REALOGY CORP (Form: 10-Q, Received: 11/09/2010 14:04:49)

Payment Date (on or about) and Payment Amounts ⁽³⁾

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25% of payment potential will be distributed

25% of payment potential will be distributed

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2010

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

For the transition period from to

Commission File No. 333-148153

REALOGY CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		20-4381990
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

One Campus Drive Parsippany, NJ		07054
(Address of principal executive offices)		(Zip Code)

(973) 407-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of 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 (§232.405 of this chapter) 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 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 ¨		Accelerated filer ¨
Non-accelerated filer x		Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of November 9, 2010 was 100.

Table of Contents


		Page
Forward-Looking Statements			1

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements		4

	Report of Independent Registered Public Accounting Firm		4

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2009		5

	Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009		6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009		7

	Notes to Condensed Consolidated Financial Statements		8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		39

Item 3.	Quantitative and Qualitative Disclosures about Market Risk s		68

Item 4T.	Controls and Procedures		68

PART II	OTHER INFORMATION		70

Item 1.	Legal Proceedings		70

Item 5.	Other Information		71

Item 6.	Exhibits		73

	Signatures		74

FORWARD-LOOKING STATEMENTS

Forward-looking statements in our public filings or other public statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other public statements. These forward-looking statements were based on various facts and were derived utilizing numerous important assumptions and other important factors, and changes in such facts, assumptions or factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements include the information concerning our future financial performance, business strategy, projected plans and objectives, as well as projections of macroeconomic trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts. You should understand that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

•

our substantial leverage as a result of our April 2007 acquisition by affiliates of Apollo Management, L.P. and the related financings (the “Transactions”). As of September 30, 2010, our total debt (excluding the securitization obligations) was $6,848 million representing a moderate increase in our total debt since the date of the Transactions. The industry and economy have experienced significant declines since the time of the Transactions that have negatively impacted our operating results. As a result, we have been, and continue to be, challenged by our heavily leveraged capital structure;

•

if we experience an event of default under our senior secured credit facility, including but not limited to a failure to maintain, or a failure to cure a default of, the applicable senior secured leverage ratio under such facility, or under our indentures or relocation securitization facilities or a failure to meet our cash interest obligations under these instruments or other lack of liquidity caused by substantial leverage and the adverse conditions in the housing market, such an event would materially and adversely affect our financial condition, results of operations and business;

•

under our senior secured credit facility, the senior secured leverage ratio limit of total senior secured net debt to trailing 12-month Adjusted EBITDA, as defined herein, was 5.0 to 1 at September 30, 2010 and the ratio limit steps down to 4.75 to 1 on March 31, 2011 and thereafter. During the first half of 2010, the housing market showed signs of stabilization; however, the second half of 2010 is expected to be weak compared to the second half of 2009 and there remains substantial uncertainty with respect to the timing and scope of a housing recovery. If a housing recovery is delayed further or is weak, we may be subject to additional pressure in maintaining compliance with our senior secured leverage ratio;

•

adverse developments or the absence of sustained improvement in general business, economic, employment and political conditions;

•

adverse developments or the absence of improvement in the residential real estate markets, either regionally or nationally, including but not limited to:

•

a lack of sustained improvement in the number of homesales, further declines in home prices and/or a deterioration in other economic factors that particularly impact the residential real estate market and the business segments in which we operate;

•

a lack of improvement in consumer confidence;

•

the impact of ongoing or future recessions, slow economic growth and high levels of unemployment in the U.S. and abroad;

•

legislative, tax or regulatory changes that would adversely impact the residential real estate market;

•

negative trends and/or a negative perception of the market trends in value for residential real estate;

•

continuing high levels of foreclosure activity including but not limited to the release of homes for sale by financial institutions and the uncertainty surrounding the appropriateness of mortgage servicers foreclosure processes;

•

excessive or insufficient home inventory levels;

•

lower homeownership rates in the U.S. due to various factors, including, but not limited to, high unemployment levels, inflation, reduced demand or more attractive rental markets due in part to uncertainty regarding future home values;

•

reduced availability of mortgage financing or financing availability on terms not sufficiently attractive to homebuyers;

•

our geographic and high-end market concentration relating in particular to our company-owned brokerage operations; and

•

local and regional conditions in the areas where our franchisees and brokerage operations are located;

•

any remaining resolutions or outcomes with respect to Cendant’s (as defined herein) contingent and corporate tax liabilities under the Separation and Distribution Agreement and the Tax Sharing Agreement, including any adverse impact on our future cash flows;

•

concerns or perceptions about the Company’s continued viability, which may impact, among other things, retention of sales associates, franchisees and corporate clients;

•

the impact an increase in interest rates would have on certain of our borrowings that have variable interest and the related increase in our debt service costs that would result therefrom;

•

limitations on flexibility in operating our business due to restrictions contained in our debt agreements;

•

our inability to sustain the improvements we have realized during the past several years in our operating efficiency through cost savings and business optimization efforts;

•

our inability to access capital and/or to securitize certain assets of our relocation business, either of which would require us to find alternative sources of liquidity, which may not be available, or if available, may not be on favorable terms;

•

competition in our existing and future lines of business, including, but not limited to, higher costs to retain or attract sales agents for residential real estate brokerages, and the financial resources of competitors;

•

our failure to comply with laws and regulations and any changes in laws and regulations;

•

adverse effects of natural disasters or environmental catastrophes;

•

our failure to enter into or renew franchise agreements, maintain franchisee satisfaction with our brands or the inability of franchisees to survive the most recent real estate downturn;

•

disputes or issues with entities that license us their tradenames for use in our business that could impede our franchising of those brands;

•

actions by our franchisees that could harm our business or reputation, non-performance of our franchisees or controversies with our franchisees;

•

the loss of any of our senior management or key managers or employees;

•

the cumulative effect of adverse litigation or arbitration awards against us and the adverse effect of new regulatory interpretations, rules and laws, including any changes that would (1) require classification of independent contractors to employee status, (2) place additional limitations or restrictions on affiliated transactions, which would have the effect of limiting or restricting collaboration among our business units, (3) interpret the Real Estate Settlement Procedures Act or RESPA in a manner that would adversely affect our operations and business arrangements, or (4) require significant changes in the manner in which we support our franchisees; and

•

new types of taxes or increases in state, local or federal taxes that could diminish profitability or liquidity.

Other factors not identified above, including those discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and the risks described under the headings “Forward-Looking Statements” and “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”), may also cause actual results to differ materially from those projected by our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with considering any forward-looking statements that may be made by us and our businesses generally.

Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law. For any forward-looking statements contained in our public filings or other public statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Realogy Corporation:

We have reviewed the accompanying condensed consolidated balance sheet of Realogy Corporation and its subsidiaries as of September 30, 2010, and the related condensed consolidated statement of operations for the three-month and nine-month periods ended September 30, 2010 and September 30, 2009 and the condensed consolidated statement of cash flows for the nine-month periods ended September 30, 2010 and September 30, 2009. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2009, and the related consolidated statements of operations, equity and cash flows for the year then ended (not presented herein), and in our report dated February 16, 2010, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of September 30, 2010, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

Florham Park, New Jersey

November 9, 2010

REALOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Revenues
Gross commission income	$	751		$	878		$	2,280		$	2,096
Service revenue		197			174			518			469
Franchise fees		67			79			203			201
Other		37			38			123			118

Net revenues		1,052			1,169			3,124			2,884

Expenses
Commission and other agent-related costs		490			567			1,479			1,336
Operating		315			309			925			950
Marketing		42			38			138			124
General and administrative		45			63			180			179
Former parent legacy costs (benefit), net		(6	)		5			(315	)		(37	)
Restructuring costs		2			15			12			59
Depreciation and amortization		49			48			148			147
Interest expense/(income), net		151			139			458			430
Gain on extinguishment of debt		—			(75	)		—			(75	)
Other (income)/expense, net		—			(1	)		(6	)		(11	)

Total expenses		1,088			1,108			3,019			3,102

Income (loss) before income taxes, equity in earnings and noncontrolling interests		(36	)		61			105			(218	)
Income tax expense		10			8			134			15
Equity in earnings of unconsolidated entities		(13	)		(6	)		(22	)		(18	)

Net income (loss)		(33	)		59			(7	)		(215	)
Less: Net income attributable to noncontrolling interests		—			(1	)		(1	)		(1	)

Net income (loss) attributable to Realogy	$	(33	)	$	58		$	(8	)	$	(216	)

See Notes to Condensed Consolidated Financial Statements.

REALOGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	September 30, 2010			December 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	235		$	255
Trade receivables (net of allowance for doubtful accounts of $66 and $66)		140			102
Relocation receivables		437			334
Relocation properties held for sale		28			—
Deferred income taxes		71			85
Other current assets		102			98

Total current assets		1,013			874
Property and equipment, net		185			211
Goodwill		2,591			2,577
Trademarks		732			732
Franchise agreements, net		2,925			2,976
Other intangibles, net		488			453
Other non-current assets		228			218

Total assets	$	8,162		$	8,041

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	168		$	96
Securitization obligations		338			305
Due to former parent		117			505
Revolving credit facilities and current portion of long-term debt		170			32
Accrued expenses and other current liabilities		631			502

Total current liabilities		1,424			1,440
Long-term debt		6,678			6,674
Deferred income taxes		875			760
Other non-current liabilities		166			148

Total liabilities		9,143			9,022

Commitments and contingencies (Notes 9 and 10)
Equity (deficit):
Common stock		—			—
Additional paid-in capital		2,024			2,020
Accumulated deficit		(2,979	)		(2,971	)
Accumulated other comprehensive loss		(28	)		(32	)

Total Realogy stockholder’s deficit		(983	)		(983	)

Noncontrolling interests		2			2

Total equity (deficit)		(981	)		(981	)

Total liabilities and equity (deficit)	$	8,162		$	8,041

See Notes to Condensed Consolidated Financial Statements.

REALOGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2010			2009
Operating Activities
Net loss	$	(7	)	$	(215	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		148			147
Deferred income taxes		127			8
Amortization of deferred financing costs and discount on unsecured notes		23			22
Gain on extinguishment of debt		—			(75	)
Equity in (earnings) losses of unconsolidated entities		(22	)		(18	)
Other adjustments to net income (loss)		16			21
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables		(35	)		6
Relocation receivables and advances		(77	)		375
Relocation properties held for sale		35			21
Other assets		1			15
Accounts payable, accrued expenses and other liabilities		96			50
Due (to) from former parent		(392	)		(50	)
Other, net		(15	)		(3	)

Net cash (used in) provided by operating activities		(102	)		304

Investing Activities
Property and equipment additions		(33	)		(23	)
Net assets acquired (net of cash acquired) and acquisition-related payments		(2	)		(5	)
Net proceeds from sale of assets		5			—
Purchases of certificates of deposit		(10	)		—
Change in restricted cash		4			4

Net cash used in investing activities		(36	)		(24	)

Financing Activities
Net change in revolving credit facilities		117			(515	)
Proceeds from issuance of Second Lien Loans		—			365
Repayments made for term loan credit facility		(24	)		(24	)
Net change in securitization obligations		34			(336	)
Debt issuance costs		—			(8	)
Other, net		(9	)		(10	)

Net cash provided by (used in) financing activities		118			(528	)

Effect of changes in exchange rates on cash and cash equivalents		—			3

Net decrease in cash and cash equivalents		(20	)		(245	)
Cash and cash equivalents, beginning of period		255			437

Cash and cash equivalents, end of period	$	235		$	192

Supplemental Disclosure of Cash Flow Information
Interest payments (including securitization interest expense)	$	334		$	318
Income tax payments (refunds), net	$	7		$	6

See Notes to Condensed Consolidated Financial Statements.

REALOGY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are in millions)

(Unaudited)

1.	BASIS OF PRESENTATION

Realogy Corporation (“Realogy” or the “Company”), a Delaware corporation, was incorporated on January 27, 2006 to facilitate a plan by Cendant Corporation (“Cendant”) to separate Cendant into four independent companies—one for each of Cendant’s business segments—real estate services (Realogy), travel distribution services (“Travelport”), hospitality services (including timeshare resorts) (“Wyndham Worldwide”) and vehicle rental businesses (“Avis Budget Group”). On July 31, 2006, the separation (“Separation”) from Cendant became effective.

The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and with Article 10 of Regulation S-X. In management’s opinion, the accompanying Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of September 30, 2010 and the results of operations and cash flows for the three and nine months ended September 30, 2010 and 2009. Interim results may not be indicative of full year performance because of seasonal and short-term variations. The Company has eliminated all intercompany transactions and balances between entities consolidated in these financial statements.

As the interim Condensed Consolidated Financial Statements of the Company are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the Consolidated and Combined Financial Statements of the Company for the year ended December 31, 2009 included in the 2009 Form 10-K.

In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates.

Compliance with Financial Covenant

The Company’s senior secured credit facility contains a financial covenant which requires the Company to maintain a senior secured leverage ratio not to exceed a maximum amount on the last day of each quarter. At September 30, 2010, the maximum ratio of total senior secured net debt to trailing twelve-month Adjusted EBITDA was 5.0 to 1 and the ratio limit will step down to 4.75 to 1 on March 31, 2011 and thereafter. At September 30, 2010, the Company was in compliance with the senior secured leverage covenant with a senior secured leverage ratio of 4.57 to 1.

In order to comply with the senior secured leverage ratio for the twelve-month periods ending December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011 (or to avoid an event of default thereof), the Company will need to achieve a certain amount of Adjusted EBITDA and/or reduced levels of total senior secured net debt. The factors that will impact the foregoing include: (a) slowing decreases, stabilization or increases in sales volume and/or the price of existing homesales, (b) continuing to effect cost-savings and business productivity enhancement initiatives, (c) increasing new franchise sales, sales associate recruitment and/or brokerage and other acquisitions, (d) obtaining additional equity financing from the Company’s parent company, (e) obtaining additional debt or equity financing from third party sources or (f) a combination thereof. Factors (b) through (e) may be insufficient to overcome macroeconomic conditions affecting the Company.

Based upon the Company’s updated financial forecast and the Company’s current plan to achieve one or more of the factors noted above, the Company believes that it will continue to be in compliance with, or be able to avoid an event of default under, the senior secured leverage ratio and meet its cash flow needs during the next twelve months. The Company has the right to avoid an event of default of the senior secured leverage ratio in three of any of the four consecutive quarters through the issuance of additional Holdings equity for cash, which would be infused as capital into the Company. The effect of such infusion would be to increase Adjusted EBITDA for purposes of calculating the senior secured leverage ratio for the applicable twelve-month period and reduce net senior secured indebtedness upon actual receipt of such capital.

Our ability to maintain compliance with the financial covenant in our senior secured credit facility will likely require us to refinance or restructure our debt and/or issue additional equity. We have considered and will continue to evaluate potential transactions to refinance our indebtedness, including transactions to reduce net debt, extend maturities and/or reduce first lien indebtedness. If the Company was unable to maintain compliance with the senior secured leverage ratio and the Company fails to remedy a default through an equity cure as described above, there would be an “event of default” under the senior secured credit agreement as disclosed in the 2009 Form 10-K.

Impairment of Goodwill and Other Indefinite-Lived Intangibles

In connection with the FASB’s Intangible—Goodwill and Other guidance, the Company assesses goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company performs its required annual impairment testing in the fourth quarter of each year subsequent to completing its annual budgeting and forecasting process. The Company is currently preparing its 2011 budgets and long-term financial projections as well as evaluating the impact of industry trends on the impairment analysis. As a result, the Company is in the early stages of completing the first test of its annual impairment review and has not completed the analysis that would indicate whether or not an impairment has occurred. If the Company has an impairment upon completion of its analysis, it could have a significant impact on its results of operations for the fourth quarter of 2010 given that the Company has $2.6 billion of goodwill and $1.9 billion of indefinite-lived intangibles, although it would have no impact on the Company’s cash flows or financial covenant.

Derivative Instruments

The Company uses foreign currency forward contracts largely to manage its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables and payables. The Company primarily manages its foreign currency exposure to the Euro, Swiss Franc, British Pound and Canadian Dollar. The Company has elected not to utilize hedge accounting for these forward contracts; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations. However, the fluctuations in the value of these forward contracts generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. As of September 30, 2010 and December 31, 2009, the Company had outstanding foreign currency forward contracts with a fair value of less than $1 million and a notional value of $20 million and $15 million, respectively.

The Company enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. The Company is utilizing pay fixed rate interest swaps (in exchange for floating LIBOR rate based payments) to perform this hedging strategy. The Company entered into two interest rate swaps in April 2007 with an aggregate notional value of $575 million to hedge the variability in cash flows resulting from the term loan facility. One swap, with a notional value of $350 million, expired in July 2010 and the other swap, with a notional value of $225 million, expires in July 2012. In June 2010, the Company entered into an additional interest rate swap with a notional value of $200 million to hedge the variability in cash flows resulting from the term loan facility. This swap is effective beginning in December 2010 and expires in December 2012.

The derivatives are being accounted for as cash flow hedges in accordance with the FASB’s derivative and hedging guidance and the unfavorable fair market value of the swaps of $12 million and $15 million, net of income taxes, has been recorded within Accumulated Other Comprehensive Income/(Loss) (“AOCI”) at September 30, 2010 and December 31, 2009, respectively.

The fair value of derivative instruments were as follows:


Liability Derivatives
Designated as Hedging Instruments	Balance Sheet Location	September 30, 2010 Fair Value		December 31, 2009 Fair Value
Interest rate swap contracts	Other current liabilities	$	—	$	8
	Other non-current liabilities		20		17

		$	20	$	25

The effect of derivative instruments on earnings were as follows:


Derivatives in Cash Flow Hedge Relationships	Gain or (Loss) Recognized in Other Comprehensive Income					Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain or (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedge Relationships	Three Months Ended September 30, 2010			Nine Months Ended September 30, 2010			Three Months Ended September 30, 2010			Nine Months Ended September 30, 2010
Interest rate swap contracts	$	(1	)	$	5	Interest expense	$	(3	)	$	(16	)


Derivatives in Cash Flow Hedge Relationships	Gain or (Loss) Recognized in Other Comprehensive Income				Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain or (Loss) Reclassified from AOCI into Income
Derivatives in Cash Flow Hedge Relationships	Three Months Ended September 30, 2009		Nine Months Ended September 30, 2009			Three Months Ended September 30, 2009			Nine Months Ended September 30, 2009
Interest rate swap contracts	$	—	$	7	Interest expense	$	(6	)	$	(15	)


Derivative Instruments Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income for Derivative Instruments	Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended September 30, 2010			Nine Months Ended September 30, 2010
Foreign exchange contracts	Operating expense	$	(2	)	$	(1	)


Derivative Instruments Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income for Derivative Instruments	Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended September 30, 2009		Nine Months Ended September 30, 2009
Foreign exchange contracts	Operating expense	$	—	$	(1	)

Financial Instruments

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.


Level Input:		Input Definitions:
Level I		Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II		Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III		Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach that incorporates counterparty and performance risk and therefore is categorized in Level III.

The following table summarizes fair value measurements by level at September 30, 2010 for assets and liabilities measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total
Derivatives
Interest rate swaps (included in other non-current liabilities)	$	—	$	—	$	20	$	20
Deferred compensation plan assets (included in other non-current assets)		1		—		—		1

The following table summarizes fair value measurements by level at December 31, 2009 for assets and liabilities measured at fair value on a recurring basis:


	Level I		Level II		Level III		Total
Derivatives
Interest rate swaps (primarily included in other non-current liabilities)	$	—	$	—	$	25	$	25
Deferred compensation plan assets (included in other non-current assets)		2		—		—		2

The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis:


Fair value at December 31, 2009	$	25
Change reflected in other comprehensive loss		(5	)

Fair value at September 30, 2010	$	20

The following table summarizes the carrying amount of the Company’s indebtedness compared to the estimated fair value primarily determined by quoted market values at:


	September 30, 2010				December 31, 2009
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Debt
Securitization obligations	$	338	$	338	$	305	$	305
Term loan facility		3,067		2,760		3,091		2,784
Second Lien Loans		650		702		650		699
Other bank indebtedness		138		138		—		—
Fixed Rate Senior Notes		1,688		1,447		1,686		1,427
Senior Toggle Notes		441		378		416		341
Senior Subordinated Notes		864		684		863		668

Income Taxes

The Company’s provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income (loss) before income taxes for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The Company’s income tax expense for the three and nine months ended September 30, 2010 was $10 million and $134 million, respectively. The components of the Company’s income tax expense for the nine months ended September 30, 2010 are as follows:

•

$109 million of income tax expense was recorded for the reduction of certain deferred tax assets as a result of our former parent company’s IRS examination settlement of Cendant’s taxable years 2003 through 2006;

•

due to the recognition of a full valuation allowance for domestic operations, no additional U.S. Federal income tax benefit was recognized for the current period;

•

$20 million of income tax expense was recorded for an increase in deferred tax liabilities associated with indefinite-lived intangible assets; and

•

$5 million of income tax expense was recognized primarily for foreign and state income taxes for certain jurisdictions.

Supplemental Cash Flow Information

The Company had significant non-cash transactions in the second quarter of 2010 and 2009 pursuant to the terms of the Senior Toggle Notes. The Company elected to satisfy its interest payment obligations by issuing Senior Toggle Notes of $25 million and $34 million, respectively, which resulted in a non-cash transfer between accrued interest and long term debt.

Defined Benefit Pension Plan

The net periodic pension cost for the three months ended September 30, 2010 was less than $1 million and was comprised of interest cost and amortization of amounts previously recorded as other comprehensive income of $2 million offset by a benefit of $1 million for the expected return on assets. The net periodic pension cost for the three months ended September 30, 2009 was less than $1 million and was comprised of interest cost and amortization of amounts previously recorded as other comprehensive income of $2 million offset by a benefit of $1 million for the expected return on assets.

The net periodic pension cost for the nine months ended September 30, 2010 was $2 million and was comprised of interest cost and amortization of amounts previously recorded as other comprehensive income of $6 million offset by a benefit of $4 million for the expected return on assets. The net periodic pension cost for the

nine months ended September 30, 2009 was $2 million and was comprised of interest cost and amortization of amounts previously recorded as other comprehensive income of $6 million offset by a benefit of $4 million for the expected return on assets.

Recently Adopted Accounting Pronouncements

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. The new guidance (1) eliminates the concept of qualifying special purpose entities, which will likely result in many transferors consolidating such entities; (2) provides a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting; (3) clarifies and amends the derecognition criteria for a transfer to be accounted for as a sale; and (4) requires extensive new disclosures. The Company adopted the new guidance beginning January 1, 2010 and the guidance did not have a significant impact on the consolidated financial statements.

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities. The guidance affects the determination of whether an entity is a variable interest entity (“VIE”) and requires an enterprise to perform a qualitative analysis to determine whether its variable interest or interests give it a controlling financial interest in a VIE. Under the new guidance, an enterprise has a controlling financial interest when it has (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The guidance also requires ongoing assessments of whether the reporting entity is the primary beneficiary of a VIE to consolidate, requires enhanced disclosures and eliminates the scope exclusion for qualifying special purpose entities. The Company adopted the guidance beginning January 1, 2010 and the guidance did not have a significant impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2009, the FASB issued an amendment to the accounting and disclosure for revenue recognition. The amendment modifies the criteria for recognizing revenue in multiple element arrangements. Under the guidance, in the absence of vendor-specific objective evidence (“VSOE”) or other third party evidence (“TPE”) of the selling price for the deliverables in a multiple-element arrangement, this amendment requires companies to use the best estimated selling price (“BESP”) for the individual deliverables. Companies shall apply the relative-selling price model for allocating an arrangement’s total consideration to its individual deliverables. Under this model, the BESP is used for both the delivered and undelivered elements that do not have VSOE or TPE of the selling price. The guidance is effective for the fiscal year beginning on or after June 15, 2010, and will be applied prospectively to revenue arrangements entered into or materially modified after the effective date. The Company intends to adopt the new guidance prospectively beginning January 1, 2011 and does not believe that the guidance will have a significant impact on the consolidated financial statements.

In January 2010, the FASB expanded the disclosure requirements for fair value measurements relating to the transfers in and out of Level 2 measurements and amended the disclosures for the Level 3 activity reconciliation to be presented on a gross basis. In addition, valuation techniques and inputs should be disclosed for both Levels 2 and 3 recurring and nonrecurring measurements. The new requirements are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about the Level 3 activity reconciliation which are effective for fiscal years beginning after December 15, 2010. The Company adopted the new disclosure requirements on January 1, 2010 except for the disclosure related to the Level 3 reconciliation, which will be adopted on January 1, 2011. The adoption will not have an impact on the consolidated financial statements.

2.	COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) consisted of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Net income (loss)	$	(33	)	$	59		$	(7	)	$	(215	)
Foreign currency translation adjustments		2			(1	)		1			2
Change in fair value of interest rate hedges, net		—			—			3			4

Comprehensive income (loss)		(31	)		58			(3	)		(209	)
Comprehensive income attributable to noncontrolling interests		—			(1	)		(1	)		(1	)

Total comprehensive income (loss) attributable to Realogy	$	(31	)	$	57		$	(4	)	$	(210	)

3.	ACQUISITIONS

Assets acquired and liabilities assumed in business combinations were recorded in the Company’s Consolidated Balance Sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the Company’s Consolidated Statements of Operations since their respective dates of acquisition.

Primacy Acquisition

On January 21, 2010, the Company completed the stock acquisition of Primacy Relocation, LLC (“Primacy”) for the assumption of approximately $26 million of indebtedness (excluding $9 million of indebtedness related to the sale of relocation receivables) as well as contingent consideration (earn-out payment) related to a portion of earnings generated from Primacy’s “at-risk” relocation business through 2012. In accordance with current accounting guidance, the contingent consideration liability is adjusted to its fair value at each reporting period.

Primacy is a relocation and global assignment management services company headquartered in Memphis, Tennessee with international locations in Canada, Europe and Asia. The following summarizes the estimated fair values of the assets acquired and liabilities assumed:

•

current assets of $101 million primarily comprised of $27 million of relocation receivables and $63 million of relocation properties held for sale;

•

non-current assets of $88 million primarily comprised of goodwill of $16 million and intangible assets of $67 million;

•

current liabilities of $179 million primarily comprised of accounts payable and accrued expenses of $90 million, home mortgage obligations of $62 million and bank indebtedness of $27 million; and

•

non-current liabilities of $10 million.

The goodwill and intangible assets were primarily assigned to the Company’s Relocation Services segment and are discussed in Note 4, “Intangible Assets”.

4.	INTANGIBLE ASSETS

Goodwill by segment and changes in the carrying amount are as follows:


	Real Estate Franchise Services			Company Owned Brokerage Services			Relocation Services			Title and Settlement Services			Total Company
Gross goodwill as of December 31, 2009	$	2,265		$	762		$	625		$	397		$	4,049
Accumulated impairment		(709	)		(158	)		(281	)		(324	)		(1,472	)

Balance at December 31, 2009		1,556			604			344			73			2,577
Goodwill acquired ^(a)		—			—			16			—			16
Goodwill reduction for locations sold		—			(2	)		—			—			(2	)

Balance at September 30, 2010	$	1,556		$	602		$	360		$	73		$	2,591

(a)	The increase in goodwill relates to the acquisition of Primacy in January 2010.

Intangible assets are as follows:


	As of September 30, 2010						As of December 31, 2009
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Franchise Agreements
Amortizable — Franchise agreements ^(a)	$	2,019	$	239	$	1,780	$	2,019	$	188	$	1,831
Unamortizable—Franchise agreement ^(b)		1,145		—		1,145		1,145		—		1,145

Total Franchise Agreements	$	3,164	$	239	$	2,925	$	3,164	$	188	$	2,976

Unamortizable—Trademarks ^(c)	$	732	$	—	$	732	$	732	$	—	$	732

Other Intangibles
Amortizable—License agreements ^(d)	$	45	$	3	$	42	$	45	$	3	$	42
Amortizable—Customer relationships ^(e) ^(h)		529		98		431		467		70		397
Unamortizable—Title plant shares ^(f)		10		—		10		10		—		10
Amortizable—Other ^(g) (h)		12		7		5		8		4		4

Total Other Intangibles	$	596	$	108	$	488	$	530	$	77	$	453

(a)	Generally amortized over a period of 30 years.

(b)	Relates to the Real Estate Franchise Services franchise agreement with NRT, which is expected to generate future cash flows for an indefinite period of time.

(c)	Relates to the Century 21, Coldwell Banker, ERA, The Corcoran Group, Coldwell Banker Commercial and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time.

(d)	Relates to the Sotheby’s International Realty and Better Homes and Gardens Real Estate agreements which will be amortized over 50 years (the contractual term of the license agreements).

(e)	Relates to the customer relationships at the Title and Settlement Services segment and the Relocation Services segment. These relationships will be amortized over a period of 5 to 20 years.

(f)	Primarily related to the Texas American Title Company title plant shares. Ownership in a title plant is required to transact title insurance in certain states. The Company expects to generate future cash flows for an indefinite period of time.

(g)	Generally amortized over periods ranging from 2 to 10 years.

(h)	The acquisition of Primacy increased customer relationships intangibles by $62 million and other intangibles by $5 million.

Intangible asset amortization expense is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Franchise agreements	$	17	$	17	$	51	$	51
Customer relationships		9		6		28		19
Other		1		1		3		1

Total	$	27	$	24	$	82	$	71

Based on the Company’s amortizable intangible assets as of September 30, 2010, the Company expects related amortization expense for the remainder of 2010, the four succeeding years and thereafter to approximate $27 million, $108 million, $108 million, $108 million, $108 million and $1,799 million, respectively.

5.	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:


	September 30, 2010		December 31, 2009
Accrued payroll and related employee costs	$	91	$	78
Accrued volume incentives		15		18
Accrued commissions		23		19
Restructuring accruals		36		47
Deferred income		73		64
Accrued interest		211		125
Relocation services home mortgage obligations		24		—
Other		158		151

	$	631	$	502

6.	SHORT AND LONG TERM DEBT

Total indebtedness is as follows:


	September 30, 2010		December 31, 2009
Senior Secured Credit Facility:
Revolving credit facility	$	—	$	—
Term loan facility		3,067		3,091
Second Lien Loans		650		650
Other bank indebtedness		138		—
Fixed Rate Senior Notes		1,688		1,686
Senior Toggle Notes		441		416
Senior Subordinated Notes		864		863
Securitization Obligations:
Apple Ridge Funding LLC		313		281
Cartus Financing Limited		25		—
U.K. Relocation Receivables Funding Limited		—		24

	$	7,186	$	7,011

SENIOR SECURED CREDIT FACILITY

The senior secured credit facility consists of (i) a $3,170 million term loan facility, (ii) a $750 million revolving credit facility, (iii) a $525 million synthetic letter of credit facility (the facilities described in clauses (i), (ii), and (iii), collectively referred to as the “First Lien Facilities”), and (iv) a $650 million incremental loan facility.

Interest rates with respect to term loans under the senior secured credit facility are based on, at the Company’s option, (a) adjusted LIBOR plus 3.0% or (b) the higher of the Federal Funds Effective Rate plus 0.5% or JPMorgan Chase Bank, N.A.’s prime rate (“ABR”) plus 2.0%. The term loan facility provides for quarterly amortization payments totaling 1% per annum of the principal amount with the balance due on the final maturity date. Interest rates with respect to revolving loans under the senior secured credit facility are based on, at the Company’s option, adjusted LIBOR plus 2.25% or ABR plus 1.25%, in each case subject to reductions based on the attainment of certain leverage ratios.

The $750 million revolving credit facility had no borrowings outstanding as of September 30, 2010, however, there was $120 million outstanding as of November 5, 2010. The revolving credit facility includes a $200 million letter of credit sub-facility which had $73 million of remaining capacity at September 30, 2010 and $46 million of remaining capacity at November 5, 2010.

The Company’s senior secured credit facility initially provided for a six-and-a-half-year $525 million synthetic letter of credit facility which is used for: (1) the support of the Company’s obligations with respect to Cendant contingent and other liabilities assumed under the Separation and Distribution Agreement and (2) general corporate purposes in an amount not to exceed $100 million. In light of the reduction in Cendant’s contingent and other liabilities, the Company voluntarily reduced the capacity of the facility to $257 million during the third quarter of 2010. At September 30, 2010, the $257 million of capacity is being utilized by a $133 million letter of credit with Cendant for any remaining potential contingent obligations and $100 million of letters of credit for general corporate purposes. The remaining capacity of $24 million can only be used for Cendant liability claims.

The Company’s loans under the First Lien Facilities (the “First Lien Loans”) are secured to the extent legally permissible by substantially all of the assets of the Company’s parent company, the Company and the subsidiary guarantors, including but not limited to (a) a first-priority pledge of substantially all capital stock held by the Company or any subsidiary guarantor (which pledge, with respect to obligations in respect of the borrowings secured by a pledge of the stock of any first-tier foreign subsidiary, is limited to 100% of the non-voting stock (if any) and 65% of the voting stock of such foreign subsidiary), and (b) perfected first-priority security interests in substantially all tangible and intangible assets of the Company and each subsidiary guarantor, subject to certain exceptions.

In late 2009, the Company incurred $650 million of second lien term loans under the incremental loan feature of the senior secured credit facility (the “Second Lien Loans”). The Second Lien Loans are secured by liens on the assets of the Company and by the guarantors that secure the First Lien Loans. However, such liens are junior in priority to the First Lien Loans. The Second Lien Loans bear interest at a rate of 13.50% per year and interest payments are payable semi-annually with the first interest payment made on April 15, 2010. The Second Lien Loans mature on October 15, 2017 and there are no required amortization payments.

The Company’s senior secured credit facility contains financial, affirmative and negative covenants and requires the Company to maintain a senior secured leverage ratio not to exceed a maximum amount on the last day of each quarter. Specifically, the Company’s total senior secured net debt to trailing twelve month EBITDA (as such terms are defined in the senior secured credit facility), calculated on a “pro forma” basis pursuant to the senior secured credit facility, may not exceed 5.0 to 1 at September 30, 2010. The ratio steps down to 4.75 to 1 on March 31, 2011 and thereafter. Total senior secured net debt does not include the Second Lien Loans, other

bank indebtedness not secured by a first lien on our assets, securitization obligations or the Unsecured Notes (defined below). EBITDA, as defined in the senior secured credit facility, includes certain adjustments and also is calculated on a pro forma basis for purposes of calculating the senior secured leverage ratio. In this report, the Company refers to the term “Adjusted EBITDA” to mean EBITDA as so defined and calculated for purposes of determining compliance with the senior secured leverage covenant. At September 30, 2010, the Company was in compliance with the senior secured leverage ratio. See “Financial Conditions, Liquidity and Capital Resources—EBITDA and Adjusted EBITDA” for the detailed covenant calculation.

The Company’s current financial forecast of Adjusted EBITDA includes additional cost-saving and business optimization initiatives. As such initiatives are implemented; management will give pro forma effect to such measures and add back the savings or enhanced revenue from those initiatives as if they had been implemented at the beginning of the trailing twelve-month period for calculating compliance with the senior secured leverage covenant.

Based upon the Company’s updated financial forecast and the Company’s current plan to achieve one or more of the factors noted above, the Company believes that it will continue to be in compliance with, or be able to avoid an event of default under, the senior secured leverage ratio and meet its cash flow needs during the next twelve months. The Company has the right to avoid an event of default of the senior secured leverage ratio in three of any of the four consecutive quarters through the issuance of additional Holdings equity for cash, which would be infused as capital into the Company. The effect of such infusion would be to increase Adjusted EBITDA for purposes of calculating the senior secured leverage ratio for the applicable twelve month period and reduce net senior secured indebtedness upon actual receipt of such capital.

OTHER BANK INDEBTEDNESS

During the first six months of 2010, the Company entered into five separate revolving credit facilities to borrow up to $130 million. These facilities bear interest at a weighted average rate of LIBOR plus 1.6% or 3% as of September 30, 2010. The facilities are subject to a minimum interest rate of LIBOR plus 1.4% and interest payments are payable either monthly or quarterly. In August 2010, the Company entered into an additional revolving credit facility to borrow up to £5 million with an interest rate at the lender’s base rate plus 2.0% or 2.5% as of September 30, 2010. These facilities are not secured by assets of the Company or any of its subsidiaries but are supported by letters of credit issued under the senior secured credit facility. The facilities generally have a one-year term with certain options for renewal, though one facility has a term expiring in January 2013. As of September 30, 2010, the Company has borrowed $138 million, which is the total capacity available under these facilities, $40 million of which was used to finance the Primacy acquisition in January 2010.

On November 4, 2010, the Company amended one of the revolving credit facilities noted above to increase the capacity from $25 million to $50 million and extend the maturity date from April 2011 to November 2011.

UNSECURED NOTES

On April 10, 2007, the Company issued $1,700 million aggregate principal amount of 10.50% Senior Notes (the “Fixed Rate Senior Notes”), $550 million of original aggregate principal amount of 11.00%/11.75% Senior Toggle Notes (the “Senior Toggle Notes”) and $875 million aggregate principal amount of 12.375% Senior Subordinated Notes (the “Senior Subordinated Notes”). The Company refers to these notes collectively using the term “Unsecured Notes”.

The Fixed Rate Senior Notes mature on April 15, 2014 and bear interest at a rate per annum of 10.50% payable semiannually to holders of record at the close of business on April 1 and October 1 immediately preceding the interest payment dates of April 15 and October 15 of each year.

The Senior Toggle Notes mature on April 15, 2014. Interest is payable semiannually to holders of record at the close of business on April 1 or October 1 immediately preceding the interest payment date on April 15 and October 15 of each year.

For any interest payment period after the initial interest payment period and through October 15, 2011, the Company may, at its option, elect to pay interest on the Senior Toggle Notes (1) entirely in cash (“Cash Interest”), (2) entirely by increasing the principal amount of the outstanding Senior Toggle Notes or by issuing Senior Toggle Notes (“PIK Interest”), or (3) 50% as Cash Interest and 50% as PIK Interest. After October 15, 2011, the Company is required to make all interest payments on the Senior Toggle Notes entirely in cash. Cash interest on the Senior Toggle Notes will accrue at a rate of 11.00% per annum. PIK Interest on the Senior Toggle Notes will accrue at the Cash Interest rate per annum plus 0.75%. In the absence of an election for any interest period, interest on the Senior Toggle Notes shall be payable according to the method of payment for the previous interest period.

Beginning with the interest period which ended October 2008, the Company elected to satisfy its interest payment obligations by issuing additional Senior Toggle Notes. This PIK Interest election is now the default election for future interest periods through October 15, 2011 unless the Company notifies otherwise prior to the commencement date of a future interest period.

The Company would be subject to certain interest deduction limitations if the Senior Toggle Notes were treated as “applicable high yield discount obligations” (“AHYDO”) within the meaning of Section 163(i)(1) of the Internal Revenue Code. In order to avoid such treatment, the Company is required to redeem for cash a portion of each Senior Toggle Note then outstanding. The portion of a Senior Toggle Note required to be redeemed is an amount equal to the excess of the accrued original issue discount as of the end of such accrual period, less the amount of interest paid in cash on or before such date, less the first-year yield (the issue price of the debt instrument multiplied by its yield to maturity). The redemption price for the portion of each Senior Toggle Note so redeemed would be 100% of the principal amount of such portion plus any accrued interest on the date of redemption. Assuming that the Company continues to utilize the PIK Interest option election through October 2011, the Company would be required to repay approximately $132 million in April 2012 in accordance with the indenture governing the Senior Toggle Notes.

The Senior Subordinated Notes mature on April 15, 2015 and bear interest at a rate per annum of 12.375% payable semiannually to holders of record at the close of business on April 1 or October 1 immediately preceding the interest payment date on April 15 and October 15 of each year.

SENIOR TOGGLE NOTE EXCHANGE

On September 24, 2009, we and certain affiliates of Apollo entered into an agreement with a third party pursuant to which we exchanged approximately $221 million aggregate principal amount of Senior Toggle Notes held by it for $150 million aggregate principal amount of Second Lien Loans. The third party also sold the balance of the Senior Toggle Notes it held for cash to an affiliate of Apollo in a privately negotiated transaction and used a portion of the cash proceeds to participate as a lender in the Second Lien Loan transaction. The transaction with the third party closed concurrently with the initial closing of the Second Lien Loans. As a result of the exchange, the Company recorded a gain on the extinguishment of debt of $75 million.

SECURITIZATION OBLIGATIONS

The Company has secured obligations through Apple Ridge Funding LLC, a securitization program with a five-year term which expires in April 2012. Until August 2010, the Company also had secured obligations through U.K. Relocation Receivables Funding Limited, a securitization program with a four-year term. On August 23, 2010, the Company terminated the U.K. Relocation Receivables Funding Limited securitization program and replaced it with new credit facilities, as described below.

On August 19, 2010, the Company through a special purpose entity, Cartus Financing Limited, entered into new agreements that provide for a £35 million revolving loan facility and a £5 million working capital facility. These facilities are secured by relocation assets of a U.K. government contract in a special purpose entity and are therefore classified as permitted securitization financings as defined in the Company’s senior secured credit facility and the indentures governing the Unsecured Notes. The £35 million facility has a term of five years and the £5 million working capital facility has a term of one year.

The Apple Ridge entities and the new U.K. entity are consolidated special purpose entities that are utilized to securitize relocation receivables and related assets. These assets are generated from advancing funds on behalf of clients of the Company’s relocation business in order to facilitate the relocation of their employees. Assets of these special purpose entities are not available to pay the Company’s general obligations. Under the Apple Ridge program, provided no termination or amortization event has occurred, any new receivables generated under the designated relocation management agreements are sold into the securitization program and as new relocation management agreements are entered into, the new agreements may also be designated to the program.

Certain of the funds that the Company receives from relocation receivables and related assets must be utilized to repay securitization obligations. These obligations are collateralized by $412 million and $364 million of underlying relocation receivables and other related relocation assets at September 30, 2010 and December 31, 2009, respectively. Substantially all relocation related assets are realized in less than twelve months from the transaction date. Accordingly, all of the Company’s securitization obligations are classified as current in the accompanying Condensed Consolidated Balance Sheets.

Interest incurred in connection with borrowings under these facilities amounted to $2 million and $5 million for the three and nine months ended September 30, 2010, respectively, and $2 million and $10 million for the three and nine months ended September 30, 2009, respectively. This interest is recorded within net revenues in the accompanying Condensed Consolidated Statements of Operations as related borrowings are utilized to fund the Company’s relocation business where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was 2.6% and 2.4% for the nine months ended September 30, 2010 and 2009, respectively.

AVAILABLE CAPACITY

As of September 30, 2010, the total capacity, outstanding borrowings and available capacity under the Company’s borrowing arrangements is as follows:


	Expiration Date	Total Capacity		Outstanding Borrowings		Available Capacity
Senior Secured Credit Facility:
Revolving credit facility ⁽¹⁾	April 2013	$	750	$	—	$	623
Term loan facility ⁽²⁾	October 2013		3,067		3,067		—
Second Lien Loans	October 2017		650		650		—
Other bank indebtedness ⁽³⁾	Various		138		138		—
Fixed Rate Senior Notes ⁽⁴⁾	April 2014		1,700		1,688		—
Senior Toggle Notes ⁽⁵⁾	April 2014		444		441		—
Senior Subordinated Notes ⁽⁶⁾	April 2015		875		864		—
Securitization obligations:
Apple Ridge Funding LLC ⁽⁷⁾	April 2012		500		313		187
Cartus Financing Limited ⁽⁸⁾	Various		63		25		38
U.K. Relocation Receivables Funding Limited ⁽⁹⁾	April 2011		—		—		—

		$	8,187	$	7,186	$	848

(1)	The available capacity under this facility was reduced by $127 million of outstanding letters of credit at September 30, 2010. On November 5, 2010, the Company had $120 million outstanding on the revolving credit facility and $154 million of outstanding letters of credit.

(2)	Total capacity has been reduced by the quarterly principal payments of 0.25% of the loan balance as required under this facility. The interest rate on the term loan facility was 3.28% at September 30, 2010.

(3)	Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $30 million is due in April 2011, $50 million is due in June 2011, $8 million is due in August 2011 and $50 million is due in January 2013.

(4)	Consists of $1,700 million of 10.50% Senior Notes due 2014, less a discount of $12 million.

(5)	Consists of $444 million of 11.00%/11.75% Senior Toggle Notes due 2014, less a discount of $3 million. On October 15, 2010, the Company issued $26 million of Senior Toggle Notes to satisfy its interest payment obligation for the six-month period ended October 2010.

(6)	Consists of $875 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $11 million.

(7)	Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.

(8)	Consists of a £35 million facility with a term of five years and a £5 million working capital facility with a term of one year.

(9)	The Company terminated this facility in August 2010.

7.	RESTRUCTURING COSTS

2010 Restructuring Program

During the nine months ended September 30, 2010, the Company committed to various initiatives targeted principally at reducing costs and enhancing organizational efficiencies while consolidating existing processes and facilities. The Company currently expects to incur restructuring charges of $20 million in 2010. As of September 30, 2010, the Company has recognized $13 million of the expense related to the 2010 restructuring plan.

Restructuring charges by segment for the nine months ended September 30, 2010 were as follows:


	Opening Balance		Expense Recognized and Other Additions			Cash Payments/ Other Reductions			Liability as of September 30, 2010
Real Estate Franchise Services	$	—	$	—		$	—		$	—
Company Owned Real Estate Brokerage Services		—		8			(5	)		3
Relocation Services		—		4	^(a)		(1	)		3
Title and Settlement Services		—		2			(2	)		—
Corporate and Other		—		—			—			—

	$	—	$	14	^(b)	$	(8	)	$	6

(a)	Includes $1 million of unfavorable lease liability recorded in purchase accounting for Primacy which was reclassified to restructuring liability as a result of the Company restructuring certain facilities after the acquisition date.

(b)	Current year restructuring expense on the Statement of Operations is net of $1 million related to the reversal of prior years restructuring accruals.

The table below shows restructuring charges by category and the corresponding payments and other reductions for the nine months ended September 30, 2010:


	Personnel Related			Facility Related			Asset Impairments			Total
Restructuring expense and other additions	$	3		$	10		$	1		$	14
Cash payments and other reductions		(3	)		(4	)		(1	)		(8	)

Balance at September 30, 2010	$	—		$	6		$	—		$	6

2009 Restructuring Program

During 2009, the Company committed to various initiatives targeted principally at reducing costs, enhancing organizational efficiencies and consolidating facilities. The Company recognized $74 million of restructuring expense in 2009 and the remaining liability at December 31, 2009 was $34 million.

The recognition of the 2009 restructuring charge and the corresponding utilization from inception to September 30, 2010 are summarized by category as follows:


	Personnel Related			Facility Related			Asset Impairments			Total
Restructuring expense	$	19		$	46		$	9		$	74
Cash payments and other reductions		(17	)		(14	)		(9	)		(40	)

Balance at December 31, 2009		2			32			—			34
Cash payments and other reductions		(1	)		(11	)		—			(12	)

Balance at September 30, 2010	$	1		$	21		$	—		$	22

8.	STOCK-BASED COMPENSATION

Incentive Equity Awards Granted by Holdings

In connection with the closing of the Transactions on April 10, 2007, Holdings adopted the Domus Holdings Corp. 2007 Stock Incentive Plan (the “Plan”) under which non-qualified stock options, rights to purchase shares of common stock, restricted stock and other awards settleable in, or based upon, common stock may be issued to employees, consultants or directors of the Company or any of its subsidiaries. On November 13, 2007, the Holdings Board authorized an increase in the number of shares of Holdings common stock reserved for issuance

under the Plan from 15 million shares to 20 million shares. In conjunction with the closing of the Transactions on April 10, 2007, Holdings granted approximately 11.2 million of stock options in three separate tranches to officers and key employees and approximately 0.4 million of restricted stock to senior officers. On November 13, 2007, in connection with the appointment of Henry R. Silverman to non-executive Chairman of the Company, the Holdings Board granted Mr. Silverman an option to purchase 5 million shares of Holdings common stock at $10 per share with a per share fair value of $8.09 which was based upon the fair value of the Company on the date of the grant. In general, one half of the grant (the tranche A options) is subject to ratable vesting over five years, one quarter of the grant (the tranche B options) is “cliff” vested upon the achievement of a 20% internal rate of return (“IRR”) target and the remaining 25% of the options (the tranche C options) are “cliff” vested upon the achievement of a 25% IRR target. The realized IRR targets are measured based upon distributions made to the stockholders of Holdings. In addition, at April 10, 2007, 2.3 million shares were purchased under the Plan at fair value by senior management of the Company. During 2008, the Holdings Board granted an aggregate 291,000 stock options and 9,000 shares of restricted stock to senior management employees and an independent director of the Company. No stock options were granted during 2009 or during the nine months ended September 30, 2010. As of September 30, 2010, the total number of shares available for future grant under the Plan was approximately 2 million shares.

Three tranches of options (“A”, “B” and “C”) were granted to employees and the non-executive Chairman at the estimated fair value at the date of issuance with the following terms:


	Option Tranche
	A	B	C
Weighted average exercise price	$10.00	$10.00	$10.00
Vesting	5 years ratable	(1)	(1)
Term of option	10 years	10 years	10 years

(1)	Tranche B and C vesting is based upon affiliates of Apollo and co-investors achieving specific IRR targets on their investment in the Company.

The fair value of the tranche A options was estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of tranches B and C options was estimated on the date of grant using a lattice based option valuation model.

Restricted Stock Granted by Holdings

One half of the restricted stock granted to employees “cliff” vested in October 2008 and the remaining restricted stock “cliff” vested in April 2010. One half of the director restricted stock “cliff” vested in August 2009 and the remaining restricted stock will “cliff” vest in February 2011. Shares were granted at the fair market price of $10, which was the price paid by affiliates of Apollo and co-investors in connection with the purchase of Holdings shares on the date the merger was consummated.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense of $1 million and $4 million related to the incentive equity awards granted by Holdings for the three and nine months ended September 30, 2010, respectively, and expense of $2 million and $5 million for the three and nine months ended September 30, 2009, respectively.

Equity Award Activity

A summary of option and restricted share activity is presented below (number of shares in millions):


	Option Tranche									Restricted Stock
	A			B			C			Restricted Stock
Outstanding at December 31, 2009		7.79			3.87			3.87			0.23
Granted		—			—			—			—
Vested		—			—			—			(0.23	)
Exercised		—			—			—			—
Forfeited		(0.12	)		(0.06	)		(0.06	)		—

Outstanding at September 30, 2010		7.67			3.81			3.81			—

Exercisable at September 30, 2010		4.07			—			—			—

Weighted average remaining contractual term (years)		6.75			6.75			6.75


	Options Vested		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Exercisable at September 30, 2010		4.07	$	10.00		6.69 years	$	—

As of September 30, 2010, there was $10 million of unrecognized compensation cost related to the remaining vesting period of tranche A options under the Plan, and $21 million of unrecognized compensation cost related to tranches B and C options. Unrecognized cost for tranche A will be recorded in future periods as compensation expense over a weighted average period of approximately 1.7 years, and the unrecognized cost for tranches B and C options will be recorded as compensation expense when an IPO or significant capital transaction is probable of occurring.

See Note 13, “Subsequent Events” for information related to the Company’s offer to exchange certain stock options for new stock options that was initiated on October 8, 2010 and expired on November 8, 2010.

9.	SEPARATION ADJUSTMENTS AND TRANSACTIONS WITH FORMER PARENT AND SUBSIDIARIES

Transfer of Cendant Corporate Liabilities and Issuance of Guarantees to Cendant and Affiliates

Pursuant to the Separation and Distribution Agreement, upon the distribution of the Company’s common stock to Cendant stockholders, the Company entered into certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify Cendant, Wyndham Worldwide and Travelport for such liabilities) and guarantee commitments related to deferred compensation arrangements with Cendant and Wyndham Worldwide. These guarantee arrangements primarily relate to certain contingent litigation liabilities, contingent tax liabilities, and other corporate liabilities, of which the Company assumed and is generally responsible for 62.5% of the contingent liabilities. Regarding the guarantees, if any of the companies responsible for all or a portion of such liabilities were to default in its payment of costs or expenses related to any such liability, then the Company would be responsible for a portion of the defaulting party or parties’ obligation. To the extent such recorded liabilities are in excess or are not adequate to cover the ultimate payment amounts, such deficiency or excess will be reflected in the results of operations in future periods.

The due to former parent balance was $117 million at September 30, 2010 and has decreased from the $505 million balance at December 31, 2009 as a result of tax and other liability adjustments relating to (i) Cendant’s IRS examination settlement of Cendant’s taxable years 2003 through 2006, (ii) Cendant’s state and foreign contingent tax liabilities, (iii) accrued interest on contingent tax liabilities, (iv) Cendant’s terminated or divested businesses, and (v) the residual portion of accruals for Cendant operations. See Note 10 “Commitments and

Contingencies” for additional information on Cendant’s IRS settlement. The income statement impact of adjustments to the Company’s due to former parent balance is included in “Former parent legacy costs (benefit), net” on the Statement of Operations.

Tax Receivable Prepayment Agreement with Wright Express Corporation

On June 26, 2009, the Company entered into a Tax Receivable Prepayment Agreement (the “Prepayment Agreement”) with Wright Express Corporation (“WEX”), pursuant to which WEX simultaneously paid the Company $51 million, less expenses of approximately $2 million, as prepayment in full of its remaining contingent obligations to Realogy under the Tax Receivable Agreement (the “TRA”), dated February 22, 2005, among WEX, Cendant and Cendant Mobility Services Corporation (n/k/a Cartus).

Cendant and WEX had entered into the TRA in connection with Cendant’s disposition of the WEX business in an initial public offering in February 2005. As a result of the initial public offering, the tax basis of WEX’s tangible and intangible assets increased to their fair market value. Pursuant to the TRA, WEX had agreed to pay Cendant 85% of tax savings related to the increased tax basis of the assets and their related amortization over a 15-year period. The actual amount of payments, if any, and the timing of receipt of any payments were variable, depending upon a number of factors, including whether WEX earned sufficient taxable income to realize the full tax benefit of the amortization of its assets. Pursuant to the Separation and Distribution Agreement, the Company acquired from Cendant the right to receive 62.5% of the payments by WEX to Cendant under the TRA.

Transactions with PHH Corporation

In January 2005, Cendant completed the spin-off of its former mortgage, fleet leasing and appraisal businesses in a tax-free distribution of 100% of the common stock of PHH to its stockholders. In connection with the spin-off, the Company entered a venture, PHH Home Loans, with PHH for the purpose of originating and selling mortgage loans primarily sourced through the Company’s real estate brokerage and relocation businesses. The Company owns 49.9% of the venture. The Company entered into an agreement with PHH and PHH Home Loans regarding the operation of the venture. The Company also entered into a marketing agreement with PHH whereby PHH is the recommended provider of mortgage products and services promoted by the Company to its independently owned and operated franchisees and a license agreement with PHH whereby PHH Home Loans was granted a license to use certain of the Company’s real estate brand names. The Company also maintains a relocation agreement with PHH whereby PHH outsourced its employee relocation function to the Company and the Company subleases office space to PHH Home Loans.

In connection with these agreements, the Company recorded revenues of $1 million and $4 million for the three and nine months ended September 30, 2010, respectively and revenues of $2 million and $5 million for the three and nine months ended September 30, 2009, respectively. The Company recorded equity earnings of $13 million and $21 million for the three and nine months ended September 30, 2010, respectively and equity earnings of $5 million and $17 million for the three and nine months ended September 30, 2009, respectively. The Company received $5 million and $8 million in dividend distributions from PHH Home Loans during the nine months ended September 30, 2010 and 2009, respectively.

Transactions with Related Parties

The Company has entered into certain transactions in the normal course of business with entities that are owned by affiliates of Apollo. For the three and nine months ended September 30, 2010 and 2009, the Company has recognized revenue and expenses related to these transactions of less than $1 million in the aggregate in each period.

10.

COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved in claims, legal proceedings and governmental inquiries related to alleged contract disputes, business practices, intellectual property and other commercial, employment and tax matters.

Examples of such matters include but are not limited to allegations: (i) concerning adverse impacts to franchisees related to purported changes made to the Century 21 ^® system and its National Advertising Fund after the Company acquired it in 1995, which is referred to elsewhere in this report as the “Cooper Litigation”; (ii) that the Company is vicariously liable for the acts of franchisees under theories of actual or apparent agency; (iii) by former franchisees, that franchise agreements were improperly terminated, (iv) that residential real estate agents engaged by NRT are potentially common law employees instead of independent contractors, and therefore may bring claims against NRT for breach of contract, wrongful discharge and negligent supervision and obtain benefits available to employees under various state statutes; (v) that NRT’s legal assistance program constitutes the illegal sale of insurance; (vi) concerning claims generally against the company-owned brokerage operations for negligence or breach of fiduciary duty in connection with the performance of real estate brokerage or other professional services; (vii) concerning claims generally against the title company contending that, as the escrow company, the company knew or should have known that a transaction was fraudulent and (viii) concerning claims for alleged RESPA violations.

With respect to the Cooper Litigation discussed above, the court granted plaintiffs’ renewed motion to certify a class on August 17, 2010. The complaint alleges breach of certain provisions of the Real Estate Franchise Agreement entered into between Century 21 and the plaintiffs, the implied duty of good faith and fair dealing, fraud and certain express and implied fiduciary duties. The complaint alleges, among other things, that Cendant diverted money and resources from Century 21 franchisees and allotted them to NRT owned brokerages. The certified class includes all Century 21 franchisees between August 1, 1995 and April 17, 2002 whose franchise agreements contain a New Jersey choice of law and a New Jersey choice of venue provision who have not executed releases discharging their claim (other than in the context of a renewal of their franchise agreement). On September 7, 2010, Century 21 filed a motion for leave to file an interlocutory appeal of the class certification order. On October 15, 2010, the Appellate Division of the New Jersey Court denied Cendant’s and Century 21’s motion for leave to file an interlocutory appeal of the class certification order. This case was originally filed in 2002, but with the recent class certification is now just entering the discovery phase. This class action involves substantial, complex litigation. While the Company will vigorously defend this case and believe the allegations are without merit, class action litigation is inherently unpredictable and subject to significant uncertainties. The resolution of this litigation could result in substantial losses to the Company and we cannot assure you that such resolution will not have a material adverse effect on our results of operations, financial condition or liquidity.

The foregoing cases are in addition to the former parent contingent liability matters under which Realogy and Wyndham are responsible for 62.5% and 37.5%, respectively, of any former parent liability. The former parent contingent liabilities include an estimate of attorneys’ fees payable to the plaintiffs under a nine-year old legacy Cendant litigation matter not related to real estate, CSI Investment et. al. vs. Cendant et. al. (“Credentials Litigation”). In September 2009, the plaintiffs filed a motion requesting an aggregate of $33 million in attorneys’ fees and costs, comprised of $6 million in hourly fees and costs, a $25 million success fee and $2 million in pre-judgment interest. In January 2010, the Court issued a summary order referring the matter to a Magistrate for a determination of the proper amount of attorneys’ fees. The Company believes the amount requested does not represent reasonable attorneys’ fees and has accrued a lesser amount.

The Company believes that it has adequately accrued for such legal matters as appropriate or, for matters not requiring accrual, believes that they will not have a material adverse effect on its results of operations, financial position or cash flows based on information currently available. However, litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits can be costly to defend and depending on the class size and claims could be costly to settle. Lastly, there may be greater risk of unfavorable resolutions in the current economic environment due to various factors including the absence of other defendants (due to business failures) that may be the real cause of the liability and greater negative sentiment toward corporate defendants. As such, the Company could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.

Tax Matters

The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and in recording the related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities whereby the outcome of the audits is uncertain.

Under the Tax Sharing Agreement with Cendant, Wyndham Worldwide and Travelport, the Company is generally responsible for 62.5% of tax liabilities that relate to income taxes imposed on Cendant and certain of its subsidiaries with respect to tax periods ending on or prior to December 31, 2006.

On July 15, 2010, Cendant and the IRS agreed to settle the previously disclosed IRS examination of Cendant’s taxable years 2003 through 2006. Pursuant to the IRS settlement, Tax Sharing Agreement and a letter agreement executed with Wyndham on July 15, 2010, Realogy agreed to pay a total of approximately $48 million, excluding estimated interest, to reimburse Cendant for a portion of the amount payable by Cendant to the IRS and Wyndham for certain tax credits used under the IRS settlement. In August 2010, Realogy paid $58 million, including interest, to Cendant and Wyndham.

At September 30, 2010, the due to former parent balance is comprised of the Company’s portion of the following: (i) Cendant’s remaining state and foreign contingent tax liabilities, (ii) accrued interest on contingent tax liabilities, (iii) potential liabilities related to Cendant’s terminated or divested businesses, and (iv) potential liabilities related to the residual portion of accruals for Cendant operations.

With respect to the residual legacy Cendant tax liabilities which remain after giving effect to the IRS settlement, the Company and its former parent believe there is appropriate support for the positions taken on Cendant’s tax returns. Similarly, with respect to Realogy tax liabilities, the Company believes there is appropriate support for positions taken on its own tax returns. The liabilities that have been recorded represent the best estimates of the probable loss on certain positions. The Company believes that the accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter; however, the outcome of tax audits are inherently uncertain. Such tax audits and any related litigation, including disputes or litigation on the allocation of tax liabilities between parties under the Tax Sharing Agreement, could result in outcomes for the Company that are different from those reflected in the Company’s historical financial statements.

Contingent Liability Letter of Credit

On April 26, 2007, the Company established a $500 million standby irrevocable letter of credit for the benefit of Avis Budget Group in accordance with the Separation and Distribution Agreement and a letter agreement among the Company, Wyndham Worldwide and Avis Budget Group relating thereto. The Company utilized its synthetic letter of credit to satisfy the obligations to post the standby irrevocable letter of credit. The standby irrevocable letter of credit supports the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities under the Separation and Distribution Agreement. The stated amount of the standby irrevocable letter of credit is subject to periodic adjustment to increase or decrease to reflect the then current estimate of Cendant contingent and other liabilities. On August 11, 2009, the letter of credit with Avis Budget Group was reduced from $500 million to $446 million primarily as a result of a reduction in contingent legal liabilities. In the third quarter of 2010, the Company entered into an agreement with Avis Budget Group and Wyndham to further reduce the letter of credit, primarily due to the IRS tax settlement described above and related payment of $58 million to satisfy the Company’s portion of such tax settlement. As a result of the tax settlement and other liability adjustments, the letter of credit was reduced from $446 million to $133 million as of September 30, 2010.

Apollo Management Fee Agreement

In connection with the Transactions, Apollo entered into a management fee agreement with the Company which allows Apollo and its affiliates to provide certain management consulting services to the Company through the end of 2016 (subject to possible extension). The agreement may be terminated at any time upon written notice to the Company from Apollo. The Company will pay Apollo an annual management fee for this service up to the sum of the greater of $15 million or 2.0% of the Company’s annual Adjusted EBITDA for the immediately preceding year, plus out of pocket costs and expenses in connection therewith. If Apollo elects to terminate the management fee agreement, as consideration for the termination of Apollo’s services under the agreement and any additional compensation to be received, the Company has agreed to pay to Apollo the net present value of the sum of the remaining payments due to Apollo and any payments deferred by Apollo.

In addition, in the absence of an express agreement to the contrary, at the closing of any merger, acquisition, financing and similar transaction with a related transaction or enterprise value equal to or greater than $200 million, Apollo will receive a fee equal to 1% of the aggregate transaction or enterprise value paid to or provided by such entity or its stockholders (including the aggregate value of (x) equity securities, warrants, rights and options acquired or retained, (y) indebtedness acquired, assumed or refinanced and (z) any other consideration or compensation paid in connection with such transaction). The Company will agree to indemnify Apollo and its affiliates and their directors, officers and representatives for potential losses relating to the services to be provided under the management fee agreement.

Escrow and Trust Deposits

As a service to the Company’s customers, it administers escrow and trust deposits which represent undisbursed amounts received for settlements of real estate transactions. With the passage of the Dodd-Frank Act in July 2010, deposits at FDIC-insured institutions are permanently covered up to $250,000. In addition, the Dodd-Frank Act temporarily provides unlimited coverage for noninterest-bearing transaction accounts from December 31, 2010 through December 31, 2012. These escrow and trust deposits totaled approximately $224 million and $161 million at September 30, 2010 and December 31, 2009, respectively. These escrow and trust deposits are not assets of the Company and, therefore, are excluded from the accompanying Condensed Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits.

11. SEGMENT INFORMATION

Presented below are the Company’s operating segments for which separate financial information is available and is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. Management evaluates the operating results of each of its segments based upon revenue and EBITDA, which is defined as net income (loss) before depreciation and amortization, interest (income) expense, net (other than Relocation Services interest for securitization assets and securitization obligations) and income taxes, each of which is presented in the Company’s Condensed Consolidated Statements of Operations. The Company’s presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.


	Revenues ^(a)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Real Estate Franchise Services	$	138		$	151		$	433		$	399
Company Owned Real Estate Brokerage Services		762			896			2,319			2,151
Relocation Services		122			92			304			243
Title and Settlement Services		84			91			235			247
Corporate and Other ^(b)		(54	)		(61	)		(167	)		(156	)

Total Company	$	1,052		$	1,169		$	3,124		$	2,884

(a)

Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of $54 million and $167 million for the three and nine months ended September 30, 2010, respectively, and $61 million and $156 million for the three and nine months ended September 30, 2009, respectively. Such amounts are eliminated through the Corporate and Other line. Revenues for the Relocation Services segment include $12 million and $29 million of intercompany referral and relocation fees paid by the Company Owned Real Estate Brokerage Services segment during the three and nine months ended September 30, 2010, respectively, and $11 million and $26 million during the three and nine months ended September 30, 2009, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material inter-segment transactions.

(b)	Includes the elimination of transactions between segments.


	EBITDA
	Three Months Ended September 30, ^(a)					Nine Months Ended September 30, ^(b)
	2010			2009		2010			2009
Real Estate Franchise Services	$	90		$	107	$	278		$	236
Company Owned Real Estate Brokerage Services		31			48		81			(12	)
Relocation Services		51			34		82			106
Title and Settlement Services		8			10		14			17
Corporate and Other ^(c)		(3	)		54		277			29

Total Company		177			253		732			376
Less:
Depreciation and amortization		49			48		148			147
Interest expense, net		151			139		458			430
Income tax expense		10			8		134			15

Net income (loss) attributable to Realogy	$	(33	)	$	58	$	(8	)	$	(216	)

(a)	Includes $2 million of restructuring costs offset by a net benefit of $6 million of former parent legacy items for the three months ended September 30, 2010, compared to $15 million of restructuring costs and $5 million of former parent legacy costs for the three months ended September 30, 2009.

(b)

Includes $12 million of restructuring costs offset by a net benefit of $315 million of former parent legacy items primarily as a result of tax and other liability adjustments for the nine months ended September 30, 2010, compared to $59 million of restructuring costs offset by a benefit of $37 million of former parent legacy items (comprised of a benefit of $55 million recorded at the Relocation Services segment related to WEX partially offset by $18 million of expenses recorded at Corporate) for the nine months ended September 30, 2009.

(c)	Includes a gain on the extinguishment of debt of $75 million for the three and nine months ended September 30, 2009.

12.

GUARANTOR/NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION

The following consolidating financial information presents the Condensed Consolidating Balance Sheets and Condensed Consolidating Statements of Operations and Cash Flows for: (i) Realogy Corporation (the “Parent”); (ii) the guarantor subsidiaries; (iii) the non-guarantor subsidiaries; (iv) elimination entries necessary to consolidate the Parent with the guarantor and non-guarantor subsidiaries; and (v) the Company on a consolidated basis. The guarantor subsidiaries are comprised of 100% owned entities, and guarantee on an unsecured senior subordinated basis the Senior Subordinated Notes and on an unsecured senior basis the Fixed Rate Senior Notes and Senior Toggle Notes. Guarantor and non-guarantor subsidiaries are 100% owned by the Parent, either directly or indirectly. All guarantees are full and unconditional and joint and several. Non-guarantor entities are comprised of securitization entities, foreign subsidiaries, unconsolidated entities, insurance underwriter subsidiaries and qualified foreign holding corporations. The guarantor and non-guarantor financial information is prepared using the same basis of accounting as the condensed consolidated financial statements except for the investments in consolidated subsidiaries which are accounted for using the equity method.

Condensed Consolidating Statement of Operations

Three Months Ended September 30, 2010

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross commission income	$	—		$	751		$	—		$	—		$	751
Service revenue		—			139			58			—			197
Franchise fees		—			67			—			—			67
Other		—			37			—			—			37

Net revenues		—			994			58			—			1,052
Expenses
Commission and other agent-related costs		—			490			—			—			490
Operating		—			279			36			—			315
Marketing		—			41			1			—			42
General and administrative		8			34			3			—			45
Former parent legacy costs (benefit), net		(6	)		—			—			—			(6	)
Restructuring costs		—			2			—			—			2
Depreciation and amortization		2			47			—			—			49
Interest expense/(income), net		149			2			—			—			151
Intercompany transactions		1			(1	)		—			—			—

Total expenses		154			894			40			—			1,088
Income (loss) before income taxes, equity in earnings and noncontrolling interests		(154	)		100			18			—			(36	)
Income tax expense (benefit)		(46	)		45			11			—			10
Equity in earnings of unconsolidated entities		—			—			(13	)		—			(13	)
Equity in (earnings) losses of subsidiaries		(75	)		(20	)		—			95			—

Net income (loss)		(33	)		75			20			(95	)		(33	)
Less: Net income attributable to noncontrolling interests		—			—			—			—			—

Net income (loss) attributable to Realogy	$	(33	)	$	75		$	20		$	(95	)	$	(33	)

Condensed Consolidating Statement of Operations

Three Months Ended September 30, 2009

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross commission income	$	—		$	877		$	1		$	—		$	878
Service revenue		—			123			51			—			174
Franchise fees		—			79			—			—			79
Other		—			36			2			—			38

Net revenues		—			1,115			54			—			1,169
Expenses
Commission and other agent-related costs		—			567			—			—			567
Operating		—			275			34			—			309
Marketing		—			38			—			—			38
General and administrative		17			44			2			—			63
Former parent legacy costs (benefit), net		5			—			—			—			5
Restructuring costs		—			15			—			—			15
Depreciation and amortization		2			46			—			—			48
Interest expense/(income), net		139			—			—			—			139
Gain on extinguishment of debt		(75	)		—			—			—			(75	)
Other (income)/expense, net		(1	)		—			—			—			(1	)
Intercompany transactions		1			(1	)		—			—			—

Total expenses		88			984			36			—			1,108
Income (loss) before income taxes, equity in earnings and noncontrolling interests		(88	)		131			18			—			61
Income tax expense (benefit)		(50	)		51			7			—			8
Equity in earnings of unconsolidated entities		—			—			(6	)		—			(6	)
Equity in (earnings) losses of subsidiaries		(96	)		(16	)		—			112			—

Net income (loss)		58			96			17			(112	)		59
Less: Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)

Net income (loss) attributable to Realogy	$	58		$	96		$	16		$	(112	)	$	58

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2010

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross commission income	$	—		$	2,280		$	—		$	—		$	2,280
Service revenue		—			367			151			—			518
Franchise fees		—			203			—			—			203
Other		—			121			2			—			123

Net revenues		—			2,971			153			—			3,124
Expenses
Commission and other agent-related costs		—			1,479			—			—			1,479
Operating		—			818			107			—			925
Marketing		—			136			2			—			138
General and administrative		38			134			8			—			180
Former parent legacy costs (benefit), net		(315	)		—			—			—			(315	)
Restructuring costs		—			12			—			—			12
Depreciation and amortization		6			141			1			—			148
Interest expense/(income), net		453			5			—			—			458
Other (income)/expense, net		(1	)		(5	)		—			—			(6	)
Intercompany transactions		4			(4	)		—			—			—

Total expenses		185			2,716			118			—			3,019
Income (loss) before income taxes, equity in earnings and noncontrolling interests		(185	)		255			35			—			105
Income tax expense (benefit)		(208	)		321			21			—			134
Equity in earnings of unconsolidated entities		—			—			(22	)		—			(22	)
Equity in (earnings) losses of subsidiaries		31			(35	)		—			4			—

Net income (loss)		(8	)		(31	)		36			(4	)		(7	)
Less: Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)

Net income (loss) attributable to Realogy	$	(8	)	$	(31	)	$	35		$	(4	)	$	(8	)

Condensed Consolidating Statement of Operations

Nine Months Ended September 30, 2009

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross commission income	$	—		$	2,095		$	1		$	—		$	2,096
Service revenue		—			332			137			—			469
Franchise fees		—			201			—			—			201
Other		—			114			4			—			118

Net revenues		—			2,742			142			—			2,884
Expenses
Commission and other agent-related costs		—			1,336			—			—			1,336
Operating		1			856			93			—			950
Marketing		—			122			2			—			124
General and administrative		36			137			6			—			179
Former parent legacy costs (benefit), net		18			(55	)		—			—			(37	)
Restructuring costs		3			56			—			—			59
Depreciation and amortization		7			139			1			—			147
Interest expense/(income), net		429			1			—			—			430
Gain on extinguishment of debt		(75	)		—			—			—			(75	)
Other (income)/expense, net		(12	)		—			1			—			(11	)
Intercompany transactions		4			(4	)		—			—			—

Total expenses		411			2,588			103			—			3,102
Income (loss) before income taxes, equity in earnings and noncontrolling interests		(411	)		154			39			—			(218	)
Income tax expense (benefit)		(76	)		71			20			—			15
Equity in (earnings) losses of unconsolidated entities		—			—			(18	)		—			(18	)
Equity in (earnings) losses of subsidiaries		(119	)		(36	)		—			155			—

Net income (loss)		(216	)		119			37			(155	)		(215	)
Less: Net income attributable to noncontrolling interests		—			—			(1	)		—			(1	)

Net income (loss) attributable to Realogy	$	(216	)	$	119		$	36		$	(155	)	$	(216	)

Condensed Consolidating Balance Sheet

As of September 30, 2010

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	144		$	49		$	47	$	(5	)	$	235
Trade receivables, net		—			108			32		—			140
Relocation receivables		—			31			406		—			437
Relocation properties held for sale		—			28			—		—			28
Deferred income taxes		17			54			—		—			71
Intercompany note receivable		—			21			19		(40	)		—
Other current assets		12			63			27		—			102

Total current assets		173			354			531		(45	)		1,013
Property and equipment, net		21			160			4		—			185
Goodwill		—			2,591			—		—			2,591
Trademarks		—			732			—		—			732
Franchise agreements, net		—			2,925			—		—			2.925
Other intangibles, net		—			488			—		—			488
Other non-current assets		84			80			64		—			228
Investment in subsidiaries		7,991			130			—		(8,121	)		—

Total assets	$	8,269		$	7,460		$	599	$	(8,166	)	$	8,162

Liabilities and Equity (Deficit)
Current liabilities:
Accounts payable	$	8		$	155		$	10	$	(5	)	$	168
Securitization obligations		—			—			338		—			338
Intercompany note payable		—			19			21		(40	)		—
Due to former parent		117			—			—		—			117
Revolving credit facilities and current portion of long-term debt		107			55			8		—			170
Accrued expenses and other current liabilities		246			352			33		—			631
Intercompany payables		1,906			(1,949	)		43		—			—

Total current liabilities		2,384			(1,368	)		453		(45	)		1,424
Long-term debt		6,678			—			—		—			6,678
Deferred income taxes		(620	)		1,495			—		—			875
Other non-current liabilities		87			63			16		—			166
Intercompany liabilities		721			(721	)		—		—			—

Total liabilities		9,250			(531	)		469		(45	)		9,143

Total equity (deficit)		(981	)		7,991			130		(8,121	)		(981	)

Total liabilities and equity (deficit)	$	8,269		$	7,460		$	599	$	(8,166	)	$	8,162

Condensed Consolidating Balance Sheet

As of December 31, 2009

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	194		$	24		$	42	$	(5	)	$	255
Trade receivables, net		—			77			25		—			102
Relocation receivables		—			(20	)		354		—			334
Deferred income taxes		31			54			—		—			85
Intercompany note receivable		—			13			18		(31	)		—
Other current assets		12			66			20		—			98

Total current assets		237			214			459		(36	)		874
Property and equipment, net		23			184			4		—			211
Goodwill		—			2,577			—		—			2,577
Trademarks		—			732			—		—			732
Franchise agreements, net		—			2,976			—		—			2,976
Other intangibles, net		—			453			—		—			453
Other non-current assets		93			76			49		—			218
Investment in subsidiaries		8,022			116			—		(8,138	)		—

Total assets	$	8,375		$	7,328		$	512	$	(8,174	)	$	8,041

Liabilities and Equity (Deficit)
Current liabilities:
Accounts payable	$	11		$	82		$	8	$	(5	)	$	96
Securitization obligations		—			—			305		—			305
Intercompany note payable		—			18			13		(31	)		—
Due to former parent		505			—			—		—			505
Current portion of long-term debt		32			—			—		—			32
Accrued expenses and other current liabilities		180			295			27		—			502
Intercompany payables		1,712			(1,740	)		28		—			—

Total current liabilities		2,440			(1,345	)		381		(36	)		1,440
Long-term debt		6,674			—			—		—			6,674
Deferred income taxes		(557	)		1,317			—		—			760
Other non-current liabilities		82			51			15		—			148
Intercompany liabilities		717			(717	)		—		—			—

Total liabilities		9,356			(694	)		396		(36	)		9,022

Total equity (deficit)		(981	)		8,022			116		(8,138	)		(981	)

Total liabilities and equity (deficit)	$	8,375		$	7,328		$	512	$	(8,174	)	$	8,041

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2010

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(449	)	$	370		$	(17	)	$	(6	)	$	(102	)

Investing activities
Property and equipment additions		(4	)		(28	)		(1	)		—			(33	)
Net assets acquired (net of cash acquired) and acquisition-related payments		—			(2	)		—			—			(2	)
Net proceeds from sale of assets		—			5			—			—			5
Purchase of certificates of deposit		—			—			(10	)		—			(10	)
Change in restricted cash		—			—			4			—			4
Intercompany note receivable		—			(8	)		—			8			—

Net cash provided by (used in) investing activities		(4	)		(33	)		(7	)		8			(36	)
Financing activities
Net change in revolving credit facility		75			35			7			—			117
Repayments made for term loan facility		(24	)		—			—			—			(24	)
Net change in securitization obligations		—			—			34			—			34
Intercompany dividend		—			—			(6	)		6			—
Intercompany note payable		—			—			8			(8	)		—
Intercompany transactions		353			(341	)		(12	)		—			—
Other, net		(1	)		(6	)		(2	)		—			(9	)

Net cash provided by (used in) financing activities		403			(312	)		29			(2	)		118

Net (decrease) increase in cash and cash equivalents		(50	)		25			5			—			(20	)
Cash and cash equivalents, beginning of period		194			24			42			(5	)		255

Cash and cash equivalents, end of period	$	144		$	49		$	47		$	(5	)	$	235

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2009

(In millions)


	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(402	)	$	174		$	564		$	(32	)	$	304
Investing activities
Property and equipment additions		(2	)		(21	)		—			—			(23	)
Net assets acquired (net of cash acquired) and acquisition-related payments		—			(5	)		—			—			(5	)
Change in restricted cash		—			—			4			—			4
Intercompany dividend		—			63			—			(63	)		—
Intercompany note receivable		—			50			—			(50	)		—

Net cash provided by (used in) investing activities		(2	)		87			4			(113	)		(24	)

Financing activities
Net change in revolving credit facility		(515	)		—			—			—			(515	)
Proceeds from issuance of Second Lien Loans		365			—			—			—			365
Repayments made for term loan facility		(24	)		—			—			—			(24	)
Net change in securitization obligations		—			—			(336	)		—			(336	)
Debt issuance costs		(8	)		—			—			—			(8	)
Intercompany dividend		—			—			(93	)		93			—
Intercompany note payable		—			—			(50	)		50			—
Intercompany transactions		346			(261	)		(85	)		—			—
Other, net		(1	)		(7	)		(2	)		—			(10	)

Net cash provided by (used in) financing activities		163			(268	)		(566	)		143			(528	)

Effect of changes in exchange rates on cash and cash equivalents		—			—			3			—			3

Net (decrease) increase in cash and cash equivalents		(241	)		(7	)		5			(2	)		(245	)
Cash and cash equivalents, beginning of period		378			26			36			(3	)		437

Cash and cash equivalents, end of period	$	137		$	19		$	41		$	(5	)	$	192

13.

SUBSEQUENT EVENTS

Stock Option Exchange

On October 8, 2010, the Company initiated an offer to exchange certain stock options granted to employees for new stock options. Each existing option will be exchanged on a one-for-one basis with a new option. The existing options were 50% time vested (Tranche A) and 50% performance based awards (Tranche B & C). The existing options will be exchanged for all time vested awards. The new options are unvested on the date of grant and vest at a rate of 25% a year over a four-year period beginning July 1, 2010. On November 9, 2010, 10.16 million of existing options were tendered and exchanged for an equal number of new options. After giving effect to the exchange offer, 5.09 million of the previously existing options remain outstanding (including 5.05 million of the previously issued options held by non-employees who were not eligible to participate in the exchange offer). The Company will expense the remaining unrecognized stock compensation expense of $10 million related to the existing stock options over the remaining two years. The Company has determined that the incremental stock compensation expense of $4 million resulting from the exchange offer will be recognized over the four-year vesting period.

Employee Retention Plan

Given current economic conditions, including the decline in actual and pending home sales in the second half of 2010 and the uncertainty created by the foreclosure review by both banking institutions and regulatory agencies, the Company sought to ensure retention of its key employees by creating a two year retention plan that would guarantee certain payments to key employees during 2011 and 2012. On November 4, 2010, the Compensation Committee approved this plan. The Compensation Committee also terminated the Company’s management incentive plan for 2010.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes included elsewhere herein and with our Consolidated and Combined Financial Statements and accompanying Notes included in the 2009 Form 10-K. Unless otherwise noted, all dollar amounts in tables are in millions. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Forward-Looking Statements” in this report and “Forward-Looking Statements” and “Risk Factors” in our 2009 Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those contained in any forward-looking statements.

Except as otherwise indicated or unless the context otherwise requires, the terms “Realogy Corporation,” “Realogy,” “we,” “us,” “our,” “our company” and the “Company” refer to Realogy Corporation and its consolidated subsidiaries.

OVERVIEW

We are a global provider of real estate and relocation services and report our operations in the following four segments:

•

Real Estate Franchise Services (known as Realogy Franchise Group or RFG)—franchises the Century 21 ^® , Coldwell Banker ^® , ERA ^® , Sotheby’s International Realty ^® , Coldwell Banker Commercial ^® and Better Homes and Gardens ^® Real Estate brand names. As of September 30, 2010, we had approximately 14,700 franchised and company owned offices and 267,000 sales associates operating under our brands in the U.S. and 99 other countries and territories around the world, which included approximately 740 of our company owned and operated brokerage offices with approximately 44,400 sales associates.

•

Company Owned Real Estate Brokerage Services (known as NRT)—operates a full-service real estate brokerage business principally under the Coldwell Banker ^® , ERA ^® , Corcoran Group ^® and Sotheby’s International Realty ^® brand names. In addition, we operate a large independent real estate owned (“REO”) residential asset manager, which focuses on bank-owned properties.

•

Relocation Services (known as Cartus)—primarily offers clients employee relocation services such as homesale assistance, home finding and other destination services, expense processing, relocation policy counseling and other consulting services, arranging household goods moving services, visa and immigration support, intercultural and language training, and group move management services.

•

Title and Settlement Services (known as Title Resource Group or TRG)—provides full-service title, settlement and vendor management services to real estate companies, affinity groups, corporations and financial institutions with many of these services provided in connection with the Company’s real estate brokerage and relocation services business.

We were incorporated on January 27, 2006 to facilitate a plan by Cendant to separate Cendant into four independent companies—one for each of Cendant’s real estate services, travel distribution services, hospitality services (including timeshare resorts), and vehicle rental businesses. On July 31, 2006, the separation became effective.

In December 2006, the Company entered into an agreement and plan of merger (the “Merger”) with Domus Holdings Corp. (“Holdings”) and Domus Acquisition Corp., which are affiliates of Apollo Management VI, L.P., an entity affiliated with Apollo Management, L.P. (“Apollo”). The Merger was consummated on April 10, 2007. As a result of the Merger, Realogy became an indirect wholly-owned subsidiary of Holdings. We incurred substantial indebtedness as a result of the Merger. Our high leverage imposes various significant burdens and obligations on the Company.

As discussed under the heading “Industry Trends,” the domestic residential real estate market has been in a significant and lengthy downturn. As a result, our results of operations have been, and may continue to be, materially adversely affected.

Industry Trends

Our businesses compete primarily in the domestic residential real estate market. This market is cyclical in nature and although it has shown strong growth from 1972 to 2005, it has been in a significant and prolonged downturn since the second half of 2005. Since the onset of the recession in the U.S. economy in December 2007, the housing market has been impacted by consumer sentiment about the overall state of the economy, particularly consumer anxiety over weak economic growth and high unemployment. The deteriorating conditions in the job market, stock market and consumer confidence in the fourth quarter of 2008 caused a further decrease in homesale transactions through the first half of 2009 and more downward pressure on homesale prices for the full year. Based upon data published by NAR from 2005 to 2009, the number of annual U.S. existing homesale units declined by 27% and the median price declined by 21%. As more fully described in the 2009 Form 10-K and the June 30, 2010 Form 10-Q, the federal homebuyer tax credits have helped to stimulate housing activity during the second half of 2009 and the first half of 2010. During the first half of 2010, the housing market showed signs of stabilization; however, the second half of 2010 is expected to be weak compared to the second half of 2009 and there remains substantial uncertainty with respect to the timing and scope of a housing recovery.

Interest rates continue to be at historically low levels, which we believe has helped stimulate demand in the residential real estate market, thereby reducing the rate of sales volume decline. According to Freddie Mac, interest rates on commitments for fixed-rate first mortgages have decreased from an annual average of 6.0% in 2008 to 4.35% as of September 2010. Offsetting some of the favorable impact of lower interest rates are conservative mortgage underwriting standards and limited equity in homes in certain markets.

During the second half of 2009, homesale transactions increased on a year-over-year basis due in part to modest economic growth, an improvement in the stock market from its March 2009 lows, gradually improving consumer confidence (though it remained at relatively low levels) and the effect of government stimulus including the homebuyer tax credit and monetary policies. The increase in homesale transactions continued in the first half of 2010 and was positively impacted by the extension of the federal homebuyer tax credit, historically low mortgage rates and a high housing affordability index. Since April 30, 2010 (the date by which qualified buyers were required to have signed contracts to be eligible for the 2010 federal homebuyer tax credit), we have seen a substantial decrease in consumer buying activity, particularly in the low and moderate price ranges. We believe this was due to the pull-forward of activity from the third quarter of 2010 into the second quarter and continuing economic uncertainty, high unemployment and low levels of consumer confidence.

According to NAR, the inventory of existing homes for sale is 4.0 million homes at September 2010 compared to 3.3 million homes at December 2009. The September 2010 inventory level represents a seasonally adjusted 10.7 months supply. The supply remains higher than the historical average and could increase due to the release of homes for sale by financial institutions. These factors could continue to add downward pressure on the price of existing homesales.

Recently, banks and other lenders have drawn criticism from federal and state officials regarding the lack of diligence exercised by these lending institutions in connection with the sales of foreclosed homes. The criticism has included electronic certifications by bank officials presented in connection with the sale process, which may not have been supported by actual verification of records as well as allegations that servicers had improper authority to foreclose on particular properties. As a result, banks and other lenders are performing additional due diligence on foreclosure documentation which could increase the amount of time incurred to complete a foreclosure. Additionally, title insurers are taking more time to examine documents, which can delay the foreclosure process. These foreclosure developments could reduce the level of homesales and could, once these homes reemerge on the market, add additional downward pressure on the price of existing homesales.

We believe that long-term demand for housing and the growth of our industry is primarily driven by affordability, the economic health of the domestic economy, positive demographic trends such as population growth, increasing household formation, interest rate trends and locally based dynamics such as housing demand relative to housing supply. During the first half of 2010, the housing market showed signs of stabilization; however, the second half of 2010 is expected to be weak compared to the second half of 2009 and there remains substantial uncertainty with respect to the timing and scope of a housing recovery. Factors that may negatively affect a housing recovery include:

•

higher mortgage rates;

•

lower unit sales, in the absence of the federal homebuyer tax credit and the current uncertainty with respect to foreclosures;

•

lower average homesale price, particularly if banks and other mortgage servicers liquidate foreclosed properties that they are currently holding;

•

continuing high levels of unemployment;

•

unsustainable economic recovery in the U.S. or, if sustained, a recovery resulting in only modest economic growth; and

•

a lack of stability or improvement in home ownership levels in the U.S.

Consequently, we cannot predict when the residential real estate industry will return to a period of stabilization and sustainable growth. Moreover, if the residential real estate market or the economy as a whole does not improve, we may experience further adverse effects on our business, financial condition and liquidity, including our ability to access capital.

Many of the trends impacting our businesses that derive revenue from homesales also impact our Relocation Services business, which is a global provider of outsourced employee relocation services. In addition to general residential housing trends, key drivers of our Relocation Services business are corporate spending and employment trends which have shown signs of stabilization in 2010; however, there can be no assurance that corporate spending on relocation services will return to previous levels following any economic recovery.

Homesales

Existing homesale transactions declined from 2006 through the first half of 2009 but a positive trend began in the second half of 2009. In the third quarter of 2009, homesale activity was equal to or exceeded the prior year’s activity albeit at a lower average selling price. In the fourth quarter of 2009 and the first half of 2010, homesale transactions improved meaningfully due to more favorable economic conditions and the federal homebuyer tax credit which positively impacted the number of transactions in many markets nationwide. We believe the third quarter of 2010 was challenged by the pull-forward of sales into the second quarter of 2010 due to the expiration of the 2010 tax credit as well as the continued weak economic conditions and high unemployment. NAR and Fannie Mae are forecasting that homesale transactions in the fourth quarter of 2010 will continue to decline compared to the prior year fourth quarter as a result of the lapse of the 2010 federal homebuyer tax credit and due to increased transaction volume in late 2009 due to the 2009 federal homebuyer tax credit program. 2010 has proven to be a very challenging year to forecast the number of homesale transactions. For example, in August 2010 NAR forecasted that homesale transactions for the fourth quarter of 2010 would decrease 12%, but by its November 2010 forecast, NAR lowered the fourth quarter forecast to be down 25%.


	2010 vs. 2009
	Full Year Forecast			Fourth Quarter Forecast			Third Quarter			Second Quarter			First Quarter			2009 vs. 2008 Full Year			2008 vs. 2007 Full Year
Number of Homesales
*Industry*
NAR ^(a)		(7	%)		(25	%)		(21	%)		17	%		11	%		5	%		(13	%)
Fannie Mae ^(a)		(7	%)		(27	%)		(23	%)		17	%		11	%		5	%		(13	%)
*Realogy*
Real Estate Franchise Services								(19	%)		11	%		8	%		(1	%)		(18	%)
Company Owned Real Estate Brokerage Services								(25	%)		16	%		11	%		—	%		(16	%)

(a)	Existing homesale data is as of November 2010 for NAR and October 2010 for Fannie Mae. Fannie Mae typically adjusts their historical periods in subsequent monthly releases to match the NAR homesale data numbers.

According to NAR, annual existing homesale transactions were 4.9 million in 2008 and 5.2 million in 2009. As of November 2010, NAR estimates that existing homesale transactions will decrease 7% in 2010 to 4.8 million units. Results for the Company were consistent with NAR’s reported industry trend as our homesale sides activity improved in the first and second quarter then declined in the third quarter of 2010.

The table below shows NAR’s estimate of seasonally adjusted annualized unit homesales for the months of April 2010 through September 2010. As noted below, seasonally adjusted annualized units homesales dropped 27% from June to July, which we believe was based on the pull-forward of activity from the third quarter of 2010 to the second quarter of 2010 as a result of the federal homebuyer tax credit. However, the annualized unit sale number increased 7% from July to August and 10% from August through September.


	Seasonally Adjusted Annualized Unit Homesales		Sequential Month over Month Change
April 2010		5,790,000		8%
May 2010		5,660,000		(2%	)
June 2010		5,260,000		(7%	)
July 2010		3,840,000		(27%	)
August 2010		4,120,000		7%
September 2010		4,530,000		10%

As of November 2010, NAR is forecasting a 6% increase in homesale transaction activity from 4.8 million homes for 2010 to 5.1 million homes for 2011. Fannie Mae’s forecast as of October 2010 shows a 2% increase in homesale transaction activity from 4.8 million homes for 2010 to 4.9 million homes for 2011.

Homesale Price

Based upon information published by NAR, the national median price of existing homes sold continued to decline in 2008 and 2009. In 2009, the decrease in average homesale price for the Company Owned Real Estate Brokerage Services segment was impacted by a higher level of REO and short sale activity as well as a meaningful shift in the mix and volume of its overall homesale activity from higher price points to lower price points. In the first nine months of 2010, the percentage increase in the average price of homes brokered by our franchisees and company owned offices significantly outperformed the percentage change in median home price reported by NAR, due to the geographic areas they serve as well as a greater impact from increased activity in the mid and higher price point areas and less REO activity compared to the prior year comparable quarters.


	2010 vs. 2009
	Full Year Forecast			Fourth Quarter Forecast			Third Quarter			Second Quarter			First Quarter			2009 vs. 2008 Full Year			2008 vs. 2007 Full Year
Price of Homes
*Industry*
NAR ^(a)		—	%		(2	%)		(1	%)		1	%		(1	%)		(13	%)		(10	%)
Fannie Mae ^(a)		(1	%)		(2	%)		(1	%)		1	%		(1	%)		(13	%)		(10	%)
*Realogy*
Real Estate Franchise Services								4	%		5	%		3	%		(11	%)		(7	%)
Company Owned Real Estate Brokerage Services								12	%		12	%		17	%		(18	%)		(10	%)

(a)	Existing homesale price data is for median price and is as of November 2010 for NAR and October 2010 for Fannie Mae. Fannie Mae typically adjusts their historical periods in subsequent monthly releases to match the NAR homesale price data numbers.

With respect to homesale prices, NAR as of November 2010 is forecasting a 1% increase in median homesale prices for 2011 compared to 2010. However, Fannie Mae’s forecast as of October 2010 reflects prices decreasing 2% in 2011 compared to 2010.

***

While NAR and Fannie Mae are two indicators of the direction of the residential housing market, we believe that homesale statistics will continue to vary between us and NAR and Fannie Mae because they use survey data in their historical reports and forecasting models whereas we report based on actual results. In addition to the differences in calculation methodologies, there are geographical differences and concentrations in the markets in which we operate versus the national market. For instance, comparability is impaired due to NAR’s utilization of seasonally adjusted annualized rates whereas we report actual period over period changes and their use of median price for their forecasts compared to our average price.

Housing Affordability Index

According to NAR, the housing affordability index has continued to improve as a result of the homesale price declines which began in 2007. An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a twenty percent down payment. The housing affordability index was 115 in 2007, 138 in 2008 and 169 in 2009. The September 2010 index of 179 remains high and could favorably impact a housing recovery.

Other Factors

During the downturn in the residential real estate market, certain of our franchisees have experienced operating difficulties. As a result, many of our franchisees with multiple offices have reduced overhead and consolidated offices in an attempt to remain competitive in the marketplace. In addition, we have had to terminate franchisees due to non-reporting and non-payment which could adversely impact reported transaction volumes in the future. Due to the factors noted above, we significantly increased our bad debt and note reserves over the past several years and continue to actively monitor the collectability of receivables and notes from our franchisees.

The real estate industry generally benefits from rising home prices and increased volume of homesales and conversely is harmed by falling prices and falling volume of homesales. The housing industry is also affected by mortgage rate volatility as well as strict mortgage underwriting criteria which may limit certain customers’ ability to qualify for a mortgage. Typically, if mortgage rates fall or remain low, the number of homesale

transactions increase as homeowners choose to move or renters decide to purchase a home because financing appears affordable. If inflation becomes more prevalent and mortgage rates rise, the number of homesale transactions may decrease as potential home sellers choose to stay with their current mortgage and potential home buyers choose to rent rather than pay these higher mortgage rates.

Key Drivers of Our Businesses

Within our Real Estate Franchise Services segment and our Company Owned Real Estate Brokerage Services segment, we measure operating performance using the following key operating statistics: (i) closed homesale sides, which represents either the “buy” side or the “sell” side of a homesale transaction, (ii) average homesale price, which represents the average selling price of closed homesale transactions and (iii) average homesale broker commission rate, which represents the average commission rate earned on either the “buy” side or “sell” side of a homesale transaction. Our Real Estate Franchise Services segment is also impacted by the net effective royalty rate which represents the average percentage of our franchisees’ commission revenues payable to our Real Estate Franchise Services segment, net of volume incentives achieved. The net effective royalty rate does not include the effect of non-standard incentives granted to some franchisees.

Prior to 2006, the average homesale broker commission rate was declining several basis points per year, the effect of which was more than offset by increases in homesale prices. From 2007 through September 2010, the average broker commission rate remained fairly stable; however, we expect that, over the long term, the modestly declining trend in average brokerage commission rates will continue.

Our Company Owned Real Estate Brokerage Services segment has a significant concentration of real estate brokerage offices and transactions in geographic regions where home prices are at the higher end of the U.S. real estate market, particularly the east and west coasts, while our Real Estate Franchise Services segment has franchised offices that are more widely dispersed across the United States. Accordingly, operating results and homesale statistics may differ between our Company Owned Real Estate Brokerage Services segment and our Real Estate Franchise Services segment based upon geographic presence and the corresponding homesale activity in each geographic region.

Within our Relocation Services segment, we measure operating performance using the following key operating statistics: (i) initiations, which represent the total number of transferees we serve and (ii) referrals, which represent the number of referrals from which we earn revenue from real estate brokers. In our Title and Settlement Services segment, operating performance is evaluated using the following key metrics: (i) purchase title and closing units, which represent the number of title and closing units we process as a result of home purchases, (ii) refinance title and closing units, which represent the number of title and closing units we process as a result of homeowners refinancing their home loans, and (iii) average price per closing unit, which represents the average fee we earn on purchase title and refinancing title sides.

The decline in the number of homesale transactions and the decline in homesale prices has and could continue to adversely affect our results of operations by reducing the royalties we receive from our franchisees and company owned brokerages, reducing the commissions our company owned brokerage operations earn, reducing the demand for our title and settlement services, and reducing the referral fees we earn in our relocation services business. Our results could also be negatively affected by a decline in commission rates charged by brokers.

The following table presents our drivers for the three and nine months ended September 30, 2010 and 2009. See “Results of Operations” for a discussion as to how the key drivers affected our business for the periods presented.


	Three Months Ended September 30,									Nine Months Ended September 30,
	2010			2009			% Change			2010			2009			% Change
Real Estate Franchise Services ^(a)
Closed homesale sides		229,241			281,973			(19%	)		711,061			719,682			(1%	)
Average homesale price	$	202,272		$	194,881			4%		$	196,641		$	189,600			4%
Average homesale broker commission rate		2.53	%		2.53	%		—			2.54	%		2.55	%		(1	) bps
Net effective royalty rate		4.95	%		5.11	%		(16	) bps		5.01	%		5.12	%		(11	) bps
Royalty per side	$	267		$	260			3%		$	261		$	257			2%

Company Owned Real Estate Brokerage Services
Closed homesale sides		61,092			81,025			(25%	)		197,207			200,886			(2%	)
Average homesale price	$	457,782		$	407,398			12%		$	432,996		$	384,930			12%
Average homesale broker commission rate		2.47	%		2.49	%		(2	) bps		2.48	%		2.51	%		(3	) bps
Gross commission income per side	$	12,209		$	10,816			13%		$	11,522		$	10,413			11%

Relocation Services
Initiations ^(b)		36,743			28,326			30%			115,361			89,077			30%
Referrals ^(c)		19,625			20,320			(3%	)		53,504			48,388			11%

Title and Settlement Services
Purchase title and closing units		22,963			30,653			(25%	)		73,042			77,612			(6%	)
Refinance title and closing units		17,546			14,493			21%			39,860			57,119			(30%	)
Average price per closing unit	$	1,381		$	1,405			(2%	)	$	1,406		$	1,293			9%

(a)	Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment.

(b)	Includes initiations of 6,516 and 19,305 for the three and nine months ended September 30, 2010, respectively, related to the Primacy acquisition in 2010.

(c)	Includes referrals of 1,513 and 3,756 for the three and nine months ended September 30, 2010, respectively, related to the Primacy acquisition in 2010.

RESULTS OF OPERATIONS

Discussed below are our condensed consolidated results of operations and the results of operations for each of our reportable segments. The reportable segments presented below represent our operating segments for which separate financial information is available and which is utilized on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon revenue and EBITDA. Our presentation of EBITDA may not be comparable to similarly-titled measures used by other companies. As discussed above under “Industry Trends,” our results of operations are significantly impacted by industry and economic factors that are beyond our control.

Three Months Ended September 30, 2010 vs. Three Months Ended September 30, 2009

Our consolidated results comprised the following:


	Three Months Ended September 30,
	2010			2009			Change
Net revenues	$	1,052		$	1,169		$	(117	)
Total expenses ⁽¹⁾		1,088			1,108			(20	)

Income (loss) before income taxes, equity in earnings and noncontrolling interests		(36	)		61			(97	)
Income tax expense		10			8			2
Equity in earnings of unconsolidated entities		(13	)		(6	)		(7	)

Net income (loss)		(33	)		59			(92	)
Less: Net income attributable to noncontrolling interests		—			(1	)		1

Net income (loss) attributable to Realogy	$	(33	)	$	58		$	(91	)

(1)

Total expenses for the three months ended September 30, 2010 include $2 million of restructuring costs, offset by a net benefit of $6 million of former parent legacy items. Total expenses for the three months ended September 30, 2009 include $15 million of restructuring costs and $5 million of former parent legacy costs offset by a gain on extinguishment of debt of $75 million.

Net revenues decreased $117 million (10%) for the third quarter of 2010 compared with the third quarter of 2009 due primarily to decreases in the number of homesale transactions, partially offset by the impact of the Primacy acquisition and increases in international relocation activity.

Total expenses decreased $20 million (2%) primarily due to a $77 million decrease in commission expenses paid to real estate agents due to a decrease in gross commission income, a $12 million decrease in operating and general and administrative expenses primarily related to a reduction in employee related costs and a $13 million decrease in restructuring expense compared to the same period in 2009, offset by the absence of a $75 million gain on the extinguishment of debt included in expenses in the third quarter of 2009 and an increase of $12 million in interest expense.

Our income tax expense for the three months ended September 30, 2010 was $10 million and was comprised of the following:

•

no additional U.S. Federal income tax benefit was recognized for the current period due to the recognition of a full valuation allowance for domestic operations;

•

$7 million of income tax expense was recorded for an increase in deferred tax liabilities associated with indefinite-lived intangible assets; and

•

$3 million of income tax expense was recognized primarily for foreign and state income taxes for certain jurisdictions.

Following is a more detailed discussion of the results of each of our reportable segments during the three months ended September 30:


	Revenues									EBITDA ^(b)								Margin
	2010			2009			% Change			2010			2009		% Change			2010			2009			Change
Real Estate Franchise Services	$	138		$	151			(9	%)	$	90		$	107		(16	%)		65	%		71	%		(6	)
Company Owned Real Estate
Brokerage Services		762			896			(15	)		31			48		(35	)		4			5			(1	)
Relocation Services		122			92			33			51			34		50			42			37			5
Title and Settlement Services		84			91			(8	)		8			10		(20	)		10			11			(1	)
Corporate and Other ^(a) (c)		(54	)		(61	)		*			(3	)		54		*

Total Company	$	1,052		$	1,169			(10	%)	$	177		$	253		(30	%)		17	%		22	%		(5	)

Less: Depreciation and amortization											49			48
Interest expense, net											151			139
Income tax expense											10			8

Net income (loss) attributable to Realogy										$	(33	)	$	58

(*)	not meaningful

(a)

Includes unallocated corporate overhead and the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by our Company Owned Real Estate Brokerage Services segment of $54 million and $61 million during the three months ended September 30, 2010 and 2009, respectively.

(b)

EBITDA for the three months ended September 30, 2010 includes $2 million of restructuring costs offset by a net benefit of $6 million of former parent legacy items. EBITDA for the three months ended September 30, 2009 includes $15 million of restructuring costs and $5 million of former parent legacy costs.

(c)	EBITDA includes a gain on the extinguishment of debt of $75 million for the three months ended September 30, 2009.

As described in the aforementioned table, EBITDA margin for “Total Company” expressed as a percentage of revenues decreased 5 percentage points for the three months ended September 30, 2010 compared to the same period in 2009 primarily due to decreased operating results for most of our operating segments.

On a segment basis, the Real Estate Franchise Services segment margin decreased 6 percentage points to 65% from 71% in the prior period. The three months ended September 30, 2010 reflected a decrease in homesale transactions. The Company Owned Real Estate Brokerage Services segment margin decreased 1 percentage point to 4% from 5% in the comparable prior period. The three months ended September 30, 2010 reflected a decrease in the number of homesale transactions partially offset by lower operating expenses primarily as a result of restructuring and cost-saving activities. The Relocation Services segment margin increased 5 percentage points to 42% from 37% in the comparable prior period primarily due to lower employee related expenses. The Title and Settlement Services segment margin decreased 1 percentage point to 10% from 11% in the prior period due to a decrease in homesale transaction revenue compared to the third quarter of 2009.

Corporate and Other EBITDA for the three months ended September 30, 2010 decreased $57 million to negative $3 million. The decrease in EBITDA was primarily due to the absence of a $75 million gain on the extinguishment of debt which occurred in the third quarter of 2009, offset by a benefit of $11 million for former parent legacy matters.

Real Estate Franchise Services

Revenues decreased $13 million to $138 million and EBITDA decreased $17 million to $90 million for the three months ended September 30, 2010 compared with the same period in 2009.

The decrease in revenue was driven by a $12 million decrease in third-party domestic franchisee royalty revenue due to a 19% decrease in the number of homesale transactions. We believe that this decline was due to the pull-forward of sales into the second quarter of 2010 due to the 2010 homebuyer tax credit. The decrease was partially offset by a 4% increase in the average homesale price from our third-party franchisees, which benefited from a shift in sales activity to mid and higher priced properties.

The decrease in revenue was also attributable to an $8 million decrease in royalties received from our Company Owned Real Estate Brokerage Services segment which pays royalties to our Real Estate Franchise Services segment. These intercompany royalties of $51 million and $59 million during the third quarter of 2010 and 2009, respectively, are eliminated in consolidation. See “Company Owned Real Estate Brokerage Services” for a discussion of the drivers related to this period over period revenue decrease for the Real Estate Franchise Services segment. In addition, marketing revenue and related marketing expenses increased $5 million and $4 million respectively.

The $17 million decrease in EBITDA was principally due to the decrease in revenues discussed above and a $3 million increase in bad debt and note reserves expense for the quarter.

Company Owned Real Estate Brokerage Services

Revenues decreased $134 million to $762 million and EBITDA decreased $17 million to $31 million for the three months ended September 30, 2010 compared with the same period in 2009.

The decrease in revenues, excluding REO revenues, of $127 million, was substantially comprised of decreased commission income earned on homesale transactions which was primarily driven by a 25% decrease in the number of homesale transactions partially offset by an increase in the average price of homes sold of 12%. The increase in the average homesale price is primarily the result of a shift in homesale activity from lower to higher price points. We believe the 25% decrease in homesale transactions is reflective of industry trends in the markets we serve and was negatively impacted by the absence of the 2010 homebuyer tax credit program in the third quarter of 2010. Separately, revenues from our REO asset management company decreased by $7 million to $8 million in the three months ended September 30, 2010 compared to the same period in 2009 due to generally reduced inventory levels of foreclosed properties being made available for sale. Our REO operations facilitate the maintenance and sale of foreclosed homes on behalf of lenders.

EBITDA decreased $17 million due to the $134 million decrease in revenues discussed above partially offset by:

•

a decrease of $77 million in commission expenses paid to real estate agents as a result of the decrease in revenues;

•

a decrease of $24 million in restructuring expenses and other operating expenses compared to the same period in the prior year due to restructuring and cost-saving activities;

•

a decrease of $8 million in royalties paid to our Real Estate Franchise Services segment, principally as a result of the decrease in revenues earned on homesale transactions; and

•

an increase of $8 million in equity earnings related to our investment in PHH Home Loans.

Relocation Services

On January 21, 2010, the Company completed the acquisition of Primacy Relocation, LLC (“Primacy”), a relocation and global assignment management services company headquartered in Memphis, Tennessee with international locations in Europe and Asia. The acquisition enabled the Company to re-enter the U.S. government relocation business, increase its domestic operations, as well as expand the Company’s global relocation capabilities.

Revenues increased $30 million to $122 million, including $23 million related to Primacy, and EBITDA increased $17 million to $51 million, including $8 million related to Primacy, for the three months ended September 30, 2010 compared with the same period in 2009.

Relocation revenue, excluding the Primacy acquisition, increased $7 million and was primarily driven by an increase of $5 million of international revenue due to higher transaction volume. The acquisition of Primacy in January 2010 contributed $23 million of revenue to the third quarter and consisted primarily of $9 million of referral and domestic relocation service fee revenue, $8 million of government at-risk revenue and $4 million of international revenue.

EBITDA, excluding the Primacy acquisition, increased $9 million for the three months ended September 30, 2010 compared with the same period in 2009 primarily due to the $7 million increase in revenues noted above and a $4 million decrease in employee related expenses, partially offset by $3 million related to the unfavorable revaluation of foreign currency denominated transactions.

Title and Settlement Services

Revenues decreased $7 million to $84 million and EBITDA decreased $2 million to $8 million for the three months ended September 30, 2010 compared with the same period in 2009.

The decrease in revenues was primarily driven by a $12 million decrease in resale volume partially offset by a $3 million increase in volume from refinancing transactions and underwriter revenue. EBITDA decreased $2 million as a result of the decrease in revenues discussed above partially offset by $4 million of cost reductions.

Nine Months Ended September 30, 2010 vs. Nine Months Ended September 30, 2009

Our consolidated results comprised the following:


	Nine Months Ended September 30,
	2010			2009			Change
Net revenues	$	3,124		$	2,884		$	240
Total expenses ⁽¹⁾		3,019			3,102			(83	)

Income (loss) before income taxes, equity in earnings and noncontrolling interests		105			(218	)		323
Income tax expense (benefit)		134			15			119
Equity in earnings of unconsolidated entities		(22	)		(18	)		(4	)

Net income (loss)		(7	)		(215	)		208
Less: Net income attributable to noncontrolling interests		(1	)		(1	)		—

Net income (loss) attributable to Realogy	$	(8	)	$	(216	)	$	208

(1)

Total expenses for the nine months ended September 30, 2010 include $12 million of restructuring costs offset by a net benefit of $315 million of former parent legacy items primarily as a result of tax and other liability adjustments. Total expenses for the nine months ended September 30, 2009 include $59 million of restructuring costs offset by a net benefit of $37 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to Wright Express Corporation partially offset by $18 million of expenses recorded at Corporate) and a gain on the extinguishment of debt of $75 million.

Net revenues increased $240 million (8%) for the nine months ended September 30, 2010 compared with the nine months ended September 30, 2009 principally due to an increase in the number of homesale transactions, the average price of the homes sold and the impact of the Primacy acquisition.

Total expenses decreased $83 million (3%) primarily due to a net benefit of $315 million of former parent legacy items primarily as a result of tax and other liability adjustments compared to a net benefit of $37 million of former parent legacy items during the same period in 2009 which was primarily comprised of $55 million of tax receivable payments from Wright Express Corporation, as well as a decrease in restructuring expenses of $47 million compared to the same period in 2009. The decrease in expenses was partially offset by a $143 million increase in commission expenses paid to real estate agents due to increased gross commission income, the absence of a $75 million gain on the extinguishment of debt included in expenses in 2009, as well as a $28 million increase in interest expense.

Our income tax expense for the nine months ended September 30, 2010 was $134 million and was comprised of the following:

•

due to the recognition of a full valuation allowance for domestic operations, no additional U.S. Federal income tax benefit was recognized for the current period;

•

$20 million of income tax expense was recorded for an increase in deferred tax liabilities associated with indefinite-lived intangible assets; and

•

$5 million of income tax expense was recognized primarily for foreign and state income taxes for certain jurisdictions.

Following is a more detailed discussion of the results of each of our reportable segments during the nine months ended September 30:


	Revenues									EBITDA ^(b)									Margin
	2010			2009			% Change			2010			2009			% Change			2010			2009			Change
Real Estate Franchise Services	$	433		$	399			9	%	$	278		$	236			18	%		64	%		59	%		5
Company Owned Real Estate Brokerage Services		2,319			2,151			8			81			(12	)		775			3			(1	)		4
Relocation Services		304			243			25			82			106			(23	)		27			44			(17	)
Title and Settlement Services		235			247			(5	)		14			17			(18	)		6			7			(1	)
Corporate and Other ^(a) (c)		(167	)		(156	)		*			277			29			*

Total Company	$	3,124		$	2,884			8	%	$	732		$	376			95	%		23	%		13	%		10

Less: Depreciation and amortization											148			147
Interest expense, net											458			430
Income tax expense											134			15

Net income (loss) attributable to Realogy										$	(8	)	$	(216	)

(*)	not meaningful

(a)

Includes unallocated corporate overhead and the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by our Company Owned Real Estate Brokerage Services segment of $167 million and $156 million during the nine months ended September 30, 2010 and 2009, respectively.

(b)

EBITDA for the nine months ended September 30, 2010 includes $12 million of restructuring costs, offset by a net benefit of $315 million of former parent legacy items primarily as a result of tax and other liability adjustments. EBITDA for the nine months ended September 30, 2009 includes $59 million of restructuring costs offset by a net benefit of $37 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to Wright Express Corporation partially offset by $18 million of expenses recorded at Corporate).

(c)	EBITDA includes a gain on the extinguishment of debt of $75 million for the nine months ended September 30, 2009.

As described in the aforementioned table, EBITDA margin for “Total Company” expressed as a percentage of revenues increased 10 percentage points for the nine months ended September 30, 2010 compared to the same period in 2009 primarily due to a $278 million increase in former parent legacy benefits as well as improvements in operating results from our Real Estate Franchise Services and Company Owned Real Estate Brokerage Services segments.

On a segment basis, the Real Estate Franchise Services segment margin increased 5 percentage points to 64% from 59% in the prior period. The nine months ended September 30, 2010 reflected an increase in homesale transactions in the first half of 2010 due to the benefit of the 2010 homebuyer tax credit stimulus, offset by declines in the third quarter. The nine months also reflected higher average homesale price and reduced bad debt and notes reserve expense. The Company Owned Real Estate Brokerage Services segment margin increased 4 percentage points to 3% from a negative 1% in the comparable prior period. The nine months ended September 30, 2010 reflected an increase in the number of homesale transactions and average homesale price combined with lower operating expenses primarily as a result of restructuring and cost-saving activities. Sales volume in the nine months ended September 30, 2010 benefited from the homebuyer tax credit as well as a notable increase in activity at the mid and higher end of the housing market. The Relocation Services segment margin decreased 17 percentage points to 27% from 44% in the comparable prior period primarily due to the absence in 2010 of $55 million of tax receivable payments from Wright Express Corporation in 2009. The Title and Settlement Services segment margin decreased 1 percentage point to 6% from 7% in the comparable prior period due to a decrease in homesale transactions.

Corporate and Other EBITDA for the nine months ended September 30, 2010 increased $248 million to $277 million due to a net benefit of $315 million of former parent legacy items primarily as a result of tax and other liability adjustments compared to a net cost of $18 million of former parent legacy items for the same period in 2009, partially offset by the absence of a gain on debt extinguishment of $75 million and $11 million of proceeds from a legal settlement received in 2009.

Real Estate Franchise Services

Revenues increased $34 million to $433 million and EBITDA increased $42 million to $278 million for the nine months ended September 30, 2010 compared with the same period in 2009.

The increase in revenue was attributable to an $11 million increase in royalties received from our Company Owned Real Estate Brokerage Services segment which pays royalties to our Real Estate Franchise Services segment. These intercompany royalties of $158 million and $147 million during the nine months ended September 30, 2010 and 2009, respectively, are eliminated in consolidation. See “Company Owned Real Estate Brokerage Services” for a discussion of the drivers related to this period over period revenue increase for the Real Estate Franchise Services segment. International revenue increased $4 million during the nine months ended September 30, 2010, while third-party domestic franchisee royalty revenue remained consistent with the prior year due to a 1% decrease in the number of homesale transactions offset by a 4% increase in the average homesale price from our third-party franchisees. In addition, marketing revenue and related marketing expenses increased $19 million and $17 million, respectively.

The $42 million increase in EBITDA was principally due to the increase in revenues discussed above, a $17 million decrease in bad debt and note reserves expense as a result of improved collection activities compared to the prior period and a $4 million decrease in legal expenses.

Company Owned Real Estate Brokerage Services

Revenues increased $168 million to $2,319 million and EBITDA increased $93 million to $81 million for the nine months ended September 30, 2010 compared with the same period in 2009.

The increase in revenues, excluding REO revenues, of $192 million was due to increased commission income earned on homesale transactions which was primarily driven by a 12% increase in the average price of homes sold, partially offset by a 2% decrease in the number of homesale transactions and a decrease in the average broker commission rate. The increase in the average homesale price and lower average broker commission rate are primarily the result of a shift in homesale activity from lower to higher price points. We believe the 2% decrease in homesale transactions is reflective of industry trends in the markets we serve and was aided by the 2010 homebuyer tax credit program in the first half of 2010, particularly in locations which have lower average homesale prices. Homesale transaction activity declined 25% in the third quarter, which we believe was due to the expiration of the homebuyer tax credit. Separately, revenues from our REO asset management company decreased by $24 million to $27 million in the nine months ended September 30, 2010 compared to the same period in 2009 due to generally reduced inventory levels of foreclosed properties being made available for sale. Our REO operations facilitate the maintenance and sale of foreclosed homes on behalf of lenders.

EBITDA increased $93 million due to the $168 million increase in revenues discussed above as well as:

•

a decrease in restructuring expense of $35 million for the nine months ended September 30, 2010 compared to the same period in the prior year;

•

a decrease of $37 million in other operating expenses, net of inflation, primarily due to restructuring and cost-saving activities as well as reduced employee costs; and

•

an increase of $4 million in equity earnings related to our investment in PHH Home Loans;

partially offset by:

•

an increase of $143 million in commission expenses paid to real estate agents as a result of the increase in revenue; and

•

an increase of $11 million in royalties paid to our Real Estate Franchise Services segment, principally as a result of the increase in revenues earned on homesale transactions.

Relocation Services

Revenues increased $61 million to $304 million, including $56 million related to Primacy, and EBITDA decreased $24 million to $82 million, including an increase of $11 million related to Primacy, for the nine months ended September 30, 2010 compared with the same period in 2009.

Relocation revenue, excluding the Primacy acquisition, increased $5 million and was primarily driven by a $5 million increase in international revenue due to higher transaction volume. The acquisition of Primacy in January 2010 contributed $56 million of revenue during the nine months ended September 30, 2010, which primarily consisted of $23 million of referral and domestic relocation service fee revenue, $19 million of government at-risk revenue and $11 million of international revenue.

EBITDA, excluding the Primacy acquisition, decreased $35 million for the nine months ended September 30, 2010 compared with the same period in 2009 due to the absence in 2010 of $55 million of tax

receivable payments from WEX. Absent the impact of the WEX tax receivable payments, EBITDA increased $20 million primarily as a result of an $8 million decrease in restructuring expenses, a $10 million decrease in other operating expenses primarily as a result of cost-saving activities and reduced employee costs, and a $4 million year over year improvement in legal expenses.

Title and Settlement Services

Revenues decreased $12 million to $235 million and EBITDA decreased $3 million to $14 million for the nine months ended September 30, 2010 compared with the same period in 2009.

The decrease in revenues was primarily driven by a $16 million decrease in volume from refinancing transactions and a $5 million decrease in resale volume partially offset by a $6 million increase in underwriter revenue. EBITDA decreased $3 million primarily due to the decrease in revenues discussed above, partially offset by $10 million of cost reductions.

2010 Restructuring Program

Restructuring charges by segment for the nine months ended September 30, 2010 were as follows:


	Opening Balance		Expense Recognized and Other Additions			Cash Payments/ Other Reductions			Liability as of September 30, 2010
Real Estate Franchise Services	$	—	$	—		$	—		$	—
Company Owned Real Estate Brokerage Services		—		8			(5	)		3
Relocation Services		—		4	^(a)		(1	)		3
Title and Settlement Services		—		2			(2	)		—
Corporate and Other		—		—			—			—

	$	—	$	14	^(b ⁾	$	(8	)	$	6

(a)	Includes $1 million of unfavorable lease liability recorded in purchase accounting for Primacy which was reclassified to restructuring liability as a result of the Company restructuring certain facilities after the acquisition date.

(b)	Current year restructuring expense on the Statement of Operations is net of $1 million related to the reversal of prior years restructuring accruals.

The table below shows restructuring charges by category and the corresponding payments and other reductions for the nine months ended September 30, 2010:


	Personnel Related			Facility Related			Asset Impairments			Total
Restructuring expense and other additions	$	3		$	10		$	1		$	14
Cash payments and other reductions		(3	)		(4	)		(1	)		(8	)

Balance at September 30, 2010	$	—		$	6		$	—		$	6

2009 Restructuring Program

The recognition of the 2009 restructuring charge and the corresponding utilization from inception to September 30, 2010 are summarized by category as follows:


	Personnel Related			Facility Related			Asset Impairments			Total
Restructuring expense	$	19		$	46		$	9		$	74
Cash payments and other reductions		(17	)		(14	)		(9	)		(40	)

Balance at December 31, 2009		2			32			—			34
Cash payments and other reductions		(1	)		(11	)		—			(12	)

Balance at September 30, 2010	$	1		$	21		$	—		$	22

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

FINANCIAL CONDITION


	September 30, 2010			December 31, 2009			Change
Total assets	$	8,162		$	8,041		$	121
Total liabilities		9,143			9,022			121
Total equity (deficit)		(981	)		(981	)		—

For the nine months ended September 30, 2010, total assets increased $121 million primarily as a result of the Primacy acquisition which increased relocation properties held for sale $28 million, goodwill $16 million and intangible assets, net of amortization, $56 million. In addition, relocation receivables increased $103 million and trade receivables increased $38 million for the nine months ended September 30, 2010. These increases were partially offset by a decrease in franchise agreements of $51 million due to amortization. Total liabilities increased $121 million principally due to an increase in indebtedness as a result of the Company entering into $138 million of revolving letter of credit backed credit facilities, a $115 million increase in deferred income taxes, an increase in accounts payable of $72 million and an increase in accrued expenses and other current liabilities of $129 million, partially offset by a $388 million decrease in amounts due to former parent as a result of tax and other liability adjustments. Total equity (deficit) remained consistent with the nine months ended September 30, 2010.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity position may continue to be negatively affected by (i) unfavorable conditions in the real estate or relocation market, including adverse changes in interest rates, (ii) access to our relocation securitization programs and (iii) access to the capital markets, which may be further limited if we were to fail to extend or refinance any of the facilities or if we were to fail to meet certain covenants.

During the first half of 2010, the housing market showed signs of stabilization; however, the second half of 2010 is expected to be weak compared to the second half of 2009 and there remains substantial uncertainty with respect to the timing and scope of a housing recovery. Factors that may negatively affect a housing recovery include:

•

higher mortgage rates;

•

lower unit sales, following the expiration of the federal homebuyer tax credit;

•

lower average homesale price, particularly if banks and other mortgage servicers liquidate foreclosed properties that they are currently holding;

•

continuing high levels of unemployment;

•

unsustainable economic recovery in the U.S. or, if sustained, a recovery resulting in only modest economic growth; and

•

a lack of stability or improvement in home ownership levels in the U.S.

At September 30, 2010, our primary sources of liquidity are cash flows from operations and funds available under the revolving credit facility and our securitization facilities. Our primary liquidity needs will be to service our debt and finance our working capital and capital expenditures.

***

Our ability to make payments to fund working capital, capital expenditures, debt service, and strategic acquisitions and to maintain compliance with the financial covenant in our credit facilities will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control and will likely require us to refinance or restructure our debt and/or issue additional equity. We have considered and will continue to evaluate potential transactions to refinance our indebtedness, including transactions to reduce net debt, extend maturities and/or reduce first lien debt. There can be no assurance as to which, if any, of these alternatives we may pursue in the future as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our existing financing agreements.

Future indebtedness may impose various restrictions and covenants on us which could limit our ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities. We cannot assure that financing will be available to us on acceptable terms or at all.

Cash Flows

At September 30, 2010, we had $235 million of cash and cash equivalents, a decrease of $20 million compared to the balance of $255 million at December 31, 2009. The following table summarizes our cash flows for the nine months ended September 30, 2010 and 2009:


	Nine Months Ended September 30,
	2010			2009			Change
Cash provided by (used in):
Operating activities	$	(102	)	$	304		$	(406	)
Investing activities		(36	)		(24	)		(12	)
Financing activities		118			(528	)		646
Effects of change in exchange rates on cash and cash equivalents		—			3			(3	)

Net change in cash and cash equivalents	$	(20	)	$	(245	)	$	225

For the nine months ended September 30, 2010 we used $406 million of additional cash in operations compared to the same period in 2009. For the nine months ended September 30, 2010, $102 million of cash was

used in operating activities due to uses of cash related to trade receivables and relocation receivables of $35 million and $77 million, respectively, as well as by negative cash flows from operating results, partially offset by sources of cash related to accounts payable and relocation properties held for sale of $96 million and $35 million, respectively. For the nine months ended September 30, 2009, $304 million of cash was provided by operating activities and was comprised of sources of cash related to relocation receivables and relocation properties held for sale of $375 million and $21 million, respectively, and accounts payable of $50 million, partially offset by negative cash flows from operating results.

For the nine months ended September 30, 2010 we used $12 million more cash for investing activities compared to the same period in 2009. For the nine months ended September 30, 2010, $36 million of cash was used in investing activities and was primarily due to $33 million of property and equipment additions and the purchase of certificates of deposit for $10 million, partially offset by proceeds from the sale of assets of $5 million. For the nine months ended September 30, 2009, $24 million of cash was used in investing activities and was primarily comprised of $23 million of property and equipment additions.

For the nine months ended September 30, 2010 we provided $646 million more cash from financing activities compared to the same period in 2009. For the nine months ended September 30, 2010, $118 million of cash was provided by financing activities and was comprised of $117 million of proceeds from drawings on our unsecured revolving credit facilities and additional securitization obligations of $34 million, partially offset by $24 million of term loan facility repayments. For the nine months ended September 30, 2009, $528 million of cash was used in financing activities and was comprised of $336 million of securitization obligation repayments, a decrease in incremental revolver borrowings of $515 million and $24 million of term loan facility repayments, partially offset by proceeds of $365 million related to the issuance of the Second Lien Loans.

Financial Obligations

SENIOR SECURED CREDIT FACILITY

The senior secured credit facility consists of (i) a $3,170 million term loan facility, (ii) a $750 million revolving credit facility, (iii) a $525 million synthetic letter of credit facility (the facilities described in clauses (i), (ii) and (iii), collectively referred to as the “First Lien Facilities”) and (iv) a $650 million incremental loan facility.

Interest rates with respect to term loans under the senior secured credit facility are based on, at the Company’s option, (a) adjusted LIBOR plus 3.0% or (b) the higher of the Federal Funds Effective Rate plus 0.5% and JPMorgan Chase Bank, N.A.’s prime rate (“ABR”) plus 2.0%. The term loan facility provides for quarterly amortization payments totaling 1% per annum of the principal amount with the balance due upon the final maturity date. Interest rates with respect to revolving loans under the senior secured credit facility are based on, at the Company’s option, adjusted LIBOR plus 2.25% or ABR plus 1.25%, in each case subject to reductions based on the attainment of certain leverage ratios.

million letter of credit with Cendant for any remaining potential contingent obligations and $100 million of letters of credit for general corporate purposes. The remaining capacity of $24 million can only be used for Cendant liability claims.

At September 30, 2010, the Company had $3,067 million outstanding under the term loan facility, $650 million of Second Lien Loans, $232 million of letters of credit outstanding under our synthetic letter of credit facility, and an additional $127 million of outstanding letters of credit under our revolving credit facility.

OTHER BANK INDEBTEDNESS

During the first six months of 2010, the Company entered into five separate revolving credit facilities to borrow up to $130 million. These facilities bear interest at a weighted average rate of LIBOR plus 1.6% or 3% as of September 30, 2010. The facilities are subject to a minimum interest rate of LIBOR plus 1.4% and interest payments are payable either monthly or quarterly. In August 2010, the Company entered into an additional revolving credit facility to borrow up to £5 million with an interest rate at the lender’s base rate plus 2.0% or 2.5% as of September 30, 2010. These facilities are not secured by assets of the Company or any of its subsidiaries but are supported by letters of credit issued under the senior secured credit facility. The facilities generally have a one-year term with certain options for renewal, though one facility has a term expiring in January 2013. As of September 30, 2010, the Company has borrowed $138 million which is the total capacity of these facilities, $40 million of which was used to finance the Primacy acquisition in January 2010.

UNSECURED NOTES

October 15 of each year. For any interest payment period after the initial interest payment period and through October 15, 2011, the Company may, at its option, elect to pay interest on the Senior Toggle Notes (1) entirely in cash (“Cash Interest”), (2) entirely by increasing the principal amount of the outstanding Senior Toggle Notes or by issuing Senior Toggle Notes (“PIK Interest”), or (3) 50% as Cash Interest and 50% as PIK Interest. After October 15, 2011, the Company is required to make all interest payments on the Senior Toggle Notes entirely in cash. Cash interest on the Senior Toggle Notes will accrue at a rate of 11.00% per annum. PIK Interest on the Senior Toggle Notes will accrue at the Cash Interest rate per annum plus 0.75%. In the absence of an election for any interest period, interest on the Senior Toggle Notes shall be payable according to the method of payment for the previous interest period.

The Company would be subject to certain interest deduction limitations if the Senior Toggle Notes were treated as “applicable high yield discount obligations” (“AHYDO”) within the meaning of Section 163(i)(1) of the Internal Revenue Code. In order to avoid such treatment, the Company is required to redeem for cash a portion of each Senior Toggle Note. The portion of a Senior Toggle Note required to be redeemed is an amount equal to the excess of the accrued original issue discount as of the end of such accrual period, less the amount of interest paid in cash on or before such date, less the first-year yield (the issue price of the debt instrument multiplied by its yield to maturity). The redemption price for the portion of each Senior Toggle Note so redeemed would be 100% of the principal amount of such portion plus any accrued interest on the date of redemption. Assuming that the Company continues to utilize the PIK Interest option election through October 2011, the Company would be required to repay approximately $132 million in April 2012 in accordance with the indenture governing the Senior Toggle Notes.

The Fixed Rate Senior Notes and Senior Toggle Notes are guaranteed on an unsecured senior basis, and the Senior Subordinated Notes are guaranteed on an unsecured senior subordinated basis, in each case, by each of the Company’s existing and future U.S. subsidiaries that is a guarantor under the senior secured credit facility or that guarantees certain other indebtedness in the future, subject to certain exceptions.

SENIOR TOGGLE NOTE EXCHANGE

DEBT RATINGS

As of December 31, 2009, Standard and Poor’s and Moody’s maintained the following debt ratings for the Company; (1) our Corporate Family Rating was CC and Caa3, respectively, (2) our Senior Secured Debt rating was CCC- and Caa1, respectively, (3) our Unsecured Notes rating was C and Ca, respectively, and (4) our Second Lien Loans rating was C and Caa3, respectively. The rating outlook was negative.

In June 2010, Standard and Poor’s maintained the ratings noted above but changed the Corporate rating outlook to developing from negative. In August 2010, Moody’s upgraded the Company’s ratings and revised our Corporate Family Rating to Caa2 from Caa3, our Senior Secured Debt rating to B1 from Caa1, our Unsecured Notes rating to Caa3 from Ca and our Second Lien Loans rating to Caa2 from Caa3. In addition, Moody’s changed the Corporate rating outlook to stable from negative. The debt ratings noted above continue to be in effect as of September 30, 2010.

SECURITIZATION OBLIGATIONS

On August 19, 2010, the Company through a special purpose entity, Cartus Financing Limited, entered into new agreements that provide for a £35 million revolving loan facility and a £5 million working capital facility. These facilities are secured by relocation assets of a U.K. government contract in a special purpose entity and are therefore classified as permitted securitization financings as defined in the Company’s senior secured credit facility and indentures governing the Unsecured Notes. The £35 million facility has a term of five years and the £5 million working capital facility has a term of one year.

AVAILABLE CAPACITY

As of September 30, 2010, the total capacity, outstanding borrowings and available capacity under the Company’s borrowing arrangements is as follows:


	Expiration Date		Total Capacity		Outstanding Borrowings		Available Capacity
Senior Secured Credit Facility:
Revolving credit facility ⁽¹⁾		April 2013	$	750	$	—	$	623
Term loan facility ⁽²⁾		October 2013		3,067		3,067		—
Second Lien Loans		October 2017		650		650		—
Other bank indebtedness ⁽³⁾		Various		138		138		—
Fixed Rate Senior Notes ⁽⁴⁾		April 2014		1,700		1,688		—
Senior Toggle Notes ⁽⁵⁾		April 2014		444		441		—
Senior Subordinated Notes ⁽⁶⁾		April 2015		875		864		—
Securitization obligations:
Apple Ridge Funding LLC ⁽⁷⁾		April 2012		500		313		187
Cartus Financing Limited ⁽⁸⁾		Various		63		25		38
U.K. Relocation Receivables Funding Limited ⁽⁹⁾		April 2011		—		—		—

			$	8,187	$	7,186	$	848

(1)

The available capacity under this facility was reduced by $127 million of outstanding letters of credit at September 30, 2010. Based upon the senior secured leverage ratio of 4.57 to 1 at September 30, 2010, we could have borrowed as of such date an additional $267 million under the revolving credit facility under the senior secured credit agreement and remained in compliance with the 5 to 1 maximum senior secured leverage ratio. On November 5, 2010, the Company had $120 million outstanding on the revolving credit facility and $154 million of outstanding letters of credit.

(2)	Total capacity has been reduced by the quarterly principal payments of 0.25% of the loan balance as required under this facility. The interest rate on the term loan facility was 3.28% at September 30, 2010.

(3)	Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $30 million is due in April 2011, $50 million is due in June 2011, $8 million due in August 2011 and $50 million is due in January 2013.

(4)	Consists of $1,700 million of 10.50% Senior Notes due 2014, less a discount of $12 million.

(5)	Consists of $444 million of 11.00%/11.75% Senior Toggle Notes due 2014, less a discount of $3 million. On October 15, 2010, the Company issued $26 million of Senior Toggle Notes to satisfy its interest payment obligations for the six-month period ended October 2010.

(6)	Consists of $875 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $11 million.

(7)	Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.

(8)	Consists of a £35 million facility with a term of five years and a £5 million working capital facility with a term of one year.

(9)	The Company terminated this facility in August 2010.

Covenants under our Senior Secured Credit Facility and the Unsecured Notes

Our senior secured credit facility and the Unsecured Notes contain various covenants that limit our ability to, among other things:

•

incur or guarantee additional debt;

•

incur debt that is junior to senior indebtedness and senior to the senior subordinated notes;

•

pay dividends or make distributions to our stockholders;

•

repurchase or redeem capital stock or subordinated indebtedness;

•

make loans, investments or acquisitions;

•

incur restrictions on the ability of certain of our subsidiaries to pay dividends or to make other payments to us;

•

enter into transactions with affiliates;

•

create liens;

•

merge or consolidate with other companies or transfer all or substantially all of our assets;

•

transfer or sell assets, including capital stock of subsidiaries; and

•

prepay, redeem or repurchase the Unsecured Notes and debt that is junior in right of payment to the Unsecured Notes.

As a result of these covenants, we are 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. In addition, on the last day of each fiscal quarter, the financial covenant in our senior secured credit facility requires us to maintain on a quarterly basis a senior secured leverage ratio not to exceed a maximum amount. Specifically, our total senior secured net debt to trailing twelve-month EBITDA (as such terms are defined in the senior secured credit facility), calculated on a “pro forma” basis pursuant to the senior secured credit facility, may not exceed 5.0 to 1 at September 30, 2010. The ratio steps down to 4.75 to 1 on March 31, 2011 and thereafter. Total senior secured net debt does not include the Second Lien Loans, other bank indebtedness not secured by a first lien on our assets, securitization obligations or the Unsecured Notes. EBITDA, as defined in the senior secured credit facility, includes certain adjustments and also is calculated on a pro forma basis for purposes of calculating the senior secured leverage ratio. In this report, we refer to the term “Adjusted EBITDA” to mean EBITDA as so defined and calculated for purposes of determining compliance with the senior secured leverage ratio. At September 30, 2010, the Company was in compliance with the senior secured leverage ratio.

In order to comply with the senior secured leverage ratio for the twelve-month periods ending December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011 (or to avoid an event of default thereof), the Company will need to achieve a certain amount of Adjusted EBITDA and/or reduced levels of total senior secured net debt. The factors that will impact the foregoing include: (a) slowing decreases, stabilization or increases in sales volume and/or the price of existing homesales, (b) continuing to effect cost-savings and business productivity enhancement initiatives, (c) increasing new franchise sales, sales associate recruitment and/or brokerage and other acquisitions, (d) obtaining additional equity financing from our parent company, (e) obtaining additional debt or equity financing from third party sources, or (f) a combination thereof. Factors (b) through (e) may be insufficient to overcome macroeconomic conditions affecting the Company.

The Company’s current financial forecast of Adjusted EBITDA considers numerous factors including open homesale contract trends, industry forecasts and macroeconomic factors, local market dynamics and concentrations in the markets in which we operate. Our twelve month forecast is updated monthly to consider the actual results of the Company and incorporates current homesale contract activity, updated industry forecasts and macroeconomic factors and changes in local market dynamics as well as additional cost savings and business optimization initiatives underway or to be implemented by management. As such initiatives are implemented, management, as permitted by the existing agreement, will pro forma the effect of such measures and add back the savings or enhanced revenue from those initiatives as if they had been implemented at the beginning of the trailing twelve-month period. During the first half of 2010, the housing market showed signs of stabilization; however, the second half of 2010 is expected to be weak compared to the second half of 2009 and there remains substantial uncertainty with respect to the timing and scope of a housing recovery. If a housing recovery is delayed further or is weak, we may be subject to additional pressure in maintaining compliance with our senior secured leverage ratio.

twelve months. The Company has the right to avoid an event of default of the senior secured leverage ratio in three of any of the four consecutive quarters through the issuance of additional Holdings equity for cash, which would be infused as capital into the Company. The effect of such infusion would be to increase Adjusted EBITDA for purposes of calculating the senior secured leverage ratio for the applicable twelve month period and reduce net senior secured indebtedness upon actual receipt of such capital.

If we are unable to maintain compliance with the senior secured leverage ratio and we fail to remedy a default through an equity cure as described above, there would be an “event of default” under the senior secured credit agreement. Other events of default under the senior secured credit facility include, without limitation, nonpayment, material misrepresentations, insolvency, bankruptcy, certain judgments, change of control and cross-events of default on material indebtedness.

If an event of default occurs under our senior secured credit facility and we fail to obtain a waiver from our lenders, our financial condition, results of operations and business would be materially adversely affected. Upon the occurrence of an event of default under our senior secured credit facility, the lenders:

•

would 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;

•

could require us to apply all of our available cash to repay these borrowings; or

•

could prevent us from making payments on the Unsecured Notes;

any of which could result in an event of default under the Unsecured Notes and our Securitization Facilities.

If we were unable to repay those amounts, the lenders under our senior secured credit facility could proceed against the collateral granted to them to secure that indebtedness. We have pledged the majority of our assets as collateral under our senior secured credit facility. If the lenders under our senior secured credit facility were to accelerate the repayment of borrowings, then we may not have sufficient assets to repay our senior secured credit facility and our other indebtedness, including the Unsecured Notes, or be able to borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.

EBITDA and Adjusted EBITDA

EBITDA is defined by the Company as net income (loss) before depreciation and amortization, interest (income) expense, net (other than relocation services interest for securitization assets and securitization obligations) and income taxes. Adjusted EBITDA is calculated by adjusting EBITDA by the items described below. Adjusted EBITDA corresponds to the definition of “EBITDA,” calculated on a “pro forma basis,” used in the senior secured credit facility to calculate the senior secured leverage ratio and substantially corresponds to the definition of “EBITDA” used in the indentures governing the Unsecured Notes to test the permissibility of certain types of transactions, including debt incurrence. We present EBITDA because we believe EBITDA is a useful supplemental measure in evaluating the performance of our operating businesses and provides greater transparency into our results of operations. The EBITDA measure is used by our management, including our chief operating decision maker, to perform such evaluation, and Adjusted EBITDA is used in measuring compliance with debt covenants relating to certain of our borrowing arrangements. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP.

We believe EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles,

which may vary for different companies for reasons unrelated to operating performance. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an EBITDA measure when reporting their results.

EBITDA has limitations as an analytical tool, and you should not consider EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:

•

EBITDA does not reflect changes in, or cash requirement for, our working capital needs;

•

EBITDA does not reflect our interest expense (except for interest related to our securitization obligations), or the cash requirements necessary to service interest or principal payments on our debt;

•

EBITDA does not reflect our income tax expense or the cash requirements to pay our taxes;

•

EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these EBITDA measures do not reflect any cash requirements for such replacements; and

•

other companies in our industry may calculate these EBITDA measures differently so they may not be comparable.

In addition to the limitations described above with respect to EBITDA, Adjusted EBITDA includes pro forma cost-savings and the pro forma full year effect of NRT acquisitions and RFG acquisitions/new franchisees. These adjustments may not reflect the actual cost-savings or pro forma effect recognized in future periods.

A reconciliation of net income (loss) attributable to Realogy to EBITDA and Adjusted EBITDA for the twelve months ended September 30, 2010 is set forth in the following table:


	Year Ended December 31, 2009			Less			Equals			Plus			Equals
	Year Ended December 31, 2009			Nine Months Ended September 30, 2009			Three Months Ended December 31, 2009			Nine Months Ended September 30, 2010			Twelve Months Ended September 30, 2010
Net loss attributable to Realogy	$	(262	)	$	(216	)	$	(46	)	$	(8	)	$	(54	) ^(a)
Income tax expense (benefit)		(50	)		15			(65	)		134			69

Income (loss) before income taxes		(312	)		(201	)		(111	)		126			15
Interest expense, net		583			430			153			458			611
Depreciation and amortization		194			147			47			148			195

EBITDA		465			376			89			732			821	^(b)
Covenant calculation adjustments:
Restructuring costs, merger costs and former parent legacy cost (benefit) items, net ^(c)														(288	)
Pro forma cost-savings for 2010 restructuring initiatives ^(d)														11
Pro forma cost-savings for 2009 restructuring initiatives ^(e)														1
Pro forma effect of business optimization initiatives ^(f)														50
Non-cash charges ^(g)														6
Non-recurring fair value adjustments for purchase accounting ^(h)														4
Pro forma effect of acquisitions and new franchisees ⁽ⁱ⁾														6
Apollo management fees ^(j)														15
Incremental securitization interest costs ^(k)														2

Adjusted EBITDA													$	628

Total senior secured net debt ^(l)													$	2,873
Senior secured leverage ratio														4.57x

(a)	Net income (loss) attributable to Realogy consists of: (i) a loss of $46 million for the fourth quarter of 2009; (ii) a loss of $197 million for the first quarter of 2010; (iii) income of $222 million for the second quarter of 2010; and (iv) a loss of $33 million for the third quarter of 2010.

(b)	EBITDA consists of: (i) $89 million for the fourth quarter of 2009; (ii) $11 million for the first quarter of 2010; (iii) $544 million for the second quarter of 2010; and (iv) $177 million for the third quarter of 2010.

(c)	Consists of $23 million of restructuring costs and $1 million of merger costs offset by a net benefit of $312 million for former parent legacy items.

(d)

Represents actual costs incurred that are not expected to recur in subsequent periods due to restructuring activities initiated during the first nine months of 2010. From this restructuring, we expect to reduce our operating costs by approximately $19 million on a twelve-month run-rate basis and estimate that $8 million of such savings were realized from the time they were put in place. The adjustment shown represents the impact the savings would have had on the period from October 1, 2009 through the time they were put in place had those actions been effected on October 1, 2009.

(e)

Represents actual costs incurred that are not expected to recur in subsequent periods due to restructuring activities initiated during the year ended December 31, 2009. From this restructuring, we expect to reduce our operating costs by approximately $103 million on a twelve-month run-rate basis and estimate that $102 million of such savings were realized from the time they were put in place. The adjustment shown represents the impact the savings would have had on the period from October 1, 2009 through the time they were put in place had those actions been effected on October 1, 2009.

(f)	Represents the twelve-month pro forma effect of business optimization initiatives that have been completed to reduce costs of $22 million as well as $28 million for employee retention accruals.

(g)

Represents the elimination of non-cash expenses, including a $14 million write-down of a cost method investment acquired in 2006, $6 million of stock-based compensation expense, less $14 million for the change in the allowance for doubtful accounts and notes reserves from October 1, 2009 through September 30, 2010.

(h)	Reflects the adjustment for the negative impact of fair value adjustments for purchase accounting at the operating business segments primarily related to deferred rent.

(i)

Represents the estimated impact of acquisitions and new franchisees as if they had been acquired or signed on October 1, 2009. We have made a number of assumptions in calculating such estimate and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired entities or entered into the franchise contracts as of October 1, 2009.

(j)	Represents the elimination of annual management fees payable to Apollo for the twelve months ended September 30, 2010.

(k)	Incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended September 30, 2010.

(l)

Represents total borrowings under the senior secured credit facility which are secured by a first priority lien on our assets of $3,067 million plus $12 million of capital lease obligations less $206 million of readily available cash as of September 30, 2010. Pursuant to the terms of the senior secured credit agreement, senior secured net debt does not include Second Lien Loans, other bank indebtedness not secured by a first lien on our assets, securitization obligations or Unsecured Notes.

LIQUIDITY RISKS

Our liquidity position may be negatively affected as a result of the following specific liquidity risks.

Senior Secured Credit Facility Covenant Compliance

On the last day of each fiscal quarter, the financial covenant in our senior secured credit facility requires us to maintain on a quarterly basis a senior secured leverage ratio not to exceed a maximum amount. Specifically, our total senior secured net debt to trailing twelve month Adjusted EBITDA may not exceed 5.0 to 1 at September 30, 2010. The ratio steps down to 4.75 to 1 on March 31, 2011 and thereafter. In order to comply with the senior secured leverage ratio for the twelve-month periods ending December 31, 2010, March 31, 2011,

June 30, 2011 and September 30, 2011 (or to avoid an event of default thereof), the Company will need to achieve a certain amount of Adjusted EBITDA and/or reduced levels of total senior secured net debt. The factors that will impact the foregoing include: (a) slowing decreases, stabilization or increases in sales volume and/or the price of existing homesales, (b) continuing to effect cost-savings and business productivity enhancement initiatives, (c) increasing new franchise sales, sales associate recruitment and/or brokerage and other acquisitions, (d) obtaining additional equity financing from our parent company, (e) obtaining additional debt or equity financing from third party sources, or (f) a combination thereof. Factors (b) through (e) may be insufficient to overcome macroeconomic conditions affecting the Company.

If we fail to maintain the senior secured leverage ratio or otherwise default under our senior secured credit facility and if we fail to obtain a waiver from our lenders, then our financial condition, results of operations and business would be materially adversely affected.

Our ability to maintain compliance with the financial covenant in our senior secured credit facility will likely require us to refinance or restructure our debt and/or issue additional equity. We have considered and will continue to evaluate potential transactions to refinance our indebtedness, including transactions to reduce net debt, extend maturities and/or reduce first lien debt. There can be no assurance as to which, if any, of these alternatives we may pursue in the future as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our existing financing agreements.

Former Parent Contingent Tax Liabilities

On July 15, 2010, Cendant and the IRS agreed to settle the previously disclosed IRS examination of Cendant’s taxable years 2003 through 2006. Pursuant to the IRS settlement, Tax Sharing Agreement and a letter agreement executed with Wyndham on July 15, 2010, Realogy agreed to pay a total of approximately $48 million, excluding estimated interest, to reimburse Cendant for a portion of the amount payable by Cendant to the IRS and Wyndham for certain tax credits used under the IRS settlement. In the third quarter of 2010, Realogy paid $58 million, including interest, to Cendant and Wyndham.

Interest Rate Risk

Certain of our borrowings, primarily First Lien Loans under our senior secured credit facility, revolving credit facilities and borrowings under our securitization arrangements, are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net loss would increase further. We have entered into interest rate swaps, involving the exchange of floating for fixed rate interest payments, to reduce interest rate volatility for a portion of our floating interest rate debt facilities.

Securitization Programs

Funding requirements of our relocation business are primarily satisfied through the issuance of securitization obligations to finance relocation receivables and advances. The Apple Ridge securitization facility under which securitization obligations are issued has restrictive covenants and trigger events, including performance triggers linked to the age and quality of the underlying assets, limits on net credit losses incurred, financial reporting requirements, restrictions on mergers and change of control, and cross defaults under our senior secured credit facility, Unsecured Notes and other material indebtedness.

CONTRACTUAL OBLIGATIONS

Our future contractual obligations as of September 30, 2010 have not changed significantly from the amounts reported in our 2009 Form 10-K except for the additional indebtedness incurred related to the Primacy acquisition as well as other bank indebtedness of $98 million.

POTENTIAL DEBT PURCHASES OR SALES

Our affiliates have purchased a portion of our indebtedness and we or our affiliates from time to time may purchase additional portions of our 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 well as with such consideration as we or any such affiliates may determine. Affiliates who own portions of our indebtedness earn interest on a consistent basis compared with third party owners.

SEASONALITY

Our businesses are subject to seasonal fluctuations. Historically, operating statistics and revenues for all of our businesses have been strongest in the second and third quarters of the calendar year. A significant portion of the expenses we incur in our real estate brokerage operations are related to marketing activities and commissions and are, therefore, variable. However, many of our other expenses, such as facilities costs and certain personnel-related costs, are fixed and cannot be reduced during a seasonal slowdown.

CRITICAL ACCOUNTING POLICIES

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. 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, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our combined results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.

These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated and Combined Financial Statements included in the 2009 Form 10-K, which includes a description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results.

RECENTLY ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 1 of the Notes to the Condensed Consolidated Financial Statements for a discussion of recently adopted and issued accounting pronouncements.

Item 3.

Quantitative and Qualitative Disclosures about Market Risks

Our principal market exposure is interest rate risk. At September 30, 2010, our primary interest rate exposure was to interest rate fluctuations in the United States, specifically LIBOR, due to its impact on our variable rate borrowings. Due to our senior secured credit facility which is benchmarked to U.S. LIBOR, this rate will be the primary market risk exposure for the foreseeable future. We do not have significant exposure to foreign currency risk nor do we expect to have significant exposure to foreign currency risk in the foreseeable future.

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in interest rates. In performing the sensitivity analysis, we are required to make assumptions regarding the fair values of relocation receivables and advances and securitization borrowings, which approximate their carrying values due to the short-term nature of these items. We believe our interest rate risk is further mitigated as the rate we incur on our securitization borrowings and the rate we earn on relocation receivables and advances are based on similar variable indices.

Our total market risk is influenced by various factors, including the volatility present within the markets and the liquidity of the markets. There are certain limitations inherent in the sensitivity analyses presented. While probably the most meaningful analysis, these analyses are constrained by several factors, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.

At September 30, 2010, we had total long-term debt of $6,848 million, excluding $338 million of securitization obligations. Of the $6,848 million of long-term debt, the Company has $3,205 million of variable interest rate debt primarily based on LIBOR. At September 30, 2010, we have floating to fixed interest rate swap agreements with varying expiration dates with an aggregate notional value of $425 million which effectively fixes our interest rate on that portion of variable interest rate debt. The remaining variable interest rate debt is subject to market rate risk as our interest payments will fluctuate as a result of market changes. We have determined that the impact of a 100 bps change in LIBOR (1% change in the interest rate) on our term loan facility variable rate borrowings would affect our annual interest expense by approximately $28 million. While these results may be used as benchmarks, they should not be viewed as forecasts.

At September 30, 2010, the fair value of our long-term debt approximated $6,109 million, which was determined based on quoted market prices. Since considerable judgment is required in interpreting market information, the fair value of the long-term debt is not necessarily indicative of the amount that could be realized in a current market exchange. A 10% decrease in market rates would have a $132 million impact on the fair value of our long-term debt.

Item 4T.

Controls and Procedures

(a)

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

(b)

As of the end of the period covered by this quarterly report on Form 10-Q, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our

disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at the “reasonable assurance” level.

(c)	There has not been any change in our internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings

The following updates certain disclosures with respect to legal and regulatory proceedings contained in our 2009 Form 10-K and 10-Qs for the three months ended March 31, 2010 and June 30, 2010.

Legal—Real Estate Business

Frank K. Cooper Real Estate #1, Inc. v. Cendant Corp. and Century 21 Real Estate Corporation (N.J. Super. Ct. L. Div., Morris County, New Jersey). Frank K. Cooper Real Estate #1, Inc. filed a putative class action against Cendant and Cendant’s subsidiary, Century 21 Real Estate Corporation (“Century 21”). The complaint alleges breach of certain provisions of the Real Estate Franchise Agreement entered into between Century 21 and the plaintiffs, the implied duty of good faith and fair dealing, fraud and certain express and implied fiduciary duties. The complaint alleges, among other things, that Cendant diverted money and resources from Century 21 franchisees and allotted them to NRT owned brokerages. On October 29, 2002, the plaintiffs filed a second amended complaint adding a count against Cendant as guarantor of Century 21’s obligations to its franchisees. On June 30, 2006, the court denied plaintiffs’ motion to certify a class. Three motions were filed with the court in 2009: a renewed class certification motion; the motion to strike class allegations from the complaint, and the motion to dismiss plaintiffs’ pre-1998 claims because there is no class representative for any such claim. Oral argument was held on October 23, 2009 and further oral argument on the motions was heard on April 9, 2010. On August 17, 2010, the court granted plaintiffs’ renewed motion to certify a class, and denied in whole or in part the other motions. The certified class includes all Century 21 franchisees between August 1, 1995 and April 17, 2002 whose franchise agreements contain a New Jersey choice of law and a New Jersey choice of venue provision who have not executed releases releasing the claim (other than in the context of a renewal of their franchise agreement). On September 7, 2010, Century 21 filed motion for leave to file an interlocutory appeal of the class certification order. On October 15, 2010, the Appellate Division of the New Jersey Court denied Cendant’s and Century 21’s motion for leave to file an interlocutory appeal of the class certification order. This case was originally filed in 2002, but with the recent class certification is now just entering the discovery phase. This class action involves substantial, complex litigation. While we will vigorously defend this case and believe the allegations are without merit, class action litigation is inherently unpredictable and subject to significant uncertainties. The resolution of this litigation could result in substantial losses to the Company and we cannot assure you that such resolution will not have a material adverse effect on our results of operations, financial condition or liquidity.

Larpenteur v. Burnet Realty, Inc., d/b/a Coldwell Banker Burnet, and Burnet Title, Inc. , No. 27 CV 0824562 (Hennepin County District Court, Minnesota). Plaintiffs had alleged that with respect to the Company’s Minnesota operations, NRT’s affiliated business relationship with TRG and the practice of referring business to TRG violates the brokerage’s fiduciary duty as a broker and sales agent to its customers. Plaintiffs also alleged that there are lower cost comparable alternatives to TRG’s Burnet Title and that recommending the higher costing Burnet Title was a breach of duty. The complaint further alleged that the brokerage was unjustly enriched as a result of the affiliated business relationship. As to Burnet Title, the complaint alleged that it aided and abetted the breach of the Company’s fiduciary duty to the customer. As previously disclosed, by decision, dated March 10, 2010, the court denied class certification. In late May 2010, NRT and TRG agreed to pay a de minimis amount to settle this matter and end the litigation.

Proa, Jordan and Schiff v. NRT Mid-Atlantic, Inc . d/b/a Coldwell Banker Residential Brokerage et al. (Case No. 1:05-cv-02157 (AMD), U.S.D.C., District of Maryland, Northern Division). On October 18, 2010, the Fourth Circuit of the U.S. Court of Appeals affirmed the District Court’s summary judgment decision in May 2009 in favor of defendant NRT and its dismissal of the case, subject to Plaintiffs’ right to appeal. The summary judgment decision denied claims by real estate agents engaged as independent contractors by NRT, which alleged employment discrimination on a common law employee theory.

The Company believes that it has adequately accrued for such legal matters as appropriate or, for matters not requiring accrual, believes that they will not have a material adverse effect on its results of operations, financial position or cash flows based on information currently available. However, litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits can be costly to defend and, depending on the class size and claims, could be costly to settle. Lastly, there may be greater risk of unfavorable resolutions in the current economic environment due to various factors including the absence of other defendants (due to business failures) that may be the real cause of the liability and greater negative sentiment toward corporate defendants. As such, the Company could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.

Regulatory Proceedings

On July 15, 2010, Cendant and the IRS agreed to settle the previously disclosed IRS examination of Cendant’s taxable years 2003 through 2006. Pursuant to the IRS settlement, Tax Sharing Agreement and a letter agreement executed with Wyndham on July 15, 2010, Realogy agreed to pay a total of approximately $48 million, excluding estimated interest, to reimburse Cendant for a portion of the amount payable by Cendant to the IRS and Wyndham for certain tax credits used under the IRS settlement. In the third quarter of 2010, Realogy paid $58 million, including interest, to Cendant and Wyndham.

Item 5.

Other Information

Amended and Restated Domus Holdings Corp. 2007 Stock Incentive Plan

On November 9, 2010, the Board of Directors of our indirect parent company, Domus Holdings Corp. (“Holdings”) further amended and restated the Domus Holdings Corp. Amended and Restated 2007 Stock Incentive Plan (the “Plan”). Specifically, the Plan was amended such that termination for Cause (as defined therein) explicitly covers a material breach of Realogy’s Code of Conduct or other key policies without the need to show proof of harm. The Board of Directors also amended the Plan to make administrative changes (i) to give authority to approve Plan amendments to Holdings’ Board of Directors, its Compensation Committee or its Executive Committee, and (ii) to allow for delegation of administrative decisions and findings to management, except for decisions pertaining to the Chief Executive Officer, certain members of executive management and Directors. Reference is made to “Item 11—Executive Compensation—Stock Incentive Plan” of Realogy’s Form 10-K for the year ended December 31, 2008 for a description of other elements of the Plan.

A copy of the Plan is attached hereto as an Exhibit and is incorporated herein by reference. The foregoing description of the Plan amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan.

Employee Option Exchange

On November 8, 2010, Holdings concluded an offer to our eligible employees to exchange all of their respective outstanding options to purchase Holdings common stock (the “Original Options”) for an equal number of new stock options with different terms to be issued following the completion of the exchange offer (the “New Options”). The offer commenced on October 8, 2010 and was made pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. Each of the outstanding Original Options has an exercise price per share of $10.00, substantially all of which were granted in 2007 in connection with Apollo’s acquisition of the Company. On November 9, 2010, 10,159,000 Original Options were tendered and exchanged for an equal number of New Options. After giving effect to the exchange offer, 5,090,500 Original Options remain outstanding (including 5,050,000 Original Options held by non-employees who were not eligible to participate in the exchange offer).

The New Options were issued under the Plan (as amended and restated as of November 9, 2010) and have the same terms as the Original Options, except as follows: (i) the exercise price of the New Options (other than

those issued to Realogy’s Chief Executive Officer, the other named executive officers and the Chief Executive Officer’s three other direct reports, who are referred to herein as the “Senior Executives”) is $0.83 per share, representing the fair market value per share of Common Stock of Holdings as determined by its Compensation Committee as of the date of grant of the New Options; (ii) the exercise price of 70% of the New Options issued to the Senior Executives is $0.83 per share, and the exercise price of the remaining 30% of the New Options granted to the Senior Executives is $5.50 per share; (iii) each New Option expires on the tenth (10th) anniversary of the New Option grant date (unless it expires earlier in accordance with its terms); and (iv) each New Option vests as to twenty-five percent (25%) of the total shares subject to the New Option on each of the first (4) anniversaries of July 1, 2010.


Name	No. of New Options
Richard A. Smith, President and Chief Executive Officer.		3,112,250
Anthony E. Hull, Executive Vice President, Chief Financial Officer and Treasurer		750,000
Kevin J. Kelleher, President and Chief Executive Officer of Cartus Corporation		600,000
Alexander E. Perriello, III , President and Chief Executive Officer, Realogy Franchise Group		750,000
Bruce Zipf, President, President and Chief Executive Officer, NRT		600,000

A copy of the form of New Option Agreement is attached hereto as an Exhibit and is incorporated herein by reference. The foregoing description of the New Option Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Option Agreement.

Realogy 2011-2012 Multi-Year Retention Plan

On November 4, 2010, the Compensation Committee of the Board of Directors of Holdings approved the Realogy 2011-2012 Multi-Year Retention Plan (the “2011-2012 Retention Plan”) to retain Realogy’s named executive officers as well as other key personnel principally within its Corporate Services unit and the corporate offices of Realogy’s four business units. The 2011-2012 Retention Plan provides for retention payments in four equal semi-annual installments during 2011 and 2012 (estimated to be approximately $17.5 million for each installment), based upon an employee’s continued employment in good standing. The 2011-2012 Retention Plan was implemented to guarantee certain payments to key employees in 2011 and 2012, given the current economic conditions, including the decline in actual and pending home sales in the second half of 2010 and the uncertainty created by the disruptions in the foreclosure review process. In connection with the adoption of the 2011-2012 Retention Plan, the Compensation Committee terminated the existing 2010 annual bonus plans covering corporate personnel, including the Realogy 2010 Executive Annual Bonus Plan – the annual plan under which the named executive officers had participated. The Compensation Committee also terminated the Amended and Restated 2009 Multi-Year Executive Retention Plan, which covered all of the Senior Executives other than the Chief Executive Officer.

Under the 2011-2012 Retention Plan, subject to their continued employment in good standing, the named executive officers are entitled to receive four equal semi-annual retention payments, each in the following respective amounts:


Name	Semi-Annual Retention Payment
Richard A. Smith	$	1,000,000
Anthony E. Hull		262,500
Kevin J. Kelleher		208,000
Alexander E. Perriello, III		260,000
Bruce Zipf		260,000

A copy of the 2011-2012 Retention Plan is attached hereto as an Exhibit and is incorporated herein by reference. The foregoing description of the 2011-2012 Retention Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2011-2012 Retention Plan.

Item 6.

Exhibits

See Exhibit Index.

SIGNATURES

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


	REALOGY CORPORATION

Date: November 9, 2010		/s/ Anthony E. Hull
		Anthony E. Hull
		Executive Vice President and Chief Financial Officer

Date: November 9, 2010		/s/ Dea Benson
		Dea Benson
		Senior Vice President, Chief Accounting Officer and Controller

EXHIBIT INDEX


Exhibit		Description

10.1		Closing Agreement dated as of August 19, 2010, between Credit Agricole Corporate and Investment Bank, Cartus Limited, UK Relocation Receivables Funding Limited, Realogy Corporation, LMA S.A., and Cartus Financing Limited.

10.2		Deed of Assignment and Termination dated as of August 19, 2010, between UK Relocation Receivables Funding Limited, Cartus Limited, Cartus Services Limited and Cartus Funding Limited.

10.3		Deed of Release dated as of August 19, 2010, between Credit Agricole Corporate and Investment Bank, Cartus Limited, UK Relocation Receivables Funding Limited, Realogy Corporation and LMA S.A.

10.4		Realogy 2011-2012 Multi-Year Retention Plan.

10.5		Domus Holdings Corp. Amended and Restated 2007 Stock Incentive Plan (as amended as of November 9, 2010).

10.6		Form of Non-Qualified Stock Option Agreement for Employee Time-Vested Option Awards.

31.1		Certification of the Chief Executive Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2		Certification of the Chief Financial Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 10.1

DATED 19 August 2010

CARTUS LIMITED

CARTUS FUNDING LIMITED

CARTUS SERVICES LIMITED

UK RELOCATION RECEIVABLES FUNDING LIMITED

REALOGY CORPORATION

LMA S.A.

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

And

CARTUS FINANCING LIMITED

CLOSING AGREEMENT

LOGO

ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP

107 CHEAPSIDE

LONDON EC2V 6DN

CLOSING AGREEMENT is made on 19 August 2010

BETWEEN:

(1)	CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK , acting in its capacity as security trustee (for itself and the secured parties), arranger, administrative agent, calculation agent and lender (the “ Bank ”);

(2)

CARTUS LIMITED (“ CL ”), a company incorporated in England and Wales (company number 01431036) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS; CARTUS FUNDING LIMITED (“ CF ”), a company incorporated in England and Wales (company number 01826077) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS; CARTUS SERVICES LIMITED (“ CSL ”), a company incorporated in England and Wales (company number 01389936) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS ( each a “ Seller ” and together the “ Sellers ”);

(3)	UK RELOCATION RECEIVABLES FUNDING LIMITED , a company incorporated in England and Wales (company number 5568806) whose registered office is at 35 Great St. Helen’s, London EC3A 6AP (the “ Borrower ”);

(4)	REALOGY CORPORATION , a corporation formed and existing under the laws of Delaware (the “ Parent ”);

(5)

LMA S.A. , a limited company with a management board and supervisory board ( société anonyme à directoire et à conseil de surveillance ) incorporated under French law, having its registered office at 9 Quai du Président Paul Doumer, 92920 Paris la Défense Cédex, France and registered with the Trade and Companies Registry of Nanterre ( Registre du Commerce et des Soci é t é s de Nanterre ) under the number 383275187 (the “ Note Purchaser ”); and

(6)	CARTUS FINANCING LIMITED (“ CFL ”), a company incorporated in England and Wales (company number 07328652) whose registred office is at Frankland Road, Blagrove, Swindown, Wiltshire, United Kingdom SN5 8RS.

BACKGROUND

(A)	The Borrower has determined to repay all amounts outstanding under the Financing Agreement on the Settlement Date.

(B)

The Borrower has agreed with the Sellers to assign to CL all receivables owned by the Borrower on the Settlement Date and to the termination of trust interests in respect of which the Borrower is the beneficiary on such date in consideration of the payment of the Reassignment Purchase Price and subject to release of the security arrangements entered into with the Bank and the termination of the Financing Agreement and other Finance Documents relating thereto on such date.

(C)

CFL has agreed to purchase from CL its interest in certain receivables relating to a contract entered into between CL and the Secretary of State for Defence (the “ MOD Contract ”) on the Settlement Date in consideration of the payment of the Contract Purchase Price and subject to the release of the security arrangements entered into with the Bank.

(D)

Lloyds has agreed to provide to CFL a secured revolving loan facility (the “ Facility ”) under which it is a condition to the obligations of Lloyds under that Facility that the Bank has agreed to discharge the security arrangements entered into by the Borrower with the Bank in accordance with the Deed of Release.

(E)

The Sellers, the Borrower and the Parent have agreed with the Bank and LMA, upon the terms and subject to the conditions of the Deed of Release, on the Settlement Date, with effect from the service of written notice to the Borrower certifying that all Amounts Outstanding have been unconditionally received in immediately available funds and credited to the account referred to in Clause 2.1 of the Deed of Release for value on the Effective Date, to terminate the Note Issuance Facility Agreement and the related Transaction Documents (as defined in the master schedule of definitions, interpretations and construction originally dated 4 April 2007 (as subsequently amended and restated) (the “ Schedule of Definitions ”)) (the Note Issuance Facility Agreement and the related Transaction Documents together being the “ Finance Documents ”).

(F)

On the Settlement Date with effect from the termination of the Finance Documents as described in Recital (E) and otherwise on the basis set out in the Deed of Release the Bank has agreed to unconditionally and irrevocably release and discharge the security created under the security agreements, dated 12 May 2008 (as amended and restated) between the Bank and each of the Sellers (the “ Cartus Security Agreements ”) and to release and discharge the security created under the purchaser security agreement, dated 4 April 2007 (as amended and restated) and a purchaser supplemental security agreement dated 12 May 2008 between the Bank and the Borrower (the “ UKRRFL Security Agreements ”) in each case as described in the Deed of Release and to release and discharge the Parent from its undertaking pursuant to a parent undertaking agreement, dated 4 April 2007 (as amended and restated) between the Bank and the Parent (the “ Parent Undertaking ”).

IN THIS DEED it is agreed that:

1.	DEFINITIONS AND INTERPRETATION

1.1	Definitions

1.2	“ Amounts Outstanding ” (i) all amounts which are accrued due from the Borrower to the Note Purchaser or the Bank, up to and including the Effective Date, under the Finance Documents and (ii) the principal amount outstanding under the Note Purchase Facility Agreement .

“ Chargor ” means any of the Sellers, the Borrower or the Parent as applicable.

“ Contract Purchase Price ” means £14,159,992

“ Deed of Release ” means the deed of release entered into on or around the date hereof between the Bank, the Sellers, the Borrower, the Parent and the Note Purchaser.

“ Financing Agreement ” means the note issuance facility dated 12th May 2008, as amended and restated (the “ Note Issuance Facility Agreement ”)).

“ Lloyds ” means Lloyds TSB Bank plc.

“ Purchaser Account ” means the account of the Borrower sort code 20-00-00, account number 50251194 with Barclays Bank.

“ Reassignment Purchase Price ” means £12,343,606.45.

“ Released Assets ” means the Seller and the Borrower assets released pursuant to the Deed of Release.

“ Relevant Time ” means 10.00am, London Time (or such later time as the Bank and Cartus Limited may agree).

“ Security Agreements ” means the Cartus Security Agreements and the UKRRFL Security Agreements.

“ Settlement Date ” means Monday 23rd August 2010.

2.	REQUIREMENTS TO CLOSING

2.1	The Bank, LMA and the Borrower confirm that the amount of £12,343,606.45 constitutes the Amounts Outstanding under the Finance Documents on the Settlement Date.

2.2	CFL confirms that it has entered into a Facility with Lloyds in an amount sufficient to allow for the financing of the Contract Purchase Price.

2.3	Each of CFL, the Sellers, the Parent and the Borrower confirms that subject to satisfaction of the closing steps set out in Clause 3 it has approved the transactions and related transaction documents the subject of this Closing Agreement.

2.4	Lloyds confirms that subject only to finalisation of the documents and transactions the subject of this Closing Agreement it has received or waived all conditions precedent applicable to drawing of an amount in respect of the Contract Purchase Price on the Settlement Date under the Facility.

2.5	Each party has authorised and agrees to each of the steps as set out in Clause 3 taking effect as set out therein.

3.	CLOSING STEPS

Subject to Clause 2 the parties will proceed with the transactions set out below in the following order:

3.1	CFL confirms to each of the parties hereto that to commence the closing steps, it will ensure funding in an amount of £14,159,992 is available from Lloyds or the Parent to arrive by the Relevant Time to CFL or as CFL may direct pursuant to this agreement.

3.2	CFL, confirms to each of the parties hereto that in satisfaction of its obligations to pay the Contract Purchase Price to CL, it has directed payment of an amount equal to the Contract Purchase Price to CL or to such person or account as CL may direct pursuant to this Agreement.

3.3	CL confirms to each of the parties hereto that in satisfaction of its obligations to pay the Reassignment Purchase Price to the Borrower, it has hereby directed payment of the amount paid to it or to its direction under Clause 3.2 as follows:

(a) an amount equal to the Reassignment Purchase Price to the Borrower’s Purchaser Account; and

(b) the remainder to CL at its operating account with sort code 30-98-41 and account number 00478505 with Lloyds TSB Bank plc.

3.4

The Borrower confirms to each of the parties hereto that subject to receipt of the amounts specified in Clause 3.3 it will apply amounts standing to its Purchaser Account in payment of Amounts Outstanding to LMA and the Bank in accordance with Clause 2 of the Deed of Release, such amounts to be paid not later than 11:00am London time, or such later time as the Bank and CL may agree.

3.5

Subject to there being an amount equal to the Amounts Outstanding standing to the credit of the Purchaser Account in immediately available funds by no later than the Relevant Time on the Settlement Date, the Bank and LMA agree to apply such amounts in satisfaction of all Amounts Outstanding on such date by transferring such amount to the accounts of LMA and the Bank specified in the Deed of Release.

3.6

The Bank confirms that it is obliged to notify the Borrower as soon as practicable and in any event no later that 2 hours after Barclays Bank has confirmed to the Bank that an amount in respect of the Amounts Outstanding has been received and credited to those accounts as described in Clause 2.2 of the Deed of Release, whereupon the Released Assets will be discharged and released from any and all the Security created pursuant to the Security Agreements and the Parent will be discharged and released from the Parent Undertaking in accordance with the Deed of Release and each of the Finance Documents shall be terminated subject to survival of terms expressed to survive a termination of such agreement.

3.7	Immediately following such discharge and release, the Borrower shall complete the transfer to CL of the right, title and interest in the receivables and terminate its trust interests in respect of the receivables held by it on the Settlement Date.

3.8	Immediately following such transfer, CL shall complete the assignment to CFL of the receivables or the trust interests in respect of the receivables agreed to be transferred by it.

4.	FURTHER ASSURANCE AND NON SEVERABILITY

Each of the Parties agrees to do all such things and execute such further documents as may reasonably be requested by any other party to give effect to the subject and intention of this Agreement, provided that in the case of the Bank and the Note Purchaser, this obligation shall

be limited to matters required to give effect to Clause 3.7. Any cost to the relevant signatory complying with the request shall be borne by CL unless otherwise agreed by the signatory making such request.

By signing a copy of this Agreement each party agrees that it will not by any act or omission prevent or frustrate the occurrence of the events specified in Clause 3 provided that in the case of the Bank and the Note Purchaser, this obligation shall not apply to Clauses 3.1 to 3.4 (inclusive) and Clause 3.8. The events specified in Clause 3 are not severable and no party shall be entitled to require the performance by any other party of any one of the events without performance by all parties of the others.

5.	INDEMNITY

In consideration of the Bank and LMA entering into this Closing Agreement If an amount equal to the Amounts Outstanding is either:

(a)

not standing to the credit of the Purchaser Account by no later than the Relevant Time on the Settlement Date as contemplated by Clause 3.5 (as to which it is understood by the other parties that the Bank and the Note Purchaser have made no investigation, and take no responsibility, as to whether the transactions provided for in Clauses 3.1 to 3.4 (inclusive) will result in such amount standing to the credit of the Purchaser Account by that time on that date); or

(b)

if the necessary funds are not available in the Note Purchaser’s Account by 11.00am London Time on that date,

the Borrower will at its sole discretion either:

(a)

roll the commercial paper which funds the amount advanced under the Note Purchase Facility Agreement which is due to mature on the Settlement Date for a period of 30 days by issuing new commercial paper in accordance with its usual practice for the transaction; or

(b)

refrain from rolling over that commercial paper and draw on a liquidity facility made available by the Bank to the Borrower to fund the maturing commercial paper, and CL hereby unconditionally and irrevocably undertakes to indemnify each of the Bank and the Note Purchaser on demand on an after tax basis against any cost, loss, premium, expense or liability incurred by the Bank or the Note Purchaser as a result of such funds not being available in the Note Purchaser’s account by such time on such date (unless such funds not being available in the Note Purchaser’s account by such time on such date is caused by breach of the Finance Documents or gross negligence on the part of the Bank or the Note Purchaser) including, but not limited to, all amounts payable by the Borrower to the Bank under the liquidity facility.

6.	COUNTERPARTS

This Agreement may be executed in any number of counterparts, and by each party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument.

7.	GOVERNING LAW

This Deed and any non-contractual obligations arising out of or in relation to this Agreement shall be governed by, and construed in accordance with, English law.

8.	THIRD PARTIES

The terms of this Agreement may be enforced only by a party to it and the operation of the Contracts (Rights of Third Parties) Act 1999 is excluded.

The Parties have shown their acceptance of the terms of this Agreement by executing this document as set out below.


SIGNED by	)
CARTUS LIMITED	)
acting by	)	Robert Abbott
a director and authorised signatory	)	Director
	)
and acting by	)
	)	Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

SIGNED by	)
CARTUS FUNDING LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	)	Director
	)
and acting by	)	/s/Jeremy Spring
	)	Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

SIGNED by	)
CARTUS SERVICES LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	)	Director
	)
and acting by	)	/s/Jeremy Spring
	)	Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

SIGNED by	)
UK RELOCATION RECEIVABLES FUNDING LIMITED	) )
acting by SFM Directors Limited	)	/s/Claudia Wallace
a director and authorised signatory	) )	Claudia Wallace Director

and acting by SFM Directors (No.2) Limited	) )	/s/Abu Kapadia Abu Kapadia
a director/company secretary and authorised signatory	)	Director/Company Secretary


SIGNED by	)
REALOGY CORPORATION	)
a company organised and existing under the laws of the State of Delaware	) )	/s/Anthony E. Hull Anthony E. Hull
acting by	)	Director/Authorised Signatory
	) )
and	)	Director/Authorised Signatory
being persons who, in accordance with the laws of that territory, are acting under the authority of the company

SIGNED by	)
LMA S.A.	)	/s/Richard Sinclair
acting by	)	Richard Sinclair
an authorised signatory	) )	Authorised/Signatory

SIGNED by	)
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, LONDON BRANCH	) )
acting by	) )	/s/Glen Barnes Glen Barnes
and	) )	Director/Authorised Signatory
	)	/s/Mark Wolf
an authorised signatory	)	Mark Wolf
		Director/Authorised Signatory

SIGNED by	)
CARTUS FINANCING LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	) )	Director
and acting by	) )	/s/Jeremy Spring Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

Exhibit 10.2

DATED 19 AUGUST 2010

UK RELOCATION RECEIVABLES FUNDING LIMITED

and

CARTUS LIMITED

and

CARTUS FUNDING LIMITED

DEED OF ASSIGNMENT AND TERMINATION

LOGO

ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP

107 CHEAPSIDE

LONDON EC2V 6DN

THIS DEED is made on 19 August 2010

BETWEEN:

(1)	UK RELOCATION RECEIVABLES FUNDING LIMITED with company number 5568806, whose registered office is 35 Great St. Helen’s, London EC3A 6AP (“ UKRRFL ”); and

(2)	CARTUS LIMITED with company number 01431036, whose registered office is Frankland Road, Blagrove, Swindon, Wiltshire SN5 8RS (“ CL ”); and

(3)	CARTUS SERVICES LIMITED with company number 01389936, whose registered office is Frankland Road, Blagrove, Swindon, Wiltshire SN5 8RS (“ CSL ”); and

(4)	CARTUS FUNDING LIMITED with company number 01826077, whose registered office is Frankland Road, Blagrove, Swindon, Wiltshire SN5 8RS (“ CF ”).

BACKGROUND

(A)

Pursuant to a receivables transfer agreement and trust deed originally dated 4th April 2007 (as subsequently amended and restated) CL, CSL and CF (together, the “ Sellers ”) sold and assigned to UKRRFL certain assignable receivables and established a trust in favour of UK RRFL in respect of certain non assignable receivables in each case owing to the Sellers (the “ Receivables Transfer Agreement ”).

(B)

Pursuant to the terms of this Deed, in return for the consideration set out in clause 2 hereof UKRRFL will assign its rights, title and interest in all receivables transferred to UK RRFL and terminate the trust interests created in its favour in respect of the Non-Assignable receivables pursuant to the terms of the Receivables Transfer Agreement.

(C)

Subject to payment of the consideration set out in clause 2 the rights and obligations of the Parties under the Receivables Transfer Agreement and the Receivables Servicing Agreement will terminate from the Closing Date provided that such termination shall be without prejudice to rights accrued to such date.

1.	DEFINITIONS

1.1	In this Deed, including the Recitals, the following expressions shall have the following meanings:

“ Assigned Receivables ” means receivables transferred to and held by the Assignor pursuant to the terms of the Receivables Transfer Agreement.

“ Affected Assets ” has the meaning given to it under the Receivables Transfer Agreement.

“ Category 1 Non-Assignable Receivables ” has the meaning given to it in the Receivables Transfer Agreement”.

“ Category 1 Non-Assignable Receivables Trust ” means the trust created pursuant to clause 2.2 of the Receivables Transfer Agreement under which the Sellers held all rights, title and interest in the Category 1 Non-Assignable Receivables for the benefit of the UKRRFL.

“ Category 2 Non-Assignable Receivables ” has the meaning given to it in the Receivables Transfer Agreement”.

“ Category 2 Non-Assignable Receivables Trust ” means the trust created pursuant to clause 2.3 of the Receivables Transfer Agreement under which the Sellers held all rights, title and interest in the Category 2 Non-Assignable Receivables for the benefit of the UKRRFL.

“ Closing Date ” means 23 August 2010.

“ Deed or this Deed ” means this Deed of Assignment and Termination.

“ Purchase Price ” means £12,343,606.45.

“ Receivables ” means the Assigned Receivables, the Category 1 Non-Assignable Receivables and/or the Category 2 Non-Assignable Receivables (as the case may be).

“ Receivables Servicing Agreement ” means the agreement originally dated 4th April 2007 (as subsequently amended and restated) entered into between the UKRRFL, the CL and Credit Agricole Corporate and Investment Bank, London Branch relating to the servicing of the Receivables.

2.	CONSIDERATION AND PAYMENT

2.1

In consideration of the assignments and the termination or transfer of trust interests in the Receivables described in clause 3 CL shall pay to UKRRFL the Purchase Price on the Closing Date. The Sellers and UKRRFL agree that the Purchase Price shall be inclusive of all value added tax or other taxes relating to the Receivables. From the Closing Date and subject to payment of the Purchase Price UKRRFL shall have no further right, title or interest in any Assigned Receivables or any assets the subject of the Category 1 Non-Assignable Receivables Trust or the Category 2 Non-Assignable Receivables Trust.

2.2

The obligations of the parties contained in the Deed are conditional upon the rights and interests to be transferred or terminated by this Deed having been released from any encumbrance or security interest in favour of Credit Agricole Corporate and Investment Bank and LMA S.A. with effect on the Closing Date.

3.	ASSIGNMENT AND TRUSTS

On and subject to payment of the Purchase Price as set out in clause 2:

3.1	UKRRFL with full title guarantee hereby sells and assigns and CL hereby purchases all of the rights, title and interest held by UKRRFL in, to and under the Assigned Receivables existing at the Closing Date and all other related Affected Assets at such date;

3.2

UKRRFL agrees that all its right, title and interest in, to and under the trusts created by CL in respect of the Category 1 Non-Assignable Receivables and the proceeds of the Assignable Receivables, the Category 1 Non-Assignable Receivables and the Category 2 Non-Assignable Receivables and all other related Affected Assets in each case existing at the Closing Date shall be terminated as of the Closing Date and CL shall be entitled to all such right title and interest in its own right; and

3.3

UKRRFL and the Sellers (other than CL) agree that all the right, title and interest of UKRRFL in, to and under the trusts created by the Sellers (other than CL) in respect of the Category 1 Non Assignable Receivables and the proceeds of the Assignable Receivables, the Category 1 Non-Assignable Receivables and the Category 2 Non-Assignable Receivables, and all other related Affected Assets in each case in favour of UKRRFL existing at the Closing Date shall be terminated as of the Closing Date and the Sellers (other than CL) agree to hold such right, title and interests in trust in favour of and on behalf of CL.

4.	TERMINATION OF AGREEMENTS

4.1

UKRRFL and the Sellers agree that subject to payment of the Purchase Price and the transfers described in clause 3 the obligations of the parties under the Receivables Transfer Agreement and the Receivables Servicing Agreement will cease and are hereby terminated as of the Closing Date provided that such termination shall be subject to all rights accrued at the Closing Date.

5.	NOTICES

5.1

A demand or notice hereunder shall be in writing signed by an officer or agent of any party and may be served on the other party by hand or by post or by e-mail and in the case of service by hand either by delivering the same to any officer of that party at any place or leaving the same addressed to that party at its registered office or a place of business last known to the party issuing the notice. If such demand or notice is sent by post or by fax it shall be deemed to have been received (if posted) on the day following the day on which it was posted and (if sent by e-mail) at the time of transmission but shall not be effective if a transaction failure notification is received. The party issuing the notice may use the last contact address of the other party known to it and transmission may be proved by production of an activity or sent transmission report.

COSTS

6.1	CL shall indemnify UKRRFL for all costs and expenses (including legal fees) and VAT thereon which are incurred by UKRRFL in the preparation and execution of this Deed and any document to be delivered pursuant to this Deed and in the enforcement and preservation of UKRRFL’s rights under this Deed.

7.	COUNTERPARTS

7.1	This Deed may be executed in any number of counterparts and this shall have the same effect as if the signatures on the counterparts were on a single copy of this Deed.

8.	ASSIGNMENTS AND TRANSFERS

8.1	This Deed and any non contractual rights or obligations arising therefrom shall be binding upon and enure for the benefit of each party and its successors and assigns.

9.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

9.1	No person who is not a party to this Deed has any right under the Contracts (Rights of Third Parties) Act (1999) to enforce any term of this Deed, but this does not effect any right or remedy of that person which exists or is available apart from that Act.

10.

GOVERNING LAW

10.1	This Deed and any non contractual rights or obligations arising therefrom shall be governed by and construed in accordance with English Law.

This Deed has been executed by each party as a deed, and is intended by the parties to be delivered as a deed, on the date appearing at the head of page 1 hereto.

EXECUTION


Executed and Delivered	)
as a Deed	)	/s/Claudia Wallace
by UK RELOCATION RECEIVABLES	)	Claudia Wallace
FUNDING LIMITED	)	Director
Acting by SFM Directors Limited	)
a director and authorised signatory	)
and acting by SFM Directors (No.2)	)
Limited	)
a director/ secretary and authorised	)	/s/Abu Kapadia
signatory	)	Abu Kapadia
		Director/Secretary

Executed and Delivered	)
as a Deed	)
by CARTUS LIMITED	)	/s/Robert Abbott
Acting by	)	Robert Abbott
a director and authorised signatory	)	Director
and acting by	)
a director/ secretary and authorised	)	/s/Jeremy Spring
signatory	)	Jeremy Spring
		Director/Secretary

Executed and Delivered	)
as a Deed	)
by CARTUS SERVICES LIMITED	)	/s/Robert Abbott
Acting by	)	Robert Abbott
a director and authorised signatory	)	Director
and acting by	)
a director/ secretary and authorised	)	/s/Jeremy Spring
signatory	)	Jeremy Spring
		Director/Secretary

Executed and Delivered	)
as a Deed	)
by CARTUS FUNDING LIMITED	)	/s/Robert Abbott ...
Acting by	)	Robert Abbott
a director and authorised signatory	)	Director
and acting by	)
a director/ secretary and authorised	)	/s/Jeremy Spring
signatory	)	Jeremy Spring
		Director/Secretary

Exhibit 10.3

DATED 19 August 2010

CARTUS LIMITED

CARTUS FUNDING LIMITED

CARTUS SERVICES LIMITED

UK RELOCATION RECEIVABLES FUNDING LIMITED

REALOGY CORPORATION

LMA S.A.

and

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

DEED OF RELEASE

LOGO

ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP

107 CHEAPSIDE

LONDON EC2V 6DN

THIS DEED OF RELEASE ( this “ Deed ” ) is made on 19 August 2010

BETWEEN:

(1)	CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK , acting in its capacity as security trustee (for itself and the secured parties), arranger, administrative agent, calculation agent and lender (the “ Bank ”);

(2)

CARTUS LIMITED , a company incorporated in England and Wales (company number 01431036) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS; CARTUS FUNDING LIMITED , a company incorporated in England and Wales (company number 01826077) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS; CARTUS SERVICES LIMITED , a company incorporated in England and Wales (company number 01389936) whose registered office is at Frankland Road, Blagrove, Swindon SN5 8RS ( each a “ Seller ” and together the “ Sellers ”);

(3)	UK RELOCATION RECEIVABLES FUNDING LIMITED , a company incorporated in England and Wales (company number 5568806) whose registered office is at 35 Great St. Helen’s, London EC3A 6AP (the “ Borrower ”);

(4)	REALOGY CORPORATION , a corporation formed and existing under the laws of Delaware (the “ Parent ”); and

(5)

BACKGROUND

(A)

Pursuant to the terms of the Financing Agreement the Bank (in various capacities) and LMA S.A. (as Note Purchaser) agreed to make available to the Borrower certain financing facilities. The Parties hereto have agreed, upon the terms and subject to the conditions herein, with effect from the Effective Date to terminate the Note Issuance Facility Agreement and the related Transaction Documents (as defined in the master schedule of definitions, interpretations and construction originally dated 4 April 2007 (as subsequently amended and restated) (the “ Schedule of Definitions ”)) (the Note Issuance Facility Agreement and the related Transaction Documents together being the “ Finance Documents ”).

(B)

By security agreements, dated 12 May 2008 (as amended and restated) between the Bank and each of the Sellers (the “ Cartus Security Agreements ”) the assets described in Schedule 1 hereto (the “ Seller’s Released Assets ”) were charged to the Bank to secure the performance of certain obligations under the Receivables Transfer Agreement, the Receivables Servicing Agreement and the Security Agreements.

(C)	By a purchaser security agreement, dated 4 April 2007 (as amended and restated) and a purchaser supplemental security agreement dated 12 May 2008 between the Bank and the

Borrower (the “ UKRRFL Security Agreements ”) the assets described in Schedule 2 hereto (the “ Borrower’s Released Assets ”) were charged to the Bank to secure repayment of all amounts payable to the Secured Creditors by the Borrower pursuant to the Finance Documents.

(D)

By a parent undertaking agreement, dated 4 April 2007 (as amended and restated) between, among others, the Bank and the Parent (the “ Parent Undertaking ”), the Parent, amongst other things, undertook to cause the due and punctual performance of the Supported Obligations (as defined in the Parent Undertaking) by each of the Sellers and the Servicer.

(E)

Subject to the Bank giving written notice to the Borrower confirming that all Amounts Outstanding owing to the Bank for its own account in any capacity and all Amounts Outstanding owing to the Note Purchaser have been unconditionally satisfied the Bank has agreed to release the Released Assets from the Security created pursuant to the Security Agreements, to release the Parent from all of its obligations created pursuant to the Parent Undertaking and to terminate the Finance Documents subject to and in accordance with this Deed.

IN THIS DEED it is agreed that:

1.	DEFINITIONS AND INTERPRETATION

1.1	Definitions

“Amounts Outstanding” has the meaning given to it in Clause 2.1.

“ Chargor ” means any of the Sellers, the Borrower or the Parent as applicable.

“ Effective Date ” means Monday 23 August 2010.

“ Financing Agreement ” means the receivables funding facility made between the Bank and the Borrower originally dated 4 April 2007 (and subsequently a note issuance facility dated 12th May 2008, as amended and restated).

“ Receivables Transfer Agreement ” means the receivables transfer agreement made between the Sellers and the Borrower and originally dated 4 April 2007 (as amended and restated).

“ Receivables Servicing Agreement ” means the receivables servicing agreement made between Cartus Limited, the Borrower and the Bank and originally dated 4 April 2007.

“ Released Assets ” means the Seller’s Released Assets and the Borrower’s Released Assets.

“ Relevant Time ” means 11:00am, London time or such later time as the Bank and Cartus Limited may agree.

“ Servicer ” means Cartus Limited.

“ Security ” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement entered into for a similar purpose.

“ Security Agreements ” means the Cartus Security Agreements and the UKRRFL Security Agreements.

2.	FINAL PAYMENT

2.1

Not later than the Relevant Time on the Effective Date the Borrower shall pay to the Bank in immediately available funds for value on the Effective Date (i) all amounts which are accrued due from the Borrower to the Note Purchaser or the Bank, up to and including the Effective Date, under the Finance Documents; and (ii) the principal amount outstanding under the Note Purchase Facility Agreement, by transfer of (i) £12,327,941 to LMA’s account held with CA-CIB Paris (SWIFT Code : BSUIFRPP ; Account Number : 31489 - 00010 - 00216104360) in respect of the principal and other amounts due in respect of the Notes; and (ii) £15,665.45 to the Bank’s account held with HSBC Bank plc (SWIFT Code : MIDLGB22 ; Sort Code :
50-10-32 ; Account number : 00492443) (being in aggregate £12,343,606.45, the “ Amounts Outstanding ”).

2.2

The termination of the Finance Documents as contemplated by this Deed is subject to, and conditional upon, the Bank giving written notice to the Borrower (in the form set out in Schedule 3) certifying that all Amounts Outstanding have been unconditionally received in immediately available funds and credited to the accounts referred to in Clause 2.1 for value on the Effective Date. The Bank undertakes to give such written notice to the Purchaser as soon as practicable and in any event no later that 2 hours after Barclays Bank has confirmed to the Bank that the Amounts Outstanding have been so received and credited.

3.	TERMINATION OF THE FINANCE DOCUMENTS

3.1	Subject to Clause 2, with effect from the Effective Date each of the parties hereto agrees that:

(a)

the Finance Documents shall be terminated; provided that, notwithstanding anything herein to the contrary, all terms and provisions in the Finance Documents that expressly survive a termination shall survive this termination; and

(b)

each of the parties hereto is released and discharged from further obligations or liabilities (if any) to each other party with respect to the Finance Documents and their respective rights against each other thereunder are cancelled.

4.	RELEASE

4.1

On termination of the Finance Documents in accordance with Clause 3.1 and on the basis that the Sellers, the Servicer and the Parent each hereby confirms to the Bank that it has received payment of, or waived irrevocably, all amounts accrued due to it under the Finance Documents and that the Borrower has no further liability of any kind to it under the Finance Documents, the Bank hereby unconditionally and irrevocably releases and discharges (i) all the Released Assets from any and all Security created pursuant to the Security Agreements

and reassigns and reconveys to each of the Sellers or, as applicable, to the Borrower all right, title and interest of the Bank in and to the Released Assets assigned, granted or transferred to it pursuant to the terms of the Security Agreements; and (ii) the Parent from its undertakings created pursuant to the Parent Undertaking.

5.	FURTHER ASSURANCE

Subject to the performance by the Borrower of its obligations under Clause 2.1, the Bank agrees, at the expense of the relevant Chargor, to do all such things and execute such further documents as may reasonably be required by the Chargor to give effect to the provisions of this Deed.

6.	COUNTERPARTS

This Deed may be executed in any number of counterparts, and by each party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument.

7.	GOVERNING LAW

This Deed and any non-contractual obligations arising out of or in relation to this Deed shall be governed by, and construed in accordance with, English law.

8.	THIRD PARTIES

The terms of this Deed may be enforced only by a party to it and the operation of the Contracts (Rights of Third Parties) Act 1999 is excluded.

SCHEDULE 1

Secured Assets means:

The assets subject to a fixed charge being all of the Seller’s right, title, interest and benefit, existing at the time of the Security Agreement and those created or existing thereafter in any freehold or leasehold properties wheresoever situated at the time of the Security Agreement or thereafter belonging to it;

The assets subject to a floating charge being, the whole of the Seller’s undertaking and assets existing at the time of the Security Agreement and those created or existing thereafter, other than assets validly and effectively charged or assigned by way of fixed security pursuant to paragraph 1 above; and

Any other Security granted by a Seller to the Bank pursuant to the Cartus Security Agreements.

SCHEDULE 2

Words and expressions defined in the UKRRFL Security Agreements shall have the same meanings in this Deed unless they are expressly defined herein.

Secured Assets means:

All of the Borrower’s right, title, interest and benefit (existing at the time of the UKRRFL Security Agreements and those created or existing thereafter) in, to and under:

(i)

the Affected Assets;

(ii)

Any Insurances relating to the Affected Assets; and

(iii)

the Transaction Documents, including the UKRRFL Security Agreements,

in each case, including all rights to receive payment of any amounts which became or may become payable to the Borrower, all payments received by the Borrower, all rights to serve notices and /or make demands and/or take such steps as are required to cause payments to become due and payable, under any of the same and all rights of action in respect of any breach of any of the same and all rights to receive damages or obtain other relief in respect of any of the same;

All of the Borrower’s right, title, interest and benefit existing now or in the future

(i)

as beneficiary of the Transaction Trust; and

(ii)

in the Transaction Trust Property; and

(iii)

as beneficiary of the trust declared pursuant to Clause 2.6 ( Payment of the Expenses of Realisation from the Transaction Trust Property ) of the Receivables Transfer Agreement; and

(iv)

in the Collection Account Trust Property; and

all of the Borrower’s right, title, interest and benefit, existing at the time of the UKRRFL Security Agreements and those created or existing thereafter, in and to all moneys, rights, powers and property whatsoever which may from time to time and at any time be distributed or derived from, or accrues on or relate to:

(v)

the Transaction Trusts; and

(vi)

the Transaction Trust Property; and

(vii)

the trust declared pursuant to clause 2.6 ( Declaration of Trust in respect of the Collection Accounts ) of the Receivables Transfer Agreement; and the Collection Account Trust Property,

in any way whatsoever including all rights to receive payment of any amount which became or may become payable to it thereunder and all payments received by it thereunder and also including, without limitation, all rights to serve notices and/or make demands and/or otherwise act thereunder and pursuant thereto and all rights of action in respect of any breach thereof and all rights to receive damages or obtain other relief in respect thereof;

The assets subject to a fixed charge being all of the Borrower’s right, title, interest and benefit, existing at the time of the Security Agreement and those created or existing thereafter in, to and under each bank account, including any Purchaser Account and all sums of money which existed at the time of the Security Agreement and those created or existing thereafter are from time to time, standing to the credit of any of those accounts together with all interest accruing form time to time on those balances and the debts represented by those balances and the benefit of all covenants relating to those accounts and all powers and remedies for enforcing the same;

The assets subject to a floating charge being the whole of the Borrower’s undertaking and assets existing at the time of the Security Agreement and those created or existing thereafter, other than assets validly and effectively charged or assigned by way of fixed security under or pursuant to the Security Agreement or any other Transaction Document;

All of the Borrower’s right, title, interest and benefit (existing at the time of the UKRRFL Security Agreements and those created or existing thereafter) in, to and under:

(viii)

the Security Agreement between Cartus Limited, the Funding Agent and the Borrower dated 12 May, 2008;

(ix)

the Security Agreement between Cartus Funding Limited, the Funding Agent and the Borrower dated 12 May 2008; and

(x)

the Security Agreement between Cartus Services Limited, the Funding Agent and the Borrower dated 12 May 2008,

in each case, including all rights to receive payment of any amounts which became or may become payable to the Borrower, all payments received by the Borrower, all rights to serve notices and/or make demands and/or to take such steps as are required to cause payments to become due and payable, under any of the same and all rights of action in respect of any breach of any of the same and all rights to receive damages or obtain other relief in respect of any of the same; and

Any other Security granted by the Borrower to the Bank pursuant to the UKRRFL Security Agreements.

SCHEDULE 3

From: CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, LONDON BRANCH

To: UK RELOCATION RECEIVABLES FUNDING LIMITED

CC: CARTUS LIMITED

Date: [ Insert ]

Dear Sirs,

1. We refer to the Deed of Release between, among others, you and us dated [ ] August 2010. Terms defined in, or incorporated by reference into, the Deed of Release shall have the same meanings in this notice.

2. Pursuant to Clause 2.3 of the Deed of Release, we hereby confirm that all Amounts Outstanding have been unconditionally received in immediately available funds and credited to the accounts referred to in Clause 2.1 of the Deed of Release for value on the Effective Date in accordance with Clause 2 of the Deed of Release.

Yours faithfully

authorised signatory for

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, LONDON BRANCH

EXECUTED as a deed and delivered on the date stated at the beginning of this Deed.


EXECUTED and delivered as a deed by	)
CARTUS LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	) )	Director
and acting by	) )	/s/Jeremy Spring Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

EXECUTED and delivered as a deed by	)
CARTUS FUNDING LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	) )	Director
and acting by	) )	/s/Jeremy Spring Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

EXECUTED and delivered as a deed by	)
CARTUS SERVICES LIMITED	)	/s/Robert Abbott
acting by	)	Robert Abbott
a director and authorised signatory	) )	Director
and acting by	) )	/s/Jeremy Spring Jeremy Spring
a director/company secretary and authorised signatory	)	Director/Company Secretary

EXECUTED and delivered as a deed by	)
UK RELOCATION RECEIVABLES FUNDING LIMITED	) )	/s/Claudia Wallace Claudia Wallace
acting by	)	Director
a director and authorised signatory	) )	Per pro SFM Directors Limited as Director
and acting by	) )	/s/Abu Kapadia Abu Kapadia
a director/company secretary and authorised signatory	)	Director/Company Secretary Per pro SFM Directors (No.2) Limited as Director


EXECUTED and delivered as a deed by	)
REALOGY CORPORATION	)
a company organised and existing under the laws of	)	/s/Anthony E. Hull
the State of Delaware	)	Anthony E. Hull
acting by	)	Director/Authorised Signatory
	) )
and	)	Director/Authorised Signatory
being persons who, in accordance with the laws of
that territory, are acting under the authority of the company

EXECUTED and delivered as a deed by	)
LMA S.A.	)	/s/Richard Sinclair
acting by	)	Richard Sinclair
an authorised signatory	) )	Authorised/Signatory

EXECUTED as a deed by	)
CRÉDIT AGRICOLE CORPORATE AND	)
INVESTMENT BANK, LONDON BRANCH	)
acting by	) )	/s/Glen Barnes Glen Barnes
and	) )	Director/Authorised Signatory
	)	/s/Marc Wolf
In the presence of	)	Marc Wolf
/s/ Sau-Ling Foong		Director/Authorised Signatory

Witness name: Sau-Ling Foong
Witness address: Credit Agricole CIB
Sappold Street London EC21-2DA

Exhibit 10.4

Realogy 2011–2012 Multi-Year Retention Plan

Plan Purpose

The Realogy 2011–2012 Multi-Year Retention Plan (the “Plan”) is designed to retain eligible employees, during a period of uncertainty impacting the Real Estate industry, and to preserve the benefit of their contributions to Realogy (“Realogy” or the “Company”) and its Business Units.

Eligibility

An employee who is eligible to participate in the Plan must meet the following criteria to be eligible for a Retention Plan payment:

•

In a Retention Plan eligible-position as listed on Schedule A.

•

Hired on or before October 1, 2010 or added by the Plan Administrator on or before October 1, 2011 as permitted in the “Individual Retention Plan Payment Value – Retention Payment Potential” below.

•

Actively employed and in good standing by Realogy or a subsidiary thereof at the time of the retention payment or on an approved Leave of Absence (LOA) that is covered under the Family Medical Leave Act (FMLA), unless otherwise required by law (see Disability/LOA section for more information). If the Company determines that at the time a retention payment is processed, a participant has violated any of the policies contained in the Realogy Code of Ethics or Key Policies and has failed to cure, to the extent such violation is curable, he/she is no longer an employee in good standing.

•

Successfully completes all mandatory training as determined by Executive Leadership within the specified time periods.

•

Has a current performance rating of “Meets Expectations” or “Exceeds Expectations on his/her annual performance evaluation at the time of each retention payment. An otherwise eligible employee who has a performance rating of “Below Expectations” or is on a Performance Improvement Plan at the time a retention payment is processed will be ineligible for that payment.

Individual Retention Plan Payment Value – Retention Payment Potential

Each Plan participant will be eligible for Retention Plan payments with the maximum potential retention payment calculated based on the following formula:

2010 Annual Bonus Plan Target Percentage X (multiplied by) Base Salary ⁽¹⁾ X (multiplied by) Two (2)

⁽¹⁾

At the time the participant was declared eligible for the Plan and subject to pro-ration and other adjustments described in the “Proration of Retention Payments” section

•

The maximum retention payment shall be subject to proration as described below in the “Proration of Retention Payments” section.

•

The Plan Administrator shall have the discretion to add employees deemed key to the Company if hired or promoted on or before October 1, 2011; provided, however any such employee shall be subject to the “Proration of Retention Payments” section below and the maximum retention payment potential for such employees shall be as provided in the “Distribution of the Retention Plan Payment Potential” section below.

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 1

Realogy 2011–2012 Multi-Year Retention Plan

•

The Plan Administrator may approve changes to the retention plan targets and/or payments resulting from eligible participants’ job transfers, promotions or any other job actions. The addition of new employees to the Plan will be effective only after receiving written (including email) confirmation of the change from the Plan Administrator or his or her designee.

Proration of Retention Payments

Retention Plan payment potential will be calculated according to the participant’s base salary at the time they are declared eligible to participate in the Plan. Participants that were not active Realogy employees on or before January 1, 2010 will receive pro-rated retention payments according to the schedule below.


Hire Date	Proration formula for Retention Plan payments made during 2011 ⁽²⁾	Proration formula for Retention Plan payments made during 2012 ⁽²⁾

Hired on or before 1/1/2010	No Proration	No Proration

Hired between 1/2/2010 and 10/1/2010	Retention payments prorated based on percentage of days participant was actively employed between 1/2/2010 and 12/31/2010	No Proration

Hired between 10/2/2010 and 10/1/2011	Not eligible for 2011 payments	Retention payments prorated based on percentage of days participant was actively employed between 1/1/2011 and 12/31/2011

⁽²⁾

Payments for participants on FMLA or any other unpaid leave of absence will also be prorated for the time they were actively employed during 2010 and/or 2011.

Distribution of the Retention Plan Payment Potential

The Retention Plan payment potential amounts subject to any proration adjustments or any other adjustments deemed necessary by the Plan Administrator will be distributed to eligible participants according to the following schedule.

⁽³⁾

Subject to proration as described in the above “Proration of Retention Payments” section

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 2

Realogy 2011–2012 Multi-Year Retention Plan

•

Employees added to the Plan after its adoption will receive retention payments based on the Proration of Retention Payments section above. The maximum Retention Payment Potential for employees added to the Plan after its adoption shall be his/her Annual Bonus Plan Percentage X (multiplied by) Base Salary at the time he/she is added to the Plan. Each retention payment thereafter will be 50% of the employee’s retention payment potential adjusted for any proration, payable in April and October 2012.

Processing of Retention Payments

There will be a total of four potential retention payments that will be paid on or about April 5, 2011, October 5, 2011, April 5, 2012 and October 5, 2012.

•

Each retention payment will be made using the same method of payment as the bi-weekly paychecks. If a participant receives a paper paycheck, the retention payment will be paid as a paper check. If the participant utilizes direct deposit, the retention payment will be electronically deposited.

•

Retention payments are subject to federal income tax withholding at a flat rate as prescribed by the Internal Revenue Service. Applicable FICA, state and local taxes will also be deducted as applicable.

•

Retention payments are not subject to deductions for 401(k) contributions or any other voluntary benefit deductions.

Status Changes

New Hires

•

See Eligibility Section.

Leave of Absence (LOA)

•

Subject to the provisions herein, participants on an approved LOA (excluding short-term disability) during 2010 or 2011 will be eligible for a pro-rated retention during the time that they were actively employed in the retention-eligible position.

•

Participants on an approved LOA that is covered under the FMLA at the time of the regular retention payment will be paid at the same time as the regular retention payment.

•

Participants on approved LOAs not covered by the FMLA at the time of the regular retention payment will not be eligible to receive retention payment unless and until they return to work, except as set forth below.

•

In the event of Total Disability, as defined under the terms of the Long Term Disability program, the participant will receive a pro-rated retention payment upon determination of Total Disability or at the time of the regular retention payment, whichever is later, based on the pro-rated base salary while actively employed in the Retention-Plan-eligible position.

Terminations

•

Participants who resign or are terminated for any reason other than death or disability, before the date of a retention payment, will be ineligible for any pending retention payments that have not been paid under this Plan or any other future payments, unless otherwise required by law or as determined by the Plan Administrator.

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 3

Realogy 2011–2012 Multi-Year Retention Plan

•

In the case of death, a pro-rated retention payment will be paid to the beneficiary designated by the participant under the group term life insurance plan, and in the absence of any such designation, the payment will be made according to classes as defined in the Company’s Term Life Insurance Plan. Payments will be pro-rated based on the time while actively employed in a retention-eligible position.

•

The retention payment will be based on the same parameters as those for other participants and will be paid at the same time as the regular retention payment.

Plan Administration

The Compensation Committee of Domus Holdings Corp., the parent company of Realogy (the “Compensation Committee”), has overall responsibility for, and has the maximum discretion permitted under the law over, the administration of the Plan and the interpretation of all of the Plan’s terms.

The Compensation Committee shall have the ability to increase the Retention Plan payment potential for key employees as it determines from time to time to achieve the Company’s retention objectives.

The administrator of the Plan (“Plan Administrator”) will be the Chief Administrative Officer or such other officer designated by the Compensation Committee of Domus Holdings Corp.

Amendment and Plan Termination

The Compensation Committee may, from time to time, amend the Plan in whole or in part, provided, however, that any such amendment may not reduce or delay payment of any retention payment that has become payable. This Plan may not be amended, modified or supplemented without the prior approval of the Compensation Committee.

On an Extraordinary Event, the Compensation Committee may terminate the Plan or suspend a retention payment under the Plan, provided however that any such Plan termination or suspension of a retention payment will comply with any notice provisions required by state law, and the Compensation Committee shall make every effort to eliminate any obstacles resulting from the Extraordinary Event, thereby minimizing to the greatest extent possible any adverse effects on Plan participants,

For purposes of the Plan, “Extraordinary Event” refers to any event, including, but not limited to, wars, natural disasters, or catastrophic economic injury of the Company, that is unforeseeable, and the occurrence and effect of which is unavoidable at the time of the adoption of the Plan.

Other Provisions

•

Any questions regarding the terms of the Plan or its interpretation should be referred to the Plan Administrator.

•

Subject to any applicable law, no benefit under the Plan shall be subject in any manner to, nor shall the Company be obligated to recognize, any purported anticipation, alienation, sale,

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 4

Realogy 2011–2012 Multi-Year Retention Plan

transfer (otherwise than by will or the laws of descent and distribution), assignment, pledge encumbrance, or charge and any attempt to do so shall be void. No such benefit shall in any manner be liable for or subject to garnishment, attachment, execution, or levy, or liable for or subject to the debts, contracts, liabilities, engagements or torts of the participant.

•

The Plan shall not be construed as conferring on a participant any right, title, interest, or claim in or to any specific asset, reserve, account, or property of any kind possessed by the Company. To the extent that as a participant or any other person acquired a right to receive payments from the Company, such right shall be no greater than the rights of an unsecured general creditor.

•

This Plan is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, and to the extent this Plan is not so exempt, to comply with Section 409A, and this Plan should be interpreted, administered and operated accordingly.

Employment at Will

An eligible employee’s employment with the Company is at will and is terminable at any time by either the Company or the employee, with or without cause, and with or without notice. The Plan shall not be construed to create a contract of employment between the Company and the eligible employee for any specified period of time.

Governing Law

The law of the State of New Jersey shall govern the interpretation, application and operation of this Plan document.

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 5

Realogy 2011–2012 Multi-Year Retention Plan

Schedule A


Business Unit		Position Eligibility ^(1,2)

CRP		All exempt employees

CRT		All Managers and above that are not eligible for a commission-based plan

NRT ⁽³⁾		Home Office All Home Office exempt employees Regional Regional Executive Vice Presidents, Regional Chief Operating Officers, Regional Support Center Department Heads, all other level 4 Support Center management and key contributors in level 5 in the functions of Operations and Finance & Accounting.

RFG		All exempt employees that are not eligible for a commission-based plan

TRG ⁽⁴⁾		All Home Office Managers and above, key direct operation’s positions, and IT employees in the following positions: Team Lead Project Lead/Sr. Project Lead Sr Systems Analyst Sr Information Protection Specialist Information Protection Specialist Sr Database Administrator Sr Project Specialist Sr Tech Svcs Specialist

⁽¹⁾

Employees who are otherwise eligible to receive a bonus pursuant to a separate Company or Business Unit bonus plan, including, but not limited to a branch manager incentive plan, override plan, or a management incentive bonus plan or any other commission-based incentive plan, are ineligible for participation in this Plan unless approved in writing (including email) by the Plan Administrator.

⁽²⁾	Exceptions to the Realogy 2011-12 Multi-Year Retention Plan eligibility must be approved in writing (including email) by the Plan Administrator.

⁽³⁾	Local Operating Company employees are not eligible for the Realogy 2011-12 Multi-Year Retention Plan and will continue to be covered under the NRT Local Operating Company Annual Bonus Plan.

⁽ ⁴ ⁾

Direct Operations employees are not eligible for the Realogy 2011-12 Multi-Year Retention Plan and will continue to be covered under the TRG Direct Operation Bonus Plans.

Confidential and Proprietary: Information contained herein is for the sole use of authorized employees of Realogy and should not be disclosed to others

Page 6

Exhibit 10.5

DOMUS HOLDINGS CORP.

2007 STOCK INCENTIVE PLAN

Amended and Restated as of November 13, 2007, as further

amended and restated on November 9, 2010

ARTICLE I

PURPOSE OF THE PLAN

The purpose of the DOMUS HOLDINGS CORP. 2007 STOCK INCENTIVE PLAN (the “Plan”) is (i) to further the growth and success of Domus Holdings Corp., a Delaware corporation (the “Company”), and its Subsidiaries (as hereinafter defined) by enabling directors and employees of, or consultants to, the Company or any of its Subsidiaries to acquire Shares (as hereinafter defined), thereby increasing their personal interest in such growth and success, and (ii) to provide a means of rewarding outstanding performance by such persons to the Company and/or its Subsidiaries. Awards granted under the Plan (the “Awards”) shall be nonqualified stock options (referred to herein as “Options” or “NSOs”), rights to purchase Shares, restricted stock (referred to herein as “Restricted Stock”), restricted stock units (referred to herein as “Restricted Stock Units”) and other awards settleable in, or based upon, Common Stock (referred to herein as “Other Stock-Based Awards”). In the Plan, the terms “Parent” and “Subsidiary” mean “Parent Corporation” and “Subsidiary Corporation,” respectively, as such terms are defined in Sections 424(e) and (f) of the Internal Revenue Code of 1986, as amended (the “Code”).

ARTICLE II

DEFINITIONS

As used in the Plan, the following terms shall have the meanings set forth below:

“Adoption Agreement” means an agreement between the Company and a holder of Shares, pursuant to which such holder agrees to become a party to the Management Investor Rights Agreement.

“Affiliate” means:

(a) in the case of the Company or a Holder (as defined in the Management Investor Rights Agreement) that is not an individual, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company or such Holder, as applicable. For the avoidance of doubt, the term “Affiliate” as applied to the Apollo Holder or the Apollo Group, shall not include at any time any portfolio companies of Apollo Management VI, L.P. or any its affiliates but shall include any co-investment vehicle controlled by any member of the Apollo Group.

(b) in the case of an individual: (i) any member of the immediate family of an individual Holder, including parents, siblings, spouse and children (including those by adoption); the parents, siblings, spouse, or children (including those by adoption) of such immediate family member, and in any such case any trust whose primary beneficiary is such individual Holder or one or more members of such immediate family and/or such Holder’s lineal descendants; (ii) the legal representative or guardian of such individual Holder or of any such immediate family member in the event such individual Holder or any such immediate family member becomes mentally incompetent; and (iii) any Person controlling, controlled by or under common control with a Holder.

As used in this definition, the term “control,” including the correlative terms “controlling,” “controlled by” and “under common control with,” means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership interest, by contract or otherwise) of a Person.

“Apollo Group” means Domus Investment Holdings, LLC, Apollo Investment Fund VI, L.P., a Delaware limited partnership, collectively with each of their respective affiliates (including, for avoidance of debt, any syndication vehicles) to which any transfers of Common Stock are made.

“Apollo Holder” means, collectively, Domus Investment Holdings, LLC and Apollo Investment Fund VI, L.P.

“Award” has the meaning set forth in Article I hereof.

“Award Agreement” means any writing setting forth the terms of an Award that has been duly authorized and approved by the Board or the Committee.

“Board” has the meaning set forth in Section 3.1 hereof.

“Capital Stock” means any and all shares of, interests and participations in, and other equivalents (however designated) of stock, including without limitation all Shares and preferred stock.

“Cause” means, with respect to a Termination of Relationship: (i) if such Participant is at the time of termination a party to an employment, consulting or similar agreement with the Company or any of its Subsidiaries with an effective date on or after the Closing Date that defines such term, the meaning given in such agreement; (ii) otherwise if such Participant is at the time of termination a party to an Award Agreement that was entered into under the Plan and defines such term, the meaning given in the Award Agreement; and (iii) in all other cases, a Termination of Relationship by the Company or any of its Subsidiaries or Affiliates based on such Participant’s (A) commission of any felony or an act of moral turpitude; (B) engaging in an act of dishonesty or willful misconduct; (C) material breach of the Participant’s obligations hereunder or under any agreement entered into between the Participant and the Company or any of its Subsidiaries or Affiliates; (D) material breach of the Company’s policies or procedures, including but not limited to the Realogy Corporation Code of Ethics or any of the Key Policies of Realogy Corporation; or (E) the Participant’s willful failure to substantially perform his or her duties as an employee of the Company or any Subsidiary or Affiliate (other than any such failure resulting from incapacity due to physical or mental illness). A termination will not be for “Cause” pursuant to clause (B), (C), (D) or (E), to the extent such conduct is curable, unless the Company shall have notified the Participant in writing describing such conduct and the Participant shall have failed to cure such conduct within ten (10) business days after the receipt of such written notice.

“Closing Date” means April 10, 2007.

“Code” has the meaning set forth in Article I hereof.

“Committee” has the meaning set forth in Section 3.1 hereof.

“Common Stock” means the common stock of the Company, par value $.01 per share.

“Company” has the meaning set forth in Article I hereof.

“Disability” means, with respect to each Participant, (i) if such Participant is at the time of termination a party to an employment agreement with the Company or any of its Subsidiaries with an effective date on or after the Closing Date that defines such term, the meaning given in the employment agreement; (ii) otherwise if such Participant is at the time of termination a party to an Award Agreement that was entered into under the Plan and defines such term, the meaning given in the Award Agreement, and (iii) in all other cases that such Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which 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) is, by reason of any medically determinable physical or mental impairment which 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 Company or its Subsidiaries or such other definition as Section 409A of the Code may require.

“Distributed Securities” means any Shares or Capital Stock that have been distributed to investors in investment funds managed by Apollo Management VI, L.P. or any of its Affiliates.

“Effective Date” means the date the Plan is adopted by the Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Fair Market Value” means (i) on the Closing Date, the price the Investor pays to acquire the Common Stock, and (ii) as of any subsequent date, the closing price of the Common Stock on any national securities exchange or any national market system (including, but not limited to, The NASDAQ National Market) on that date, or if no prices are reported on that date, on the last preceding date on which such prices of the Common Stock are so reported. If the Common Stock is not then listed on any national securities exchange but is traded over the counter at the time determination of its Fair Market Value is required to be made, its Fair Market Value shall be deemed to be equal to the average between the reported high and low sales prices of Common Stock on the most recent date on which Common Stock was publicly traded. If the Common Stock is not publicly traded at the time a determination of its Fair Market Value is made, the Board shall determine its Fair Market Value in such manner as it deems appropriate (such determination to be made in a manner that satisfies Section 409A of the Code (to the extent applicable) and in good faith as required by Section 422(c)(1) of the Code), which may be based on the advice of an independent investment banker or appraiser recognized to be an expert in making such valuations; provided, however, that in the event of any sale to, or repurchase of Shares by, the Company from a current or former Management Holder (as defined in the

Management Investor Rights Agreement) in a single transaction of 350,000 Shares or more, such determination shall be based on the advice of an independent investment banker or appraiser recognized to be an expert in making such valuations and the Fair Market Value of each Share shall be no less than that determined by such independent investment banker or appraiser. In all events, Fair Market Value shall not take into account any discount for minority interest, private company discount or discount due to transfer restrictions imposed under the Management Investor Rights Agreement.

“Good Reason” means with respect to a Termination of Relationship: (i) if such Participant is at the time of termination a party to an employment, consulting or similar agreement with the Company or any of its Subsidiaries with an effective date on or after the Closing Date that defines such term (or a term of like import, such as “constructive discharge”), the meaning given in such agreement; (ii) otherwise if such Participant is at the time of termination a party to an Award Agreement that was entered into under the Plan and defines such term, the meaning given in the Award Agreement; and (iii) in all other cases, a Termination of Relationship by the Participant following (x) a reduction of the Participant’s annual base salary (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive) or (y) a required relocation of the Participant’s primary work location to a location more than fifty (50) miles from the Participant’s current primary work location; provided, however, that such reduction or relocation described in clause (iii) shall not constitute Good Reason unless the Participant shall have notified the Company in writing describing such reduction or required relocation within thirty (30) business days of its initial occurrence and then only if the Company shall have failed to cure such reduction or required relocation within thirty (30) business days after the Company’s receipt of such written notice.

“Independent Third Party” means any Person that (i) did not own in excess of five percent (5%) of the Common Stock deemed outstanding (on a fully diluted basis) as of the first anniversary of the Effective Date; and (ii) is not an Affiliate of any such owner or the Apollo Group or a portfolio company of any members of the Apollo Group, provided that, for the avoidance of doubt, holders of interests in Domus Co-Investment Holdings LLC and Domus Co-Investment Holdings II, LLC shall be deemed Independent Third Parties.

“Investor” means, collectively, Apollo Investment Fund VI, L.P., each of its Affiliates and any other investment fund or vehicle managed by Apollo Management VI, L.P. or any of its Affiliates (including any successors or assigns of any such manager).

“Investor Investment” means direct or indirect investments in Capital Stock of the Company made by the Investor on or after the Closing Date, but excluding any purchases or repurchases of Capital Stock on any securities exchange or any national market system after an initial Qualified Public Offering. The term “Investor Investment” excludes any investment originally made by the Investor in a Person other than the Company or a Subsidiary.

“Investor IRR” means the pretax compounded annual internal rate of return calculated on a quarterly basis realized by the Investor on the Investor Investment, based on the aggregate amount invested by the Investor in respect of all Investor Investments and the aggregate amount of cash dividends and sale proceeds received by, and Distributed Securities distributed to, the Investor in respect of all Investor Investments, assuming all Investor Investments were purchased

by one Person and were held continuously by such Person. The Investor IRR shall be determined based on the actual time of each Investor Investment and actual cash received by, and Distributed Securities distributed to, the Investor in respect of all Investor Investments and including, as a return on each Investor Investment, any cash dividends, cash distributions, cash sales or cash interest made by the Company or any Subsidiary in respect of such Investor Investment during such period, but excluding any other amounts payable that are not directly attributable to an Investor Investment (including, without limitation, any management, transaction, monitoring or similar fees). For purposes of determining Investor IRR in respect of Distributed Securities, the fair market value of those securities on the date on which the Distributed Securities are distributed shall be used for purposes of calculating the annual internal rate of return, and such date shall be deemed the date on which the return on the Investor Investment was received by the Investor.

“Management Investor Rights Agreement” means the Management Investor Rights Agreement, dated as of the Closing Date, among the Company and the holders party thereto, as it is amended, supplemented, restated or otherwise modified from time to time.

“Notice” has the meaning set forth in Section 5.7 hereof.

“NSOs” has the meaning set forth in Article I hereof.

“Option” has the meaning set forth in Article I hereof.

“Option Price” has the meaning set forth in Section 5.4 hereof.

“Option Shares” has the meaning set forth in Section 5.7(b) hereof.

“Other Stock-Based Award” has the meaning set forth in Article I hereof.

“Participant” has the meaning set forth in Article IV hereof.

“Permitted Assignee” has the meaning set forth in Section 11.2 hereof.

“Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

“Plan” has the meaning set forth in Article I hereof.

“Purchase Price” has the meaning set forth in Section 6.2 hereof.

“Qualified Public Offering” means a primary or secondary underwritten public offering of Common Stock by the Company or any selling securityholders pursuant to an effective registration statement filed by the Company with the Securities and Exchange Commission (other than (i) a registration relating solely to an employee benefit plan or employee stock plan, a dividend reinvestment plan, or a merger or a consolidation, (ii) a registration incidental to an issuance of securities under Rule 144A, (iii) a registration on Form S-4 or any successor form, or

(iv) a registration on Form S-8 or any successor form) under the Securities Act, pursuant to which the aggregate offering price of the Common Stock (by the Company and/or other selling securityholders) sold in such offering (together with the aggregate offering prices from any prior such offerings) is at least $250 million.

“Realization Event” means (i) the consummation of a Sale of the Company; or (ii) any transaction or series of related transactions in which the Investor sells at least 50% of the Shares directly or indirectly acquired by it (from the Company or otherwise) and at least 50% of the aggregate of all Investor Investments.

“Reserved Shares” means, at any time, an aggregate of 20,000,000 Shares, as the same may be adjusted at or prior to such time in accordance with Article X.

“Restricted Stock” has the meaning set forth in Article I hereof.

“Restricted Stock Unit” has the meaning set forth in Article I hereof.

“Sale of the Company” means the sale of the Company to one or more Independent Third Parties, pursuant to which such party or parties acquire (i) Capital Stock of the Company possessing the voting power to elect a majority of the Board (whether by merger, consolidation, recapitalization or sale or transfer of the Company’s Capital Stock or otherwise); or (ii) all or substantially all of the Company’s assets determined on a consolidated basis.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Shares” means shares of Common Stock.

“Stock Award” means an Award of the right to purchase Shares under Article VI of the Plan.

“Subsidiary” means any corporation or other entity of which the Company owns securities or interests having a majority, directly or indirectly, of the ordinary voting power in electing the board of directors, managers, general partners or similar governing Persons thereof.

“Termination Date” means the tenth anniversary of the Effective Date.

“Termination of Relationship” means (i) if the Participant is an employee of the Company or any Subsidiary, the termination of the Participant’s employment with the Company and its Subsidiaries for any reason; (ii) if the Participant is a consultant to the Company or any Subsidiary, the termination of the Participant’s consulting relationship with the Company and its Subsidiaries for any reason; and (iii) if the Participant is a director of the Company or any Subsidiary, the termination of the Participant’s service as a director of the Company or such Subsidiary for any reason; including, in the case of clauses (i), (ii) or (iii), as a result of such Subsidiary no longer being a Subsidiary of the Company because of a sale, divestiture or other disposition of such Subsidiary by the Company (whether such disposition is effected by the Company or another Subsidiary thereof). For the avoidance of doubt, no period of notice that is given or that ought to have been given under applicable law in respect of such Termination of Relationship will be utilized in determining entitlement under the Plan or an Award Agreement.

“Vested Options” means Options that have vested in accordance with the applicable Award Agreement.

ARTICLE III

ADMINISTRATION OF THE PLAN; SHARES SUBJECT TO THE PLAN

3.1

Committee .

The Plan shall be administered by the Board of Directors of the Company (the “Board”), the Executive Committee of the Board or the Compensation Committee of the Board (the “Committee”), subject to the delegation of authority set forth in Section 3.3. The term “Committee” shall, for all purposes of the Plan, be deemed to refer to the Board or the Executive Committee if the Board or Executive Committee is administering the Plan or the authorized officer(s) under Section 3.3 if any such officer has been delegated authority to administer the Plan under and to the extent permitted by Section 3.3.

3.2

Procedures .

The Committee shall adopt such rules and regulations as it shall deem appropriate concerning the holding of meetings and the administration of the Plan. The entire Committee shall constitute a quorum and the actions of the entire Committee present at a meeting, or actions approved in writing by the entire Committee, shall be the actions of the Committee.

3.3

Interpretation; Powers of Committee .

Except as may otherwise be expressly reserved to the Board as provided herein, and with respect to any Award, except as may otherwise be provided in the Award Agreement evidencing such Award or an employment or consulting agreement between the Participant and the Company, the Committee shall have all powers with respect to the administration of the Plan, including the authority to:

(a) determine eligibility and the particular persons who will receive Awards;

(b) grant Awards to eligible persons, determine the price and number of securities to be offered or awarded to any of such persons, determine the other specific terms and conditions of Awards consistent with the express limits of the Plan, establish the installments (if any) in which such Awards will become exercisable or will vest and the respective consequences thereof (or determine that no delayed exercisability or vesting is required), and establish the events of termination or reversion of such Awards;

(d) construe and interpret the provisions of the Plan and any Award Agreement or other agreement defining the rights and obligations of the Company and Participants under the Plan, make factual determinations with respect to the administration of the Plan, further define the terms used in the Plan, and prescribe, amend and rescind rules and regulations relating to the administration of the Plan;

(e) cancel, modify, or waive the Company’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding Awards held by Participants, subject to any required consent under Article XIII;

(f) accelerate or extend the exercisability or extend the term of any or all outstanding Awards, subject to any consent required under Article XIII; and

(g) make all other determinations and take such other action as contemplated by the Plan or as may be necessary or advisable for the administration of the Plan and the effectuation of its purposes.

All decisions of the Board or the Committee, as the case may be, shall be reasonable and made in good faith and shall be conclusive and binding on all Participants in the Plan. In making any determination or in taking or not taking any action under the Plan, the Committee or the Board, as the case may be, may obtain the advice of experts, including employees of and professional advisors to the Company. The Committee may delegate authority under Section 3.3(c), (d) and (g) to one or more officers of the Company; provided, however, that in no event shall an officer be delegated any authority under Section 3(d) or (g) with respect to Awards granted to or held by the following individuals: (a) individuals who are executive officers or directors of the Company or, if the Common Stock (or other equity securities of the Company) were registered under the Securities Act, are subject to Section 16 of the Exchange Act, or (b) officers of the Company to whom authority has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation, and the Committee may at any time rescind the authority so delegated or appoint a new delegate. At all times, the delegate appointed under this Section 3.3 shall serve in such capacity at the pleasure of the Committee. The Committee also may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Company. No director, officer or agent of the Company or any Subsidiary will be liable for any action, omission or decision under the Plan taken, made or omitted in good faith. The provisions of Awards need not be the same with respect to each Participant.

3.4

Compliance with Code Section 162(m) .

In the event the Company becomes a “publicly-held corporation” as defined in Section 162(m)(2) of the Code, the Company may establish a committee of outside directors meeting the requirements of Section 162(m)(2) of the Code to (i) approve Awards that might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes by the Company pursuant to Section 162(m) of the Code; and (ii) administer the Plan. In such event, the powers reserved to the Committee in the Plan shall be exercised by such compensation committee. In addition, Awards under the Plan may be granted upon satisfaction of the conditions to such grants provided pursuant to Section 162(m) of the Code and any Treasury Regulations promulgated thereunder.

3.5

Number of Shares .

Subject to the provisions of Article X (relating to adjustments upon changes in capital structure and other corporate transactions), the aggregate number of Shares with respect to which Awards may be granted under the Plan shall not exceed the Reserved Shares. Shares that are subject to or underlie Options granted under the Plan that expire or for any reason are canceled or terminated without having been exercised (or Shares subject to or underlying the unexercised portion of any Options, in the case of Options that were partially exercised at the time of their expiration, cancellation or termination), as well as Shares that are subject to Stock Awards made under the Plan that are not actually purchased pursuant to such Stock Awards and Shares that are subject to Restricted Stock or Restricted Stock Units that are forfeited, will again, except to the extent prohibited by law or applicable listing or regulatory requirements, be available for subsequent Award grants under the Plan.

3.6

Reservation of Shares .

The number of Shares reserved for issuance with respect to Awards granted under the Plan shall at no time be less than the maximum number of Shares which may be issued or delivered at any time pursuant to outstanding Awards.

ARTICLE IV

ELIGIBILITY

4.1

General .

Awards may be granted under the Plan only to persons who are employees, consultants or directors of the Company or any of its Subsidiaries on the date of the grant. Each such person to whom an Award is granted under the Plan is referred to herein as a “Participant.”

ARTICLE V

STOCK OPTIONS

5.1

General .

Options may be granted under the Plan at any time and from time to time on or prior to the Termination Date. Each Option granted under the Plan shall be designated as an NSO and shall be subject to the terms and conditions applicable to NSOs set forth in the Plan. Each Option shall be evidenced by an Award Agreement incorporating the terms and provisions of the Plan that shall be executed by the Company and the Participant. The Award Agreement shall specify the number of Shares for which such Option shall be exercisable, the exercise price for such Shares and the other terms and conditions of the Option.

5.2

Vesting .

The Committee, in its sole discretion, shall determine whether and to what extent any Options are subject to vesting based upon the Participant’s continued service to, or the Participant’s performance of duties for, the Company and its Subsidiaries, or upon any other basis.

5.3

Date of Grant .

The date of grant of an Option under the Plan shall be the date as of which the Committee approves the grant.

5.4

Option Price .

The price (the “Option Price”) at which each Share may be purchased shall be determined by the Committee and set forth in the Award Agreement. In no event, however, may the Committee determine an Option Price that is less than the Fair Market Value of a Share on the date of grant.

5.5

Automatic Termination of Options .

Each Option granted under the Plan, to the extent not previously exercised, shall automatically terminate and shall become null and void and be of no further force or effect upon such date or dates as are set forth in the applicable Award Agreement, consistent with the terms of the Plan.

5.6

Payment of Option Price .

The aggregate Option Price shall be paid in cash (by wire transfer of immediately available funds to a bank account of the Company designated by the Committee or by delivery of a personal or certified check payable to the Company); provided that the Committee may, in its sole discretion, specify one or more of the following other forms of payment that may be used by a Participant (but only to the extent permitted by applicable law) upon exercise of his or her Option:

(a) by surrender of Shares that either (i) have been paid for within the meaning of Rule 144 under the Securities Act (and, if such Shares were purchased from the Company or any Subsidiary thereof by means of a promissory note, such note has been fully paid with respect to such Shares); or (ii) were obtained by the Participant in the public market (but, subject in any case, to the applicable limitations of Rule 16b-3 under the Exchange Act);

(b) such other method as the Committee may from time to time approve or authorize as set forth in an Award Agreement;

(c) to the extent permitted by applicable law, if the Common Stock is a class of securities then listed or admitted to trading on any national securities exchange or traded on any national market system (including, but not limited to, The Nasdaq National Market), in compliance with any cashless exercise program authorized by the Board or the Committee for use in connection with the Plan at the time of such exercise (but, subject in any case, to the applicable limitations of Rule 16b-3 under the Exchange Act); or

(d) a combination of the methods set forth in this Section 5.6.

5.7

Notice of Exercise .

A Participant (or other person, as provided in Section 11.2) may exercise an Option (for the Shares represented thereby) granted under the Plan in whole or in part (but for the purchase of whole Shares only), as provided in the Award Agreement evidencing his or her Option, by delivering a written notice (the “Notice”) to the Secretary of the Company. The Notice shall state:

(a) That the Participant elects to exercise the Option;

(b) The number of Shares with respect to which the Option is being exercised (the “Option Shares”);

(c) The method of payment for the Option Shares (which method must be available to the Participant under the terms of his or her Award Agreement);

(d) The date upon which the Participant desires to consummate the purchase of the Option Shares (which date must be prior to the termination of such Option); and

(e) Any additional provisions consistent with the Plan as the Committee may from time to time require.

The exercise date of an Option shall be the date on which the Company receives the Notice from the Participant. Such Notice shall also contain, to the extent such Participant is not then a party to the Management Investor Rights Agreement (and the Management Investor Rights Agreement has not been terminated prior to such date), an Adoption Agreement, in form and substance satisfactory to the Board pursuant to which the Participant agrees to become a party to the Management Investor Rights Agreement.

5.8

Issuance of Certificates .

The Company shall issue stock certificates in the name of the Participant (or other person exercising the applicable Option in accordance with the provisions of Section 11.2), representing the Shares purchased upon exercise of the Option as soon as practicable after receipt of the Notice and payment of the aggregate Option Price for such Shares and satisfaction of all applicable withholding amounts in accordance with Article XV; provided that the Company, in its sole discretion, may elect to not issue any fractional Shares upon the exercise of an Option (determining the fractional Shares after aggregating all Shares issuable to a single holder as a result of an exercise of an Option for more than one Share) and, in lieu of issuing such fractional Shares, shall pay the Participant the Fair Market Value thereof. Neither the Participant nor any person (to the extent permitted under Section 11.2 of the Plan) exercising an Option shall have any privileges as a stockholder of the Company with respect to any Shares of stock issuable upon exercise of an Option granted under the Plan until the date of issuance of stock certificates

representing such Shares pursuant to this Section 5.8. Notwithstanding the foregoing, the Committee reserves the right to account for Shares through book entry or other electronic means rather than the issuance of stock certificates.

ARTICLE VI

STOCK AWARDS

6.1

General .

Stock Awards may be granted under the Plan at any time and from time to time on or prior to the Termination Date. Each Stock Award shall be evidenced by an Award Agreement that shall be executed by the Company and the Participant. The Award Agreement shall specify the terms and conditions of the Stock Award, including without limitation the number of Shares covered by the Stock Award, the purchase price for such Shares and the deadline for the purchase of such Shares.

6.2

Purchase Price; Payment .

The price (the “Purchase Price”) at which each Share covered by the Stock Award may be purchased upon exercise of a Stock Award shall be determined by the Committee and set forth in the applicable Award Agreement. The Company will not be obligated to issue certificates evidencing Shares purchased under this Article VI unless and until it receives full payment of the aggregate Purchase Price therefor and all other conditions to the purchase, as determined by the Committee, have been satisfied. The Purchase Price of any shares subject to a Stock Award must be paid in full at the time of the purchase.

ARTICLE VII

RESTRICTED STOCK

7.1

General .

Shares of Restricted Stock may be awarded either alone or in addition to other Awards granted under the Plan. The Committee shall determine the employees, consultants and directors to whom and the time or times at which grants of Restricted Stock will be awarded, the number of Shares to be awarded to any Participant, the conditions for vesting, the time or times within which such Awards may be subject to forfeiture and any other terms and conditions of the Awards, in addition to those contained in Section 7.3.

7.2

Awards and Certificates .

Shares of Restricted Stock shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or other electronic means or issuance of one or more stock certificates. Any certificate issued in respect of Shares of Restricted Stock shall be registered in the name of such Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:

“The sale or other transfer of the Shares of Common Stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in the Domus Holdings Corp. 2007 Stock Incentive Plan, and in an Award Agreement. A copy of the Plan and such Award Agreement may be obtained from Domus Holdings Corp.”

The Committee may require that the certificates evidencing such Shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award.

7.3

Terms and Conditions . Shares of Restricted Stock shall be subject to the following terms and conditions:

(a) Subject to the provisions of the Plan and the Award Agreement referred to in Section 7.3(c), during the restriction period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Shares of Restricted Stock. Within these limits, the Committee may provide for the lapse of restrictions based upon period of service in installments or otherwise and/or the satisfaction of performance goals and may accelerate or waive, in whole or in part, restrictions based upon period of service. Except as provided in the Award Agreement, during the restriction period, the Participant shall not have, with respect to the Shares of Restricted Stock, the rights of a stockholder of the Company holding the class or series of Shares that is the subject of the Restricted Stock, other than, if applicable, the right to vote the Shares. Dividends (if any) payable in Shares and other non-cash dividends and distributions and extraordinary cash dividends shall be held subject to the vesting of the underlying Restricted Stock, unless the Committee determines otherwise in the applicable Award Agreement or makes an adjustment or substitution to the Restricted Stock pursuant to Article X in connection with such dividend or distribution.

(b) If and when any applicable restriction period expires without a prior forfeiture of the Restricted Stock, unlegended certificates for such Shares shall be delivered to the Participant upon surrender of the legended certificates.

(c) Each Award of Restricted Stock shall be confirmed by, and be subject to, the terms of an Award Agreement. The applicable Award Agreement shall specify the consequences for the Restricted Stock of the Participant’s Termination of Relationship.

ARTICLE VIII

RESTRICTED STOCK UNITS

8.1

Nature of Award .

Restricted Stock Units are Awards denominated in Shares that will be settled, subject to the terms and conditions of the Restricted Stock Units, either by delivery of Shares to the

Participant or by the payment of cash based upon the Fair Market Value of a specified number of Shares. The Committee shall determine the employees, consultants and directors to whom and the time or times at which grants of Restricted Stock Units will be awarded, the number of Shares to be awarded to any Participant, the conditions for vesting, the time or times within which such Awards may be subject to forfeiture and any other terms and conditions of the Awards, in addition to those contained in Section 8.2.

8.2

Terms and Conditions .

The Committee may, in connection with the grant of Restricted Stock Units, condition the vesting thereof upon the continued service of the Participant and/or the achievement of performance goals. Each Award of Restricted Stock Units shall be confirmed by, and be subject to, the terms of an Award Agreement. The applicable Award Agreement shall specify the consequences for the Restricted Stock Units of the Participant’s Termination of Relationship. An Award of Restricted Stock Units shall be settled as and when the Restricted Stock Units vest or at a later time specified by the Committee or in accordance with an election of the Participant, if the Committee so permits. Restricted Stock Units may not be sold, assigned, transferred, pledged or otherwise encumbered until they are settled, except to the extent provided in the applicable Award Agreement in the event of the Participant’s death. The Award Agreement for Restricted Stock Units shall specify whether, to what extent and on what terms and conditions the applicable Participant shall be entitled to receive current or deferred payments of cash, Common Stock or other property corresponding to the dividends payable on the Common Stock (subject to Section 22.4 below).

ARTICLE IX

OTHER STOCK-BASED AWARDS

Other Awards of Common Stock and other Awards that are valued in whole or in part by reference to, or are otherwise based upon, Common Stock, including (without limitation) dividend equivalents and convertible debentures, may be granted under the Plan.

ARTICLE X

ADJUSTMENTS

10.1

Changes in Capital Structure .

In the event of an extraordinary stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of the Company, an extraordinary cash dividend, separation, spinoff or a reorganization (each, an “Adjustment Event”), the Committee or the Board shall make such substitutions or adjustments as it deems appropriate and equitable in its discretion to: (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the number and kind of Shares or other securities subject to outstanding Awards; (C) performance metrics and targets underlying outstanding Awards; and (D) the Option Price of outstanding Options. In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation,

disaffiliation, or similar event affecting the Company or any of its Subsidiaries (each, a “Corporate Transaction”), the Committee or the Board may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to: (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan; (B) the number and kind of Shares or other securities subject to outstanding Awards; (C) performance metrics and targets underlying outstanding Awards; and (D) the Option Price of outstanding Options. In the case of Corporate Transactions, such adjustments may include, without limitation, (1) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Transaction with respect to which shareholders of Common Stock receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of an Option shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each Share pursuant to such Corporate Transaction over the Option Price of such Option shall conclusively be deemed valid); and (2) the substitution of other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the Shares subject to outstanding Awards.

10.2

Special Rules .

The following rules shall apply in connection with Section 10.1 above:

(a) No adjustment shall be made for cash dividends (except as described in Section 10.1) or the issuance to stockholders of rights to subscribe for additional Shares or other securities (except in connection with a Corporate Transaction); and

(b) Any adjustments referred to in Section 10.1 shall be made by the Committee or the Board in its discretion and shall be conclusive and binding on all Persons holding any Awards granted under the Plan.

10.3

Right to Include Options upon a Realization Event .

Upon a Realization Event, subject to the provisions of any Award Agreement to the contrary with respect to a Sale of the Company, the Company may, but is not obligated to, purchase each outstanding Vested Option and/or unvested Option for a per share amount equal to (i) the amount per share received (whether in cash, securities or a combination thereof) in respect of the Shares sold in such transaction constituting the Realization Event, less (ii) the Option Price thereof. In the event the amount in (i) would not exceed the amount in (ii), Options may be cancelled for no payment.

The provisions of this Section 10.3 shall not be construed, however, to limit or reduce any rights of the Company or the Participant under the Management Investor Rights Agreement.

ARTICLE XI

RESTRICTIONS ON AWARDS

11.1

Compliance With Securities Laws .

No Awards shall be granted under the Plan, and no Shares shall be issued and delivered pursuant to Awards granted under the Plan, unless and until the Company and/or the Participant shall have complied with all applicable Federal, state or foreign registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction. As soon as practicable following the occurrence of any Qualified Public Offering, the Company shall register all Shares subject to the Plan on Form S-8 (or any successor form).

The Committee in its discretion may, as a condition to the delivery of any Shares pursuant to any Award granted under the Plan, require the applicable Participant (i) to represent in writing that the Shares received pursuant to such Award are being acquired for investment and not with a view to distribution and (ii) to make such other representations and warranties as the Committee deems necessary or appropriate. Stock certificates representing Shares acquired under the Plan that have not been registered under the Securities Act shall, if required by the Committee, bear such legends as may be required by the Management Investor Rights Agreement and the applicable Award Agreement.

11.2

Nonassignability of Awards .

Unless otherwise specifically provided by the Committee in an Award Agreement, no Award granted under the Plan shall be assignable or otherwise transferable by the Participant, except by designation of a beneficiary, by will or by the laws of descent and distribution. An Award may be exercised during the lifetime of the Participant only by the Participant, unless the Participant becomes subject to a Disability. If a Participant dies or becomes subject to a Disability, his or her Options shall thereafter be exercisable, during the period specified in the applicable Award Agreement (as the case may be), by his or her designated beneficiary or if no beneficiary has been designated in writing, by his or her executors or administrators to the full extent (but only to such extent) to which such Options were exercisable by the Participant at the time of (and after giving effect to any vesting that may occur in connection with) his or her death or Disability. Notwithstanding the foregoing, a Participant may assign or transfer an Award with the prior consent of the Committee to a “Family Member” as such term is defined in Rule 701 of the Securities Act (each transferee thereof, a “Permitted Assignee”); provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and the Award Agreement relating to the transferred Award and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 11.2. Before issuing any Shares under the Plan to any person who is not already a party to the Management Investor Rights Agreement, the Company shall obtain an executed Adoption Agreement from such person, unless a Qualified Public Offering shall have already occurred.

11.3

No Right to an Award or Grant .

Neither the adoption of the Plan nor any action of the Board or the Committee shall be deemed to give an employee, director or consultant any right to be granted an Option to purchase Shares or to receive an Award under the Plan, except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then only to the extent of and on the terms and conditions expressly set forth in the Award Agreement. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the payment of any Award.

11.4

No Evidence of Employment or Service .

Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant any right with respect to the continuation of his or her employment by or service with the Company or any of its Subsidiaries or interfere in any way with the right of the Company or any such Subsidiary, in their respective sole discretion (subject to the terms of any separate agreement to the contrary), at any time to terminate such employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.

11.5

No Restriction of Corporate Action .

Nothing contained in the Plan or in any Award Agreement will be construed to prevent the Company or any Subsidiary or Affiliate of the Company from taking any corporate action that is deemed by the Company or by its Subsidiaries and Affiliates to be appropriate or in its best interest, unless such action would have a material adverse effect (as determined in reasonable good faith by the Company) on any then-outstanding Award held by a Participant, without the Participant’s written consent.

ARTICLE XII

TERM OF THE PLAN

The Plan shall become effective on the Effective Date and shall terminate on the Termination Date. No Awards may be granted after the Termination Date. Any Award outstanding as of the Termination Date shall remain in effect and the terms of the Plan will apply until such Award terminates as provided in the applicable Award Agreement.

ARTICLE XIII

AMENDMENT OF PLAN

The Plan may be modified or amended in any respect by the Committee, the Board or the Executive Committee of the Board ; provided, however, that the approval of the holders of a majority of the votes that may be cast by all of the holders of shares of Common Stock of the Company entitled to vote (voting together as a single class, with each such holder entitled to cast one vote per share held by such holder) shall be obtained prior to any such amendment becoming effective if such approval is required by law or is necessary to comply with regulations

promulgated by the Securities and Exchange Commission under Section 16(b) of the Exchange Act. Notwithstanding the foregoing, the Plan may not be modified or amended as it pertains to any existing Award Agreement if such modification or amendment would materially impair the rights of the applicable Participant without the written consent of such Participant.

ARTICLE XIV

CAPTIONS

The use of captions in the Plan is for convenience. The captions are not intended to provide substantive rights.

ARTICLE XV

WITHHOLDING TAXES

Unless otherwise provided in any Award Agreement, upon any exercise or payment of any Award, the Company shall have the right at its option and in its sole discretion to (i) require the Participant to pay or provide for payment of the amount of any taxes which the Company or any Subsidiary may be required to withhold with respect to such exercise or payment (which payment may be a condition precedent to an exercise); (ii) deduct from any amount payable to the Participant in cash or securities in respect of the Award the amount of any taxes which the Company may be required to withhold with respect to such exercise or payment; (iii) reduce the number of Shares to be delivered to the Participant in connection with such exercise or payment by the appropriate number of Shares, valued at their then Fair Market Value, to satisfy the minimum withholding obligation; or (iv) effect such withholding through such other method as the Committee may from time to time approve. In no event will the value of Shares withheld under clause (iii) above exceed the minimum amount of required withholding under applicable law.

ARTICLE XVI

SECTION 83(b) ELECTION

To the extent permitted by the Board or Committee, each Participant awarded an Award may, but is not obligated to, make an election under Section 83(b) of the Code to be taxed currently with respect to any Award issued under the Plan. The election permitted under this Article XVI shall comply in all respects with and shall be made within the period of time prescribed under Section 83(b) of the Code. Each Participant shall prepare such forms as are required to make an election under Section 83(b) of the Code. The Company shall have no liability to any Participant who fails to make a permitted Section 83(b) election in a timely manner.

ARTICLE XVII

CODE SECTION 409A COMPLIANCE

The Plan is intended to provide for non-statutory stock option benefits that are not deemed to be deferred compensation and thus are not subject to the provisions of Code § 409A. If the Plan is deemed to be subject to Code § 409A, however, the Company may modify the Plan, the Award Agreement and any Award granted under the Plan to comply with Code § 409A guidance in a manner that will not materially reduce the value of such Award.

ARTICLE XVIII

SECTION 16 COMPLIANCE

In the event that the Company becomes subject to Section 16 of the Exchange Act, it is intended that the Plan and any Award made to a Participant subject to Section 16 of the Exchange Act will meet all of the requirements of Rule 16b-3. Accordingly, unless otherwise provided by the Committee, if any provisions of the Plan or any Award would disqualify the Plan or the Award, or would otherwise not comply with Rule 16b-3, such provision or Award will be construed or deemed amended to conform to Rule 16b-3.

ARTICLE XIX

OTHER PROVISIONS

Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

ARTICLE XX

NUMBER AND GENDER

With respect to words used in the Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, and vice versa, as the context requires.

ARTICLE XXI

GOVERNING LAW

All questions concerning the construction, interpretation and validity of the Plan and the instruments evidencing the Awards granted hereunder shall be governed by and construed and enforced in accordance with the domestic laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of the Plan, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

ARTICLE XXII

MISCELLANEOUS

22.1

General .

(a) Awards granted under the Plan will be satisfied by delivery of shares of Common Stock or from the general assets of the Company, and (except as provided in Section 3.6) no special or separate reserve, fund or deposit will be made to assure satisfaction of such Awards. No grantee, beneficiary or other person will have any right, title or interest in any fund or in any specific asset (including Shares) of the Company by reason of any Award hereunder. Neither the provisions of the Plan (or of any related documents), nor the creation or adoption of the Plan, nor any action taken pursuant to the provisions of the Plan will create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any grantee, beneficiary or other person. To the extent that a grantee, beneficiary or other person acquires a right to receive payment pursuant to any Award hereunder, such right will be no greater than the right of any unsecured general creditor of the Company.

(b) The Management Investor Rights Agreement provides for additional restrictions and limitations with respect to Shares (including additional restrictions and limitations on the voting or transfer of Shares). To the extent that such restrictions are greater than those set forth in the Plan or any Award Agreement, such restrictions and limitations shall apply to any Shares acquired pursuant to the exercise of Awards or otherwise issued or delivered pursuant to an Award and are incorporated herein by this reference.

(c) The Certificate of Incorporation and Bylaws of the Company, as either of them may lawfully be amended, supplemented or restated from time to time, may provide for additional restrictions and limitations with respect to Shares (including additional restrictions and limitations on the voting or transfer of Shares) or priorities, rights and preferences as to securities and interests prior in rights to the Shares. To the extent that these restrictions and limitations are greater than those set forth in the Plan or any Award Agreement, such restrictions and limitations shall apply to any Shares acquired pursuant to Awards and are incorporated herein by this reference.

22.2

Subsidiary Employees .

In the case of a grant of an Award to an employee or consultant of any Subsidiary of the Company, the Company may, if the Committee so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Subsidiary, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Subsidiary will transfer the shares of Common Stock to the employee or consultant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled shall revert to the Company.

22.3

Foreign Employees and Foreign Law Considerations .

The Committee may grant Awards to individuals who are eligible to participate in the plan who are foreign nationals, who are located outside the United States or who are not

compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Company to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, or subplans as may be necessary or advisable to comply with such legal or regulatory provisions.

22.4

Limitation on Dividend Reinvestment and Dividend Equivalents .

To the extent provided under an Award Agreement, reinvestment of dividends in additional Restricted Stock or Restricted Stock Units at the time of any dividend payment, and the payment of Shares with respect to dividends to Participants holding Awards of Restricted Stock or Restricted Stock Units, shall only be permissible if sufficient Shares are available under Section 3.5 for such reinvestment (taking into account then outstanding Options and other Awards), provided that, in the event that there are not sufficient Shares so available, holders of Restricted Stock and Restricted Stock Units shall instead receive cash in the amount equal to such dividend as and when, (i) with respect to Restricted Stock, such Awards become vested, or (ii) with respect to Restricted Stock Units, such Awards become payable.

* * * * * *

As adopted by the Board of Directors of Domus Holdings Corp. on April 10, 2007 and amended and restated on November 13, 2007 as further amended and restated on November 9, 2010.

Exhibit 10.6

OPTION AGREEMENT (this “ Agreement ”)

dated as of November 9, 2010 between DOMUS

HOLDINGS CORP. , a Delaware corporation,

(the “ Company ”) and OPTIONEE (as set forth on

the signature page hereto, the “ Optionee ”).

WHEREAS, the Company, acting through the Committee with the consent of the Company’s Board of Directors (the “ Board ”) will grant to the Optionee, effective as of November 9, 2010 (the “ Grant Date ”), an option under the Domus Holdings Corp. 2007 Stock Incentive Plan, as amended and restated on the date hereof (the “ Plan ”) to purchase a number of shares of Common Stock (“ Shares ”) on the terms and subject to the conditions set forth in this Agreement and the Plan;

WHEREAS, the Optionee has entered into an adoption agreement, pursuant to which the Optionee became a party to that certain Management Investor Rights Agreement, by and among the Company and certain of its holders of Shares, dated as of April 10, 2007 (the “ Management Investor Rights Agreement ”);

NOW, THEREFORE, in consideration of the promises and of the mutual agreements contained in this Agreement, the parties hereto hereby agree as follows:

Section 1. The Plan . The terms and provisions of the Plan are hereby incorporated into this Agreement as if set forth herein in their entirety. In the event of a conflict between any provision of this Agreement and the Plan, the provisions of the Plan shall control. A copy of the Plan may be obtained from the Company by the Optionee upon request. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Plan.

Section 2. Option; Option Price . Effective on the Grant Date, on the terms and subject to the conditions of the Plan and this Agreement, the Company hereby grants to the Optionee the option (the “ Option ”) to purchase Shares at the price per Share (the “ Option Price ”) and in the amount set forth on the signature page hereto. Payment of the Option Price may be made in any manner permitted by the Committee under Section 5.6 of the Plan; provided that, in addition to the manners permitted under Section 5.6 of the Plan, upon the exercise of Options granted under the Plan by the Optionee in respect of 250,000 Shares or more in a single transaction, the Optionee may direct the Company to deduct from the Shares issuable upon exercise of such Options a number of Shares having an aggregate Fair Market Value equal to the sum of the aggregate Option Price in respect of the Options being exercised, and the Company shall thereupon issue to the Optionee the net remaining number of Shares after such deduction. The Option is not intended to qualify for federal income tax purposes as an “incentive stock option” within the meaning of Section 422 of the Code.

Section 3. Term . The term of the Option (the “ Option Term ”) shall commence on the Grant Date and expire on the tenth anniversary of the Grant Date, unless the Option shall have sooner been terminated in accordance with the terms of the Plan (including, without limitation, Article 5 of the Plan) or this Agreement (including, without limitation, Section 7 of this Agreement).

Section 4. Vesting . Except as otherwise set forth in Section 7 (including, without limitation, Section 7(b)), the Options shall become non-forfeitable (any Options that shall have become non-forfeitable pursuant to Section 4 , the “ Vested Options ”) and shall become exercisable according to the following provisions:

(a) Vesting Schedule : Subject to the Optionee’s continued employment with the Company as of any such date: twenty-five percent (25%) of the Options shall become Vested Options and shall become exercisable on each of the first four anniversaries of July 1, 2010. In the event of a Sale of the Company, each Option that has not theretofore become a Vested Option pursuant to the immediately preceding sentence and is outstanding as of immediately prior to the consummation of such Sale of the Company (each such Option, a “ CIC Vesting Option ”) shall vest in full effective as of the consummation of such Sale of the Company, and the Optionee shall be entitled to receive an amount equal to the Spread Value (defined below) to be payable at the same time(s), in the same form(s) of consideration (e.g., cash, securities or other property or a combination thereof) and subject to the same terms and conditions as are applicable to the consideration paid with respect to Shares held by the shareholders of the Company (the “ Shareholders ”) in the Sale of the Company as set forth in the agreement pursuant to which the Sale of the Company is effectuated. In the event that at any time prior to the first anniversary of such Sale of the Company, the Optionee experiences a Termination of Relationship other than due to a Qualifying Termination Event (defined below), the Optionee shall (i) immediately forfeit any and all rights in respect of the CIC Vesting Options pursuant to this Agreement, including, without limitation, any rights to any transfer of property or payment in respect of such CIC Vesting Options and (ii) pay to the Company, immediately upon notice from the Company, an amount in cash equal to any Spread Value previously paid (without regard to whether such Spread Value was paid in cash, securities or other property or a combination thereof). In satisfaction of the Optionee’s obligations under clause (ii), the Company may in its discretion deduct from any payment(s) of any kind (including salary or bonus) otherwise due to the Optionee a total amount equal to the Spread Value previously paid, and the Optionee hereby consents to such deduction and offset. The treatment of the CIC Vesting Options upon a Sale of the Company as set forth in this Section 4(a) shall be in lieu of any adjustments or other rights that may otherwise apply to other option holders under the Plan, including without limitation any adjustments or other rights under Article X of the Plan.

(b) “ Qualifying Termination Event ” means a Termination of Relationship for any reason other than (i) by the Company or its Affiliates for Cause or (ii) by the Optionee without Good Reason (other than due to death).

“ Spread Value ” means the product of (i) the number of Shares subject to the CIC Vesting Options and (ii) the excess (if any) of (x) the value per share payable in respect of the Shares of the Company to Shareholders in the Sale of the Company, over (y) the Option Price (as in effect on the day immediately prior to the consummation of such Sale of the Company) per each Share subject to the CIC Vesting Options. For purposes of the foregoing, (A) if the Shareholders receive cash in respect of their Shares, then the Spread Value, if any, shall be measured and payable in cash based on the per share cash amount paid to Shareholders in

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connection with the Sale of the Company; (B) if the Shareholders receive securities or other property in respect of their Shares, then the Spread Value, if any, shall be measured and payable in the form of such securities or other property, with the amount of the securities or other property, if any, that the Optionee receives in respect of the CIC Vesting Options being equal to the securities or other property that the Optionee would have received if the CIC Vesting Options had been exercised immediately prior to the Sale of the Company and the aggregate Option Price (as in effect on the day immediately prior to the consummation of such Sale of the Company) for such Options was paid in Shares as permitted under Section 2 of this Agreement (with the number of Shares withheld for purposes of paying the aggregate Option Price determined pursuant to the same method required to be used to determine the Fair Market Value of the Shares); and (C) if the Shareholders receive a combination of the two foregoing forms of consideration, then the Spread Value shall be measured and payable in cash and securities or other property in the same per Share proportion as is paid to the Shareholders and otherwise consistent with the principles set forth in clauses (A) and (B) above.

Section 5. Restriction on Transfer . The Option may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Optionee and (unless the Optionee becomes subject to a Disability) may be exercised during the lifetime of the Optionee only by the Optionee. If the Optionee dies or becomes subject to a Disability, the Option shall thereafter be exercisable, during the period specified in Section 7 of this Agreement, by his or her beneficiary, or if no beneficiary has been named, by his or her executors or administrators to the full extent to which the Option was exercisable by the Optionee at the time of his or her death or Disability. The Option shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect. Notwithstanding the foregoing, the Optionee may assign or transfer the Option with the prior consent of the Committee to a “family member” as such term is defined in Rule 701 of the Securities Act (each transferee thereof, a “ Permitted Assignee ”), provided that such Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and the Option Agreement relating to the transferred Option and shall execute an agreement satisfactory to the Company evidencing such obligations, and provided , further that the Optionee shall remain bound by the terms and conditions of the Plan and the Management Investor Rights Agreement. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 5 .

Section 6. Optionee’s Service . Nothing in this Agreement or in the Option shall confer upon the Optionee any right to continue as an employee of, or other service provider to, the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the Company, its Subsidiaries or its Affiliates, as the case may be, in their respective sole discretion, to terminate the Optionee’s employment or service relationship or to increase or decrease the Optionee’s compensation at any time.

Section 7. Termination .

(a) The Option shall automatically terminate and shall become null and void, be unexercisable and be of no further force and effect upon the earliest of:

(i) the tenth anniversary of the Grant Date;

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(ii) the 180 ^th day following the Termination of Relationship in the case of a Termination of Relationship for death or Disability;

(iii) the 90 ^th day following the Termination of Relationship in the case of a Termination of Relationship without Cause or for Good Reason;

(iv) the 60 ^th day following the Termination of Relationship in the case of a Termination of Relationship occurring because the Optionee resigns his or her employment without Good Reason; and

(v) the day of the Termination of Relationship in the case of a Termination of Relationship with Cause.

(b) Except as otherwise provided in the Plan, upon a Termination of Relationship for any reason, the unvested portion of the Option (i.e., that portion which does not constitute Vested Options) shall immediately terminate and be forfeited on the date the Termination of Relationship occurs.

Section 8. Securities Law Representations . The Optionee acknowledges that the Option and the Shares are not being registered under the Securities Act, based, in part, in reliance upon an exemption from registration under Rule 701 or Regulation D promulgated under the Securities Act, and a comparable exemption from qualification under applicable state securities laws, as each may be amended from time to time. The Optionee, by executing this Agreement, hereby makes the following representations to the Company and acknowledges that the Company’s reliance on federal and state securities law exemptions from registration and qualification is predicated, in substantial part, upon the accuracy of these representations:

•

The Optionee is acquiring the Option and, if and when he or she exercises the Option, will acquire the Shares solely for the Optionee’s own account, for investment purposes only, and not with a view or an intent to sell, or to offer for resale in connection with any unregistered distribution, all or any portion of the shares within the meaning of the Securities Act and/or any applicable state securities laws.

•

The Optionee is an “accredited investor,” as that term is defined in Rule 501(a)(1), (2) or (3) of Regulation D promulgated under the Securities Act.

•

The Optionee has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Option and the restrictions imposed on any Shares purchased upon exercise of the Option. The Optionee has been furnished with, and/or has access to, such information as the Optionee considers necessary or appropriate for deciding whether to exercise the Option and purchase the Shares. However, in evaluating the merits and risks of an investment in the Shares, the Optionee has and will rely only upon the advice of the Optionee’s own legal counsel, tax advisors, and/or investment advisors.

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•

The Optionee acknowledges that to the best of his or her knowledge the Option Price is not less than what the Board has determined to be the Fair Market Value of the Shares.

•

The Optionee is aware that any value of the Option depends on its vesting and exercisability as well as an increase in the Fair Market Value and certain other factors of the underlying Shares to an amount in excess of the Option Price, and that any investment in common shares of a closely held corporation such as the Company is non-marketable, non-transferable and could require capital to be invested for an indefinite period of time, possibly without return, and at substantial risk of loss.

•

The Optionee understands that any Shares acquired on exercise of the Option will be characterized as “restricted securities” under the federal securities laws, and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances, including in accordance with the conditions of Rule 144 promulgated under the Securities Act, as presently in effect. The Optionee acknowledges receiving a copy of Rule 144 promulgated under the Securities Act, as presently in effect, and represents that the Optionee is familiar with such rule, and understands the resale limitations imposed thereby and by the Securities Act and the applicable state securities law.

•

The Optionee has read and understands the restrictions and limitations set forth in the Management Investor Rights Agreement, the Plan and this Agreement. The Optionee acknowledges that to the extent the Optionee is not a party to the Management Investor Rights Agreement at the time that the Optionee exercises any portion of the Option, such exercise shall be treated for all purposes as effecting the Optionee’s simultaneous execution of the Management Investor Rights Agreement and the Optionee shall be bound thereby.

•

The Optionee has not relied upon any oral representation made to the Optionee relating to the Option or the purchase of the Shares on exercise of the Option or upon information presented in any promotional meeting or material relating to the Option or the Shares.

•

The Optionee understands and acknowledges that, if and when he or she exercises the Option, (a) any certificate evidencing the Shares (or evidencing any other securities issued with respect thereto pursuant to any stock split, stock dividend, merger or other form of reorganization or recapitalization) when issued shall bear any legends which may be required by applicable federal and state securities laws, and (b) except as otherwise provided under the Management Investor Rights Agreement, the Company has no obligation to register the Shares or file any registration statement under federal or state securities laws. The Committee reserves the right to account for Shares through book entry or other electronic means rather than the issuance of stock certificates.

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Section 9. Designation of Beneficiary . The Optionee may appoint any individual or legal entity in writing as his or her beneficiary to receive any Option (to the extent not previously terminated or forfeited) under this Agreement upon the Optionee’s death or becoming subject to a Disability. The Optionee may revoke his or her designation of a beneficiary at any time and appoint a new beneficiary in writing. To be effective, the Optionee must complete the designation of a beneficiary or revocation of a beneficiary by written notice to the Company under Section 10 of this Agreement before the date of the Optionee’s death. In the absence of a beneficiary designation, the legal representative of the Optionee’s estate shall be deemed the Optionee’s beneficiary.

Section 10. Notices . All notices, claims, certifications, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given and delivered if personally delivered or if sent by nationally-recognized overnight courier, by telecopy, or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:

If to the Company, to it at:

Domus Holdings Corp.

c/o Realogy Corporation

1 Campus Drive

Parsippany, NJ 07054

Facsimile: (973) 407-5270

Attention: David J. Weaving

With a copy to (which copy will not constitute notice):

Wachtell, Lipton, Rosen & Katz

51 West 52 ^nd Street

New York, NY 10019

Attention: Steven A. Cohen, Esq.

Igor Kirman, Esq.

Facsimile: 212.403.2000

If to the Optionee, at the address set forth on the signature page hereto; or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such notice or other communication shall be deemed to have been received (a) in the case of personal delivery, on the date of such delivery (or if such date is not a business day, on the next business day after the date of delivery), (b) in the case of nationally-recognized overnight courier, on the next business day after the date sent, (c) in the case of telecopy transmission, when received (or if not sent on a business day, on the next business day after the date sent), and (d) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

Section 11. Waiver of Breach . The waiver by either party of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any other or subsequent breach.

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Section 12. Optionee’s Undertaking . The Optionee hereby agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Optionee pursuant to the express provisions of this Agreement and the Plan.

Section 13. Modification of Rights . The rights of the Optionee are subject to modification and termination in certain events as provided in this Agreement and the Plan (with respect to the Options granted hereby). Notwithstanding the foregoing, the Optionee’s rights under this Agreement and the Plan may not be materially impaired without the Optionee’s prior written consent.

Section 14. 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 OR CONFLICT OF LAW 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.

Section 15. Restrictive Covenants . The grant, vesting and exercise of Options pursuant to this Agreement shall be subject to the Optionee’s continued compliance with the restrictive covenants in Annex I to Section 8 of the Management Investor Rights Agreement as modified by any Side Letter thereto (as the same may have been amended).

Section 16. Withholding . As a condition to exercising this Option in whole or in part, the Optionee will pay, or make provisions satisfactory to the Company for payment of, any Federal, state and local taxes required to be withheld in connection with such exercise; provided , however , in the event of a Qualifying Termination Event and subject to such exercise satisfying the minimum threshold for the payment with Shares of the Option Price as set forth in Section 2 hereof, the Optionee (or the Optionee’s estate, as applicable) may direct the Company to deduct from the Shares issuable upon exercise of all (and not less than all) of the Optionee’s then exercisable Options a number of Shares having an aggregate Fair Market Value equal to the minimum tax withholding due upon exercise of such Options.

Section 17. Adjustment . In the event of any event described in Article X of the Plan occurring after the Grant Date, the adjustment provisions (including cash payments) as provided for under Article X of the Plan shall apply.

Section 18. Counterparts . This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts together shall constitute but one agreement.

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Section 19. Entire Agreement . This Agreement and the Plan (and the other writings referred to herein) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto.

Section 20. 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 for any reason, 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. 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.

Section 21. Waiver of Jury Trial . Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, trial by jury in any suit, action or proceeding arising hereunder.

Section 22. Code Section 409A . Notwithstanding anything herein or elsewhere to the contrary, to the extent the Optionee or the Company notifies the other that this Agreement may reasonably be expected to result in the Optionee’s being subject to the penalties of Section 409A of the Code, the Optionee and the Company agree to negotiate (and the Company shall cause any affiliate to negotiate) in good faith alternatives, within the time period permitted by the applicable Treasury Regulations, to modify the Agreement, in the least restrictive manner necessary and without any diminution in the value of the payments to the Optionee, in order to cause the provisions of the Agreement to comply with the requirements of Section 409A of the Code, so as to avoid the imposition of taxes and penalties on the Optionee pursuant to Section 409A of the Code.

[Signature Pages Follow]

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


DOMUS HOLDINGS CORP.

By:
Name:		David J. Weaving
Title:		Executive Vice President and Chief
Administrative Officer

OPTIONEE

See attached signature page

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OPTIONEE

Name: [ — ]

Residence Address:


Number of Shares of Common Stock subject to Options:		[ — ]

Option Price for Options:		$[ — ] each

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Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Richard A. Smith, certify that:

I have reviewed this quarterly report on Form 10-Q of Realogy Corporation;

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 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 we have:

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

The registrant’s other certifying officer 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):

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.

Date: November 9, 2010

/ S / R ICHARD A. S MITH

CHIEF EXECUTIVE OFFICER

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Anthony E. Hull, certify that:

I have reviewed this quarterly report on Form 10-Q of Realogy Corporation;

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.

Date: November 9, 2010

/ S / A NTHONY E. H ULL

CHIEF FINANCIAL OFFICER

Exhibit 32

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Realogy Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Richard A. Smith, as Chief Executive Officer of the Company, and Anthony E. Hull, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002 be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

/ S / R ICHARD A. S MITH

RICHARD A. SMITH

CHIEF EXECUTIVE OFFICER

November 9, 2010

/ S / A NTHONY E. H ULL

ANTHONY E. HULL

EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

November 9, 2010