive, in eight (8) quarterly installments commencing as of the Date of Termination, an amount equal to one hundred percent (100%) of the sum of (A) Executive's Annual Base Salary and (B) Executive's Target Bonus, such installments to be paid ratably on the last day of the quarter. For purposes of this Section 4(a)(ii), Executive shall receive a minimum Target Bonus of at least one hundred percent (100%) of Executive's Annual Base Salary. (b) Death or Disability. If Executive's employment shall be terminated by reason of the Executive's death or Disability, then the Company will provide Executive (or his legal representatives) with the following severance payments and/or benefits: (i) the Accrued Obligations; (ii) a lump sum equal to one hundred percent (100%) of Executive's Annual Base Salary; and (iii) the continuation of death or Disability benefits thereafter in accordance with the terms of such plans of the Companies then in effect. Thereafter, the Companies shall have no further obligation to Executive or his legal representatives. 6
th rd

(c) Cause; Other than for Good Reason. If Executive's employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Companies shall have no further obligations to Executive other than for payment of the Accrued Obligations and any indemnification rights Executive may have pursuant to Section 9. (d) Separation Agreement and General Release. The Company's obligations to make payments under Sections 4(a)(ii) and 4(b)(ii) (collectively, the "Severance Payments") are conditioned on Executive's or his legal representative's executing a separation agreement and general release of claims against the Companies and their respective affiliates (and their respective officers and directors) in a form substantially similar to that attached hereto as Exhibit A, subject to changes as may be warranted to be made to such release to preserve the intent thereof for changes in applicable laws; provided, that, if Executive should fail to execute (or revokes) such release within sixty (60) days following the Date of Termination, the Company shall not have any obligation to provide the Severance Payments. If Executive executes and does not revoke such release within such sixty (60) day period, the st Severance Payments will commence on the sixty-first (61 ) day following the Date of Termination (the "Severance Payment Date"); provided, that, it shall not be a breach of this Agreement for the Company to commence the Severance Payments (subject to Executive's execution and non-revocation of the release) during the period commencing thirty (30) days prior to the Severance Payment Date and ending sixty (60) days following such Severance Payment Date in accordance with Section 409A of the Code and the Treasury Regulations (as defined below) promulgated thereunder. (e) Notwithstanding the foregoing, if all or any portion of the Severance Payments are determined to be "nonqualified deferred compensation" subject to Section 409A of the Code, and the Company determines that Executive is a "specified employee" as defined in Section 409A(a)(2)(B)(i) of the Code and the final regulations promulgated thereunder (the "Treasury Regulations") and other guidance issued thereunder, then such payments and/ th or benefits (or portion thereof) shall commence no earlier than the first day of the seventh (7 ) month following Executive's termination of employment (with the first such payment being a lump sum equal to the aggregate payments and/or benefits Executive would have received during such six (6)month period if no such payment delay had been imposed). For purposes of this Section 4, "termination of employment" shall mean Executive's "separation from service", as defined in Section 1.409A-1(h) of the Treasury Regulations, including the default presumptions thereunder. Installment payments to be made pursuant to this Section 4 shall be treated as a right to receive a series of separate payments hereunder, within the meaning of Section 409A of the Code and the guidance thereunder. Section 5. Restrictive Covenants. (a) Non-Solicitation. During the Employment Period and ending on the third anniversary of the Executive's termination of employment with the Company for any reason, Executive shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Companies and their respective affiliates 7

(collectively, the "Affinion Group") to leave the employ of the Affinion Group, or in any way interfere with the relationship between the Affinion Group, on the one hand, and any employee thereof, on the other hand, (ii) hire any person who was an employee of the Affinion Group or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Affinion Group to cease doing business with the Affinion Group, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Affinion Group, on the other hand. (b) Non-Competition. Executive acknowledges that, in the course of his employment with the Affinion Group, Executive has become familiar, or will become familiar, with the Affinion Group's "Confidential Information" and that such Executive's services have been and will be of special, unique and extraordinary value to the Affinion Group. Therefore, Executive agrees that, during the Employment Period and ending on the second anniversary of Executive's termination of employment with the Company for any reason (the "Non-Compete Period"), Executive shall not, directly or indirectly, engage in any business that markets, provides, administers or makes available affinity-based membership programs, affinity-based insurance programs, benefit packages as an enhancement to financial institutions or other customer accounts or loyalty-based programs (whether as of the date hereof or during the Non-Compete Period), anywhere in the world in which the Affinion Group is doing business. For purposes of this Section 5(b), the phrase "directly or indirectly, engage in" shall include any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, partner, joint venturer or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, licensor of technology or otherwise; provided, however, that nothing in this Section 5(b) shall prohibit Executive from being a passive owner of not more than five percent (5%) of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. (c) Non-Disclosure; Non-Use of Confidential Information. Executive shall not disclose or use at any time, either during his employment with the Companies or at any time thereafter, any Confidential Information of which Executive is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by Executive's performance in good faith of duties assigned to Executive by the Company. Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft. Executive shall deliver to the Company at the termination of his employment with the Company, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Confidential Information or the "Work Product" (as defined in Section 5(e)(ii)) of the business of the Affinion Group that Executive may then possess or have under his control. (d) Proprietary Rights. Executive recognizes that the Affinion Group possesses a proprietary interest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of 8

Executive, except as otherwise agreed between the Affinion Group and Executive in writing. Executive expressly agrees that any Work Product made or developed by Executive or his agents during the course of Executive's employment, including any Work Product which is based on or arises out of Work Product, shall be the property of and inure to the exclusive benefit of the Affinion Group. Executive further agrees that all Work Product developed by Executive (whether or not able to be protected by copyright, patent or trademark) during the course of his employment with the Companies, or involving the use of the time, materials or other resources of the Affinion Group, shall be promptly disclosed to the Affinion Group and shall become the exclusive property of the Affinion Group, and Executive shall execute and deliver any and all documents necessary or appropriate to implement the foregoing. (e) Certain Definitions. (i) As used herein, the term "Confidential Information" means information that is not generally known to the public (but for purposes of clarity, Confidential Information shall never exclude any such information that becomes known to the public because of Executive's unauthorized disclosure) and that is used, developed or obtained by the Affinion Group in connection with its business, including, but not limited to, information, observations and data obtained by Executive while employed by the Affinion Group concerning (A) the business or affairs of the Affinion Group, (B) products or services, (C) fees, costs and pricing structures, (D) designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operating systems, applications and program listings, (H) flow charts, manuals and documentation, (I) databases, (J) accounting and business methods, (K) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (L) customers and clients and customer or client lists, (M) other copyrightable works, (N) all production methods, processes, technology and trade secrets, and (O) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public (except as a result of Executive's unauthorized disclosure) prior to the date Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. (ii) As used herein, the term "Work Product" means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) that relates to the Affinion Group's actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Companies together with all patent 9

applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. Section 6. Non-Disparagement. During the period commencing on the Effective Date and continuing until the third anniversary of Executive's termination of employment for any reason, neither Executive nor Executive's agents, on the one hand, nor the Companies formally, or their respective senior executives, or board of directors, on the other hand, shall directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or Executive's agents, any of the Companies' officers, directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or by private statements to any of the Companies' officers, directors or employees; provided, that in the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. Section 7. Severance Payments. In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Affinion Group, if Executive violates Section 5 or Section 6 hereof, any Severance Payments then or thereafter due from the Company to Executive shall be terminated immediately and the Company's obligation to pay and Executive's right to receive such Severance Payments shall terminate and be of no further force or effect. Section 8. Executive's Representations, Warranties and Covenants. (a) Executive hereby represents and warrants to the Companies that: (i) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive; (ii) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; (iii) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other person other than Executive's current employment agreement with his present employer; (iv) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; 10

(v) Executive understands that the Companies will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and (vi) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date. (b) The Companies hereby represent and warrant to Executive that: (i) the Companies have all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Companies; (ii) the execution, delivery and performance of this Agreement by the Companies does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Companies are a party or any judgment, order or decree to which the Companies are subject; (iii) upon the execution and delivery of this Agreement by the Companies and Executive, this Agreement will be a legal, valid and binding obligation of the Companies, enforceable in accordance with its terms; and (iv) the Companies understand that Executive will rely upon the accuracy and truth of the representations and warranties of the Companies set forth herein and the Companies consent to such reliance. Section 9. Indemnification. The Company shall secure directors' and officers' liability insurance for the benefit of Executive on terms at least equal to those applicable to the other directors and officers of the Company (which insurance, for Executive, shall provide for advancement of defense costs) and shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware. Section 10. General Provisions. (a) Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part 11

of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. (b) Entire Agreement and Effectiveness. Effective as of the Effective Date, this Agreement embodies the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way (excluding any stock options or awards granted under any equity compensation plans maintained by the Company). (c) Successors and Assigns. (i) This Agreement is personal to Executive and without the prior written consent of the Companies shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives. (ii) This Agreement shall inure to the benefit of and be binding upon the Companies and their respective successors and assigns. The Companies will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Companies to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Companies would be required to perform it if no such succession had taken place. As used in this Agreement, "Companies" shall mean the Companies as hereinbefore defined and any successor to their business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise. (d) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. (e) Enforcement. 12

(i) Arbitration. Except for disputes arising under Sections 5 and 6 of this Agreement (including, without limitation, any claim for injunctive relief), any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the Parties are unable to resolve by mutual agreement, shall be settled by submission by either Executive or the Companies of the controversy, claim or dispute to binding arbitration in New York (unless the Parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the Parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all Parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator's fees and costs; provided, however, that the arbitrator shall have the discretion to award the prevailing party reimbursement of its or his reasonable attorney's fees and costs. (ii) Remedies. All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. (iii) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. (f) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Companies and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof. (g) Notices. Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five (5) days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service. If to the Companies, to: 13

Affinion Group Holdings, Inc. 6 High Ridge Park Stamford, CT 06905 Facsimile: (203) 956-1206 Attention: General Counsel with a copy (which shall not constitute notice) to: Akin Gump Strauss Hauer & Feld LLP One Bryant Park New York, NY 10036 Facsimile: (212) 872-1002 Attention: Adam Weinstein, Esq. If to Executive, to: Executive's home address most recently on file with the Company. (h) Withholdings Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. (i) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements contained herein shall survive the consummation of the transactions contemplated hereby indefinitely. (j) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a "Section" in this Agreement are to a section of this Agreement unless otherwise noted. (k) Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any party. (l) Code Section 409A. If any payments of compensation or benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant with Section 409A of the Code; otherwise, such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company and reasonably acceptable to Executive, that does not cause such an accelerated or additional tax. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible 14

for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments shall be made on or before the last day of Executive's taxable year following the taxable year in which the expense was incurred. Notwithstanding the foregoing, none of the Company, its officers, directors or agents guarantees that this Agreement complies with Section 409A of the Code and none of the foregoing shall have any liability for the failure of this Agreement to comply with Section 409A of the Code. (m) Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. [SIGNATURE PAGE FOLLOWS] 15

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first written above.

AFFINION GROUP HOLDINGS, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer AFFINION GROUP, INC. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer LLOYD WIRSHBA Signature: /s/ Lloyd Wirshba 16

EXHIBIT A GENERAL RELEASE 1. Termination of Employment. Lloyd Wirshba ("Executive") acknowledges that his last day of employment with Affinion Group Holdings, Inc. (together with Affinion Group, Inc., the "Company") is (the "Termination Date"). 2. Full Release. For the consideration set forth in the Employment Agreement, by and between the Company and Executive, dated as of [ ], 2010 (the "Employment Agreement") and for other fair and valuable consideration therefor, Executive, for himself, his heirs, executors, administrators, successors and assigns (hereinafter collectively referred to as the "Releasors"), hereby fully releases and discharges the Company, its parents, subsidiaries, affiliates, insurers, successors, and assigns, and their respective officers, directors, officers, employees, and agents (all such persons, firms, corporations and entities being deemed beneficiaries hereof and are referred to herein as the "Company Entities") from any and all actions, causes of action, claims, obligations, costs, losses, liabilities, damages and demands of whatsoever character, whether or not known, suspected or claimed, which the Releasors have, from the beginning of time through the date of this General Release, against the Company Entities arising out of or in any way related to Executive's employment or termination of his employment; provided, however, that this shall not be a release with respect to any amounts and benefits owed to Executive pursuant to the Employment Agreement upon termination of employment, employee benefit plans of the Company, or Executive's right to indemnification and directors and officers insurance as provided in Section 9 of the Employment Agreement. 3. Waiver of Rights Under Other Statutes. Executive understands that this General Release waives all claims and rights Executive may have under certain federal, state and local statutory and regulatory laws, as each may be amended from time to time, including but not limited to, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection Act) ("ADEA"), Title VII of the Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act; the Worker Adjustment and Retraining Notification Act; the Connecticut Fair Employment Practices Act; and all other statutes, regulations, common law, and other laws in any and all jurisdictions (including, but not limited to, Connecticut) that in any way relate to Executive's employment or the termination of his employment. 4. Informed and Voluntary Signature. No promise or inducement has been made other than those set forth in this General Release. This General Release is executed by Executive without reliance on any representation by Company or any of its agents. Executive states that that he is fully competent to manage his business affairs and understands that he may be waiving legal rights by signing this General Release. Executive hereby acknowledges that he has carefully read this General Release and has had the opportunity to thoroughly discuss the terms of this General Release with legal counsel of his choosing. Executive hereby acknowledges that he fully understands the terms of this General Release and its final and binding effect and that he affixes his signature hereto voluntarily and of his own free will. 5. Waiver of Rights Under the Age Discrimination Act. Executive understands that this General Release, and the release contained herein, waives all of his claims and rights under the 17

ADEA. The waiver of Executive's rights under the ADEA does not extend to claims or rights that might arise after the date this General Release is executed. The monies to be paid to Executive are in addition to any sums to which Executive would be entitled without signing this General Release. For a period of seven (7) days following execution of this General Release, Executive may revoke the terms of this General Release by a written document received by the General Counsel of the Company no later than 11:59 p.m. of the seventh day following Executive's execution of this General Release. This General Release will not be effective until said revocation period has expired. Executive acknowledges that he has been given up to twenty-one (21) days to decide whether to sign this General Release. Executive has been advised to consult with an attorney prior to executing this General Release and has been given a full and fair opportunity to do so. 6. Miscellaneous. (a) This General Release shall be governed in all respects by the laws of the State of Connecticut without regard to the principles of conflict of law. (b) In the event that any one or more of the provisions of this General Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this General Release is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. (c) This General Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (d) The paragraph headings used in this General Release are included solely for convenience and shall not affect or be used in connection with the interpretation of this General Release. (e) This General Release and the Employment Agreement represent the entire agreement between the parties with respect to the subject matter hereof and may not be amended except in a writing signed by the Company and Executive. If any dispute should arise under this General Release, it shall be settled in accordance with the terms of the Employment Agreement. (f) This General Release shall be binding on the executors, heirs, administrators, successors and assigns of Executive and the successors and assigns of Company and shall inure to the benefit of the respective executors, heirs, administrators, successors and assigns of the Company Entities and the Releasors. 18

IN WITNESS WHEREOF, the Parties hereto have executed this General Release on this AFFINION GROUP HOLDINGS, INC. By: Name: Title: AFFINION GROUP, INC. By: Name: Title: LLOYD WIRSHBA Signature:

day of

19

Exhibit 12.1 STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in millions) (Unaudited)

Year Ended December 31, 2006

Year Ended December 31, 2007

Year Ended December 31, 2008

Year Ended December 31, 2009

Year Ended December 31, 2010

Earnings: Income (loss) before income taxes and non-controlling interests Fixed charges Earnings adjusted for fixed charges Fixed charges: Interest expense (note no interest capitalized) Portion of rent expense representative of interest (1) Total fixed charges Ratio of earnings to fixed charges (2) (1) (2)

$ $ $ $

(431.6) $ 153.6 (278.0) $ 148.8 $ 4.8 153.6 $

(186.1) $ 149.5 (36.6) $ 145.2 $ 4.3 149.5 $

(80.5) $ 147.3 66.8 $ 142.9 $ 4.4 147.3 $

(37.4) $ 134.2 96.8 $ 129.7 $ 4.5 134.2 $

(128.8) 163.5 34.7 158.0 5.5 163.5

One third of rent expense is deemed to be representative of interest. Our earnings were insufficient to cover fixed charges by $431.6 million, $186.1 million, $80.5 million, $37.4 million and $128.8 million for the years ended December 31, 2006, 2007, 2008, 2009 and 2010, respectively.

Exhibit 21.1 SUBSIDIARIES OF THE REGISTRANT Affinion Benefits Group, LLC (formerly Progeny Marketing Innovations Inc.) (DE) Affinion Data Services, Inc. (formerly Cendant Data Services, Inc.) (DE) Affinion Group, LLC (formerly Cendant Marketing Group, LLC) (DE) Affinion Investments, LLC (DE) Affinion Loyalty, LLC (DE) Affinion Loyalty Acquisition, LLC (DE) Affinion Loyalty Group, Inc. (formerly Trilegiant Loyalty Solutions, Inc.) (DE) Affinion Net Patents, Inc. (DE) Affinion Publishing, LLC (formerly Cendant Publishing, Inc.) (DE) Cardwell Agency, Inc. (VA) CCAA, Corporation (DE) Connexions Loyalty Travel Solutions LLC (DE) CUC Asia Holdings (DE) Global Privacy Solutions, LLC (DE) International Travel Fulfillment LLC (DE) Lift Media, LLC (DE) Long Term Preferred Care, Inc. (TN) Loyalty Travel Agency LLC (DE) Safecard Services Insurance Company (ND) Travelers Advantage Services, Inc. (DE) Trilegiant Auto Services, Inc. (WY) Trilegiant Corporation (formerly CMS Subsidiary, Inc.) (DE) Trilegiant Insurance Services, Inc. (formerly Cendant Membership Insurance Services, Inc.) (DE) Trilegiant Retail Services, Inc. (DE) Watchguard Registration Services, Inc. (IN) Webloyalty Holdings, Inc. (DE) Webloyalty.com, Inc. (DE) Entertainment Publications of Argentina, S.A. (Argentina) Affinion International Travel BVBA (Belgium) Consumer Alliance Group Inc. (NB, Canada) Affinion International ApS (formerly Cims ApS) (Denmark) Affinion International OY AB (formerly Cendant Nordic Membership Services OY AB) (Finland) Affinion International Assurances SARL (formerly Cendant Assurances SARL) (France) Affinion International Voyages SARL (formerly Cendant Voyages SARL) (France) WL France SAS (France) Affinion International GmbH (formerly Cims GmbH) (Germany) PTG Professional Travel GmbH (Germany) Affinion International Travel Limited (formerly Affinion International Limited (Ireland)) Loyaltybuild Limited (Ireland)

Affinion International Insurance Broker S.r.l. (formerly Cims Marketing Insurance Broker S.r.l.) (Italy) Affinion International Holding S.r.l. (Italy) Affinion International S.r.1. (formerly Cims S.r.l.) (Italy) Entertainment Publications de Mexico, S.A. de C.V. (Mexico) TZM Limited (formerly CED Australasia Limited) (New Zealand) Affinion International AS (formerly Cims AS) (Norway) Lapback AS (Norway) (30% owned) Affinion International Holdco (Proprietary) Limited (formerly Cims South Africa Holdco (Proprietary) Limited) (South Africa) Cims South Africa (Proprietary) Limited (formerly Multi Emergency Management (Pty) Limited) (South Africa) (50% owned) Affinion International, S.L. Sociedad Unipersonal (formerly Cims Specialists Marketing SA) (Spain) Affinion International AB (formerly Cims AB) (Sweden) Credit Card Sentinel Sweden AB (Sweden) Affinion International B.V. (formerly Cims B.V.) (The Netherlands) Bassae Holding B.V. (The Netherlands) Affinion International Holdings Limited (formerly Cendant International Holdings Limited) (UK) Affinion International Limited (formerly Cims Limited) (UK) with a French Branch Affinion International Travel Holdco Limited (UK) Affinion International Travel Limited (UK) Cims Limited (UK) Credit Card Sentinel LTD (UK) Entertainment Publications Limited (UK) Webloyalty International Limited (UK)

Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Nathaniel J. Lipman, certify that: (1) (2) (3) (4) I have reviewed this annual report on Form 10-K of Affinion Group, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(b)

(c) (d)

(5)

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) (b) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Nathaniel J. Lipman Name: Nathaniel J. Lipman Title: Chief Executive Officer

Date: March 3, 2011

Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT I, Todd H. Siegel, certify that: (1) (2) (3) (4) I have reviewed this annual report on Form 10-K of Affinion Group, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(b)

(c) (d)

(5)

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) (b) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Todd H. Siegel Name: Todd H. Siegel Title: Chief Financial Officer

Date: March 3, 2011

Exhibit 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 This certification is furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies this annual report on Form 10-K (the "Form 10-K") for the year ended December 31, 2010 of Affinion Group, Inc. (the "Issuer"). In connection with the Form 10-K, each of the undersigned, Nathaniel J. Lipman and Todd H. Siegel, certify, pursuant to 18 U.S.C. Section 1350, that to the best of their knowledge: (i) (ii) the Form 10-K fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Issuer as of the dates and for the periods indicated in the Form 10-K. /s/ Todd H. Siegel Todd H. Siegel Chief Financial Officer March 3, 2011

/s/ Nathaniel J. Lipman Nathaniel J. Lipman Chief Executive Officer March 3, 2011